WSJ: Argentines say Mauricio Macri’s policies aren’t the solutions they promised to be
Argentina’s shrinking economy and high unemployment are triggering ever-louder grumbling from its citizens, posing problems for President Mauricio Macri in a country where economic discontent has undone previous leaders.
The difficulty for Macri is that he promised it wouldn’t be like this. When he took office in December vowing to slash inflation and jump-start the economy, he told Argentines they could look forward to a brighter future in the second half of this year.
Investors are closely watching the mood on the streets, where in recent decades economic malaise and social unrest rocked and sometimes toppled politicians who weren’t members of the powerful populist Peronist movement. Macri, indeed, aims to be the first non-Peronist president in at least half a century to complete his term.
But for many here, the situation is far from rosy. “I’m really disappointed in Macri,” said Fabian Vicente, a 55-year-old magazine vendor. “He said he’d get rid of inflation and I thought he would. But he’s done the opposite. People are angry.”
Macri has tried to boost growth and pursue business-friendly policies without provoking a social backlash. Jolting the economy into growth is crucial to his hopes of gaining congressional seats in midterm elections next year, his aides say. Early on, he cut export taxes, ended currency controls and devalued the peso, earning praise from the IMF and U.S. President Barack Obama.
But the country’s economic data have been grim. The economy shrank 4.3% in the 12-month period through June, unemployment hit 9.3% in the second quarter, and in July, industrial production tanked 7.9% from a year earlier.
Tens of thousands rallied at the presidential palace in late August in the largest anti-Macri demonstration yet. This month, pilots at Argentina’s flagship airline, Aerolíneas Argentinas, shut down flights to demand better compensation. Some labor leaders say the time has come for Macri to change his approach and have been calling for a nationwide strike.
Macri inherited most of his problems, including a 4% budget gap and double-digit inflation - albeit at half the 45% current rate. But some are of his own making. He lowered gas subsidies, raising consumer prices so much that heating bills soared — in some cases more than 10-fold — across greater Buenos Aires. Last month, the Supreme Court forced Macri to reinstate the subsidies, saying he must hold public comment sessions before raising prices. The error cost hundreds of millions of dollars and hindered hopes of narrowing Argentina’s deficit this year and next.
“The government’s policies benefit multinational corporations but hurt everyone else,” said Hugo Godoy, general secretary of ATE, a state workers union that is calling for a national strike.
Macri’s approval rating has slid to 40% from 63% in December, according to pollster Hugo Haime. Inflation, which soared after the devaluation, is hitting lower-income families hard. Some 4.5 million people have fallen into poverty since Macri took office, according to a study by the Catholic University of Argentina.
Many on this city’s outskirts fear a “social explosion” if things don’t improve soon, Haime said. “That concern is based on history, not the Macri administration, because we’ve had times when people didn’t have enough money to get by and we had looting in December.”
At: http://www.wsj.com/articles/argentines-say-mauricio-macris-policies-arent-the-solutions-they-promised-to-be-1474673665
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