Argentina faces troubling economic, diplomatic panorama.

Author:Gaudin, Andres
 
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Three weeks from completing the first of his four years in office, Argentine President Mauricio Macri has yet to deliver any of the economic and social advances he promised during the election campaign that landed him in the Casa Rosada in Buenos Aires on Dec. 10, 2015.

The loss of tens of thousands of jobs due to a crisis affecting commerce and industry has resulted in a noticeable increase in the country's poverty and destitution numbers. Soaring inflation and a sharp drop in consumption have forced many small- and medium-sized businesses to close. Larger enterprises, particularly in the automotive and construction sectors, are suspending or laying off personnel. Exports are also down significantly, as are sales in supermarkets, shopping centers, and retails shops. The result is mounting frustration among regular citizens and workers, with an increase in labor disputes at a level not seen since the economic crisis of the last decade (NotiSur, March 25, 2016).

On the diplomatic front, the government continues to show a pronounced bias in its international policy, complicating relations, as a result, with China and Russia, two of the top buyers of Argentine grains and food exports. An attempt to improve relations with the United Kingdom, in the meantime, seems to have backfired, with London deciding unilaterally to carry out military exercises on the Islas Malvinas/Falkland Islands, a disputed territory over which the two countries fought a bloody war in 1982. And to top things off, the Macri administration also finds itself at odds with the UN, whose Working Group on Arbitrary Detention demanded late last month that an indigenous social activist detained without charges since January be freed (NotiSur, May 20, 2016).

Ballooning debt

Macri still believes that the steps taken during his first three weeks in power to revert the redistributive and economic-stimulus policies of the previous dozen years will eventually prove successful (NotiSur, Jan. 29, 2016). One of those measures was to lift foreign exchange controls. The result has been a roughly 40% devaluation of the Argentine peso and rising inflation, which is expected to reach 42% this year.

The new government also cut taxes for the agribusiness and mining sectors; accepted onerous demands put forth by so-called "vulture funds" that had been involved in a drawn-out dispute with Argentina over debt bonds (NotiSur, Oct. 3, 2014); allowed rate hikes on public services (electricity, water, sanitation,...

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