On Wednesday in Buenos Aires Argentina truckers blocked many streets in Buenos Aires as a protest to current president Mauricio Macri’s market-friendly economic policies.
Last October, Argentina has its midterm elections where Macri’s political party won. With that momentum, he had outlined his plans for structural reforms in Argentina.
Macri is a president very much in a the neoliberal mould, who firmly believes in market based policies as methods to deal with the country’s economic problems such as high inflation and unemployment and fiscal deficit, which is money borrowed to fund its policies. As a result, Macri has been trying to make the country a more open economy and trying to attract more foreign businesses to invest in Argentina. The problem with this approach is that Argentina has a high inflation and strong labor unions, which makes the cost of doing businesses in Argentina higher. The high inflation also results in instability that makes investing in Argentina less attractive as a company would not know how much profits they would potentially make. Macri also wants to decrease taxes, but public spending is dependent on these taxes and Macri wanted to (and succeeded in) pass pension reforms to reduce government spending.
For context, inflation last year was at 25% while America’s is at 2%.
The result is that some Argentines feel that Macri’s market-based policies will affect the most vulnerable in Argentine society, while some also feel that it is also a way in which Macri, a well-known businessman, and his associates, would be able to increase the amount of money that they themselves make.
Not helping the situation is impending wage negotiations, where unions are campaigning for more than a 20 percent rise in wages, which are a result of and also potentially lead to more inflation.
Argentina’s high inflation is partially caused by the previous Kirchner’s administration’s propensity to print money to fund their own policies, including welfare ones due to their inability to borrow money and Macri’s been trying to fix it.
So far, my post has made it seem like Macri is the hero trying to fix the country’s economic problem. However, to a pensioner or a union worker, Macri is reducing what they think is their right to pensions and higher wages, and Macri’s history as a businessman could mean that all of his proposals are to benefit himself.
Argentinians have a history of taking to the streets to demonstrate when they feel that something is wrong, which I believe is important and admirable because I feel like everyone should actively participate in determining their country’s politics. However, no one has perfect information about how the market works, how the market will respond to policies and no one can read the future to know how their actions or policies will affect the future.
In my opinion, I believe Macri is doing the right thing in trying to stimulate the local economy through attracting foreign money. Because in this capitalistic economic reality where money is power, he needs to try to stabilize the economy to help the people, watching the value of your country’s money erode while having to borrow (and pay more) over and over again to fix the problems is inherently unsustainable.
But what do I, as a foreigner know? Maybe the people are right and Macri is just trying to make sure the businesses of himself and his friends make more money.
One thing is for sure, politics is complicated, but that’s humanity.
For the people or for personal gain? This question can be asked for everyone; Macri, Union leaders, Strike leaders, parliament. And no one really knows.