May 12, 2021

Three months after quarantine, Argentina faces a perfect storm



Three months after the start of the quarantine due to the coronavirus pandemic, the Argentine president, Alberto Fernández, faces a worsening of the health, economic and social crisis, and the weariness of a good part of society due to extensive confinement.

On the verge of completing 100 days of confinement next Sunday and with an exponential increase in the cases of COVID-19 in recent days, the Argentine Government decided to toughen the quarantine from next Monday and until July 17 in the city of Buenos Aires and its metropolitan area, where 15 million inhabitants live and which has become the epicenter of the pandemic with 90% of infections.

These more restrictive measures are aimed at reducing the movement of people on the streets and the circulation of passengers on public transport to prevent the spread of the virus, which has increased due to a social relaxation due to being fed up with quarantine and a certain lack of controls. that allowed a reactivation of the informal economy.

One of the main concerns now is the increase in the occupation of intensive care beds, 48.3% of the 11,500 available in the country are currently occupied, although only 472 by coronavirus patients, but the problem, according to the authorities health, is in the evolution of infections in the coming weeks that could lead to a collapse of the health system.

Despite the increase in infections, the figures for Argentina – 52,457 positives, of which 1,167 died – are very far from those registered in neighboring countries such as Chile and Brazil.

For the Argentine Government, the key to this difference that has saved thousands of lives lies in the early quarantine that it adopted on March 20.

Furthermore, the Government defends that economic deterioration occurs equally in quarantined countries as well as in those that have been more flexible.

“The economic problem is not quarantine, it is the pandemic, and it affects everyone the same,” Fernández said today, announcing the extension of the quarantine in the capital and its metropolitan area.

HARTAZGO BY THE QUARANTINE

The fatigue of Argentine society due to the long quarantine and its economic impact in a country that is dragging more than two years of recession are beginning to take its toll on the popularity of Fernández, who although he still maintains a high index shows a downward trend, according to the latest polls.

The social unrest has been reflected in several protests against the quarantine in different parts of the country and the saucepans have also been heard again in protest in some neighborhoods of the capital.

But the most massive protests were registered last Saturday against the decision of the Fernández government to intervene and send a bill to Parliament to expropriate the Vicentin company, one of the largest agro-export companies in the country.

NEW FRONT OF BATTLE FOR THE EXPROPRIATION OF VICENTIN

To the crisis caused by the coronavirus, the economic recession, and the complex negotiation of a debt of 66,238 million dollars, the Fernández government added another new front with Vicentin, which has generated a strong controversy in the country.

For some analysts, the moment chosen by Fernández was not the best and behind this announcement they see the hand of former vice-president Cristina Fernández, who maintains a low profile in these moments of crisis.

For analyst Esteban Regueira, from the consulting firm Clivajes, the Government did not communicate the situation well with Vicentin and this was taken advantage of by the economic corporations, which in his opinion constitute the main opposition, to send the message that the Government intends to expropriate companies that It has penetrated into a sector of the middle class tired of the closure and the impact on their pockets.

“A mortar was created that generated a crisis scenario that until now had not been seen,” he added in statements to Efe.

After protests against a possible expropriation of the firm, the Fernández government is now betting on a mixed intervention by the company and leaving the expropriation aside.

PANORAMA SHADOW

The paralysis of the economy is deepening the crisis in the Argentine economy that has been in recession for two years, with high levels of inflation and more than a third of the population in poverty.

Although quarantine has been relaxed in a large part of the country, it has been kept more strictly in the capital and in its metropolitan area, which generates 40% of national GDP.

In the capital, the situation of the shops is critical and there are thousands of businesses that have closed their doors since the quarantine began in March.

For the Portfolio brokerage, “there is concern about the new quarantine extension – and hardening – where it would end the lives of several companies – more than anything SMEs – that were already on the tightrope. It is a bad sign for the markets, which shows that the government is very abstracted from the economic reality “.

There is not a single economic indicator that gives respite and the United Nations (UN) presented last Tuesday a report in which it alerts of a fall in the Argentine economy of between 8.2% and 10%, and an increase in the poverty rate, which could reach 40% at the end of the year.

Some analysts warn that the country is heading for a crisis worse than that of 2001, when Argentina declared the cessation of payments for more than 100,000 million dollars, then the largest in history, in the midst of a deep social, economic and political crisis. .

Debt negotiation is now also the other battlefront in which Argentina is immersed and which triggers uncertainty about the economy.

Argentina formally launched a swap offer two months ago, massively rejected by creditors, after which it entered into a dialogue with the main bondholders, which included the exchange of proposals.

The arduous negotiations continue although there is still “work to be done and distance to cover in economic and legal terms as well,” Economy Minister Martín Guzmán said Thursday.

Argentina extended until July 24 the deadline to reach an agreement with creditors and avoid a new default.

Carmen Jiménez

.



Source link