The recently installed President of Argentina, Javier Milei, is in Davos.
‘Argentina’s traditional asado barbecue is no longer affordable for many households due to soaring meat and vegetable prices, according to a Reuters report.
The word ‘asado’, which is derived from the Spanish word for ‘roasted’, refers both to the unique grilling method for Argentinian barbecue and also to the vibrant social gathering among friends that traditionally accompanies the meal.
However, with inflation in the country having topped 200% last year, more Argentinians have been further tightening their belts.
Latin America’s third-biggest economy is bearing the brunt of a severe economic crisis after decades of debt and financial mismanagement. An estimated 40% of Argentinians are living in poverty.
According to official statistics, inflation rate hit 25.5% month-on-month in December. It is expected to climb faster in the months ahead after President Javier Milei's government devalued the peso by over 50% last month as part of his so-called ‘shock therapy’ reforms to stabilize the ailing economy.
Milei, who has been in office for a month, has warned it will take time for the results of his program to be seen and that things could get worse before they get better.
President Javier Milei has announced sweeping economic reforms in a bid to combat the worst economic crisis in the country in decades.
They include the privatization of state-owned companies, as well as steps to end limits on exports and loosen price controls.
The newly elected president, who describes himself as an anarcho-capitalist, signed a decree on Wednesday setting out over 300 measures as part of his “economic shock therapy.”
“I'm signing an urgent decree that will kick-start the process of economic deregulation that Argentina needs so much, The objective is to return freedom and autonomy to individuals and start dismantling the enormous amount of regulations that have impeded, hindered, and stopped economic growth,” Milei said.
He has set out a list of initial policy changes, which include a “modernization of labour law to facilitate the process of creating real jobs” and a series of other deregulatory measures affecting tourism, satellite internet services, pharmaceuticals, wine production, and foreign trade.;’
[These measures are designed to make life easier for Argentinian and international capitalists and to increase the exploitation of the working class.]
‘His plan comes one week after Argentina’s new government announced a 54% devaluation of the peso, cuts to energy and transportation subsidies, and a freeze in spending on some major state programs.
There are also plans to hike taxes for Argentina’s grains exports – a key source of global supply for processed soybeans, corn, and wheat.
The initiative was met with harsh criticism from agriculture groups who warned that the measure would harm the industry. Grain exports are a major source of foreign currency reserves for the country’s central bank and are needed to finance imports and repay debts.
The changes have already proved divisive as thousands took to the streets of Buenos Aires to voice their discontent over the government’s austerity plans and to demand more support for the poor.
Latin America’s third-biggest economy is challenged by a severe economic crisis after decades of debt and financial mismanagement, with annual inflation surpassing 160% and 40% of Argentinians living in poverty.
Annual inflation in Argentina exceeded 211% in 2023, marking the highest rate in more than three decades, according to the latest data released by the government’s statistics agency INDEC.
Argentina’s year-on-year rise in prices has also propelled it above Venezuela for the first time in decades, sending the South American country to the highest rankings among nations struggling with soaring inflation.
The data underscores the strong impact of a series of shock measures there, including a 50% devaluation of the nation’s currency and a hike in the key interest rate to 133% in an effort to eventually tame the country’s roaring inflation. The government has also allowed price-fixing agreements to lapse.
The annual inflation more than doubled from 2022’s rate of nearly 95%. Meanwhile, monthly inflation stood at 25.5% in December, up from 12.8% in November but slightly below the 30% projected by the country’s government.
Earlier this week, the International Monetary Fund (IMF) agreed to unlock $4.7 billion for Argentina as part of a debt-restructuring plan and despite the fact that the nation has missed targets related to its $43-billion loan program.
The drastic steps taken by the new government have had a significant negative impact on prices in the country and on food prices in particular.
Argentines’ purchasing power dropped some 10% on average in December as wages rose slower than prices, according to Fernando Marull, director of financial consultancy FMyA, as cited by the FT.
In addition, a regular poll carried out by Argentina’s Federation of Medium-Sized Businesses among retailers showed a 13.7% drop in sales in December compared with the same month in 2022.’
A google search for ‘sex workers in Davos’ reveals fourteen and a half million results. SOYMB will leave readers to do their own research on this topic.
Capitalist economic law, when the demand is high the supply follows the need.
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