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Alvaro Enrique Saldivia Lopez

Apr 26, 2024

Factual data on Milei's economic war against Argentine proletariat

In just the first 3 months of Javier Milei's neocolonial NATO puppet regime, poverty has increased by 13 points, from 44% to 57% of the population, the highest figure in 20 years. No less dystopic has been the increase in the homeless population, which went from 9.6% in the 3/4 of 2023 to 15% in January 2024, reaching over 7 million people living in the streets homeless and 25 million who live in absolute poverty, in a country with roughly 47 million citizens. These figures are taken from the poverty index prepared by the Social Observatory of the UCA (Catholic University of Argentina), a conservative institution with an equally conservative estimate.

This ongoing social catastrophe is a direct consequence of the enormous increase in prices of basic goods following the gigantic devaluation carried out by Milei, keeping the incomes of most of the population not just stagnant, but on a precipitous decline. Many employed workers have become poorer since January, when the cost of the basic goods for a typical family was 596,000 pesos, excluding the expensive rent prices.

The current monthly minimum wage rose to 202,000 in March (just under 200 dollars), according to Economy Minister Luis Caputo, after January's 156,000 pesos and February's 180,000, but this hasn't close to compensating for the economic disaster imposed on the working class. Caputo was the criminal responsible for Argentina's Illegal debt with the IMF under Macri’s Government, during which the bankers made paradise-profits with the help of the Calabresa Mafia (Macri).

Pensions rose by 27% in March, after an accumulated inflation of 50% between December and January, and it is estimated that it could exceed 100% between December and the end of March. Year-on-year inflation climbed to 254% at the end of January 2024, highlighting Argentina as the country with the highest inflation rate in the world.

In the midst of this anarchy of capitalism, most of the population will continue to be affected in the coming months by brutal fare increases in basic services, from public transport to energy and fuels. The prices of food and other essential products had crazy increases in January: 70% for coffee, 60% for salt, 65% for diapers, 37% for milk... Argentina is the paradise of speculators.

Hunger and poverty - Food Industry

The Government's National Emergency Decree (DNU) repealed the Gondola Law and the Supply Law, which allowed access to basic goods to be regulated. In the absence of price controls, suppliers and intermediaries infinitely have marked up products to obtain substantial profits with the inflationary spiral.

The extreme case is that of a staple food produced by the agribusiness oligopoly, rice, the price for which has increased by 950% in one year, between January 2023 and January 2024. Since Milei's DNU (Necessity and Urgency Decree) completely eliminated price controls, the hyper-concentrated food industry, already under monopoly conditions, has driven other players out of the market through its dominance of distribution networks. These powerful companies continue to hike prices on an almost daily basis, thereby generating huge profits for their owners.

Public transportation is another item that has become more expensive, in this case, due to the withdrawal of state subsidies to companies and the increase in energy and fuels. The Buenos Aires metro, for example, has presented a scale by which the price will be increased monthly from 125 pesos in February to 757 pesos in June, no less than 505%. The price of train tickets and collective trips will also be indexed month by month according to inflation.

Skyrocketing rents

A separate comment deserves the increase in the cost of housing, which is not included in the family basket. The DNU repealed the rental law, and since then, the new contracts are freely agreed in pesos or dollars - or indexed to the dollar value - and for the time agreed by the parties, eliminating the minimum term of three years established by the repealed law.

Although the system previously in force was rigidly restricted to the owners of rental housing because their incomes were always undermined by the very high inflation rates and successive devaluations, the current lack of regulation of the sector adds instability and despair to millions of tenants who have been left unprotected by the absence of the previous legal framework without it being replaced by any other. The result is the law of the jungle.

After the repeal of the Rent Law through the DNU, in January, the average rent price increased by 21% per month, the largest increase in 12 years.

According to real estate agencies and tenant associations, the previous contracts remain valid until they expire, but the new ones are negotiated with increases that reach 400%, and more than 40% of these contracts are signed in dollars, for periods that can range from a few months to years and indexation clauses at the discretion of the owners.

Many families are staying on the streets because they cannot cope with the new market rules.

Industrial activity in the red: layoffs and fall in sales

The recession induced by the Government's economic policy is already very noticeable in the fall in industrial activity, which decreased by 0.9% in January, for the second consecutive month, and contracted by 6.3% in year-on-year terms. Factories began to reduce production; in some cases, laying off workers or suspending the activity of some plants.

In February, the closure of the four plants of the Acindar steel company — of the AcerlorMittal group, with 3,100 workers — was announced for a month, due to an “abrupt” fall in sales of between 35% and 40%, according to the company, due to the combined effect of the recession and inflation. The outlook is no more favorable for the automotive industry, after a month in January in which sales fell by 33%.

Among the companies most affected by the drop in consumption are clothing, textile, and footwear factories.

The company Topper, one of the largest manufacturers of sports shoes, with about a thousand employees, laid off 85 workers at its plant in Tucuman at the end of February due to the “brutal” drop in sales, estimated at 40%. In addition, this sector fears the foreseeable effects of the opening of imports, which could mean its definitive extinction.

If employed workers have no money to consume, the crisis affects other areas of the market economy

The immediate consequences of the crisis are even greater in several areas of the service sector, such as tourism and gastronomy. The devaluation made the costs for foreign tourism wildly more expensive — accommodation more than doubled — which no longer enjoys comparative advantages for excursions and shopping in the country. In the gastronomic sector, according to the testimonies of restaurant owners disseminated by more conservative media, revenues fell by 70% between December 2023 and February of this year.

There is no doubt that Milei's explicit program of driving Argentina towards stagflation - stagnation + inflation - is giving the expected result: job destruction, liquefaction of real wages and pensions, the agony of all economic sectors that do not depend on the export of primary goods but on domestic consumption, lack of protection of the most vulnerable sectors.

Milei campaigned wielding a chainsaw, his instrument for "adjusting to caste." Once in government, he joined the worst of the caste, the sector that indebted the country to the IMF and plunged it into recession while dollars fled abroad, and the adjustment clearly fell on the people, on the working class, informal workers, and professional workers. The inflationary spiral that triggered its abrupt devaluation allowed the purchasing power of employees and pensioners to “liquefy."

Remember comrades, never let a Margaret-Thatcher-fan and neoliberal wacko with a chainsaw run for president.

Workers of the World Unite! Independencia y Patria Socialista! Viviremos y Venceremos!

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