Not Your Casual News Week 12: The Milei's experience in Argentina, more money, more poverty
Also about the return of Somali pirates in the Red Sea and water shortage in south India
18 March marked 100 days since President Javier Milei won the elections in Argentina.
The effects of his slashing measures are already being felt. Argentina’s middle class is facing an unprecedented crisis as a result. With soaring inflation and subsidy cuts, many Argentines are struggling to afford basic needs, including education and healthcare.
The economic downturn has led to a spike in poverty rates, with six out of ten Argentines now living in poverty. The situation has forced many middle-class families to make tough choices, such as pulling their children out of private schools and moving in with relatives.
Javier Milei, a far-right politician, won Argentina’s presidential election in December 2023. He ran on a platform of ending the country’s economic decline and making Argentina a world power again. To achieve this, he promised to deregulate the economy, privatise public companies, cut taxes, replace the peso with the dollar and close the central bank. These proposals would radically alter the Argentine economy and have the potential to worsen the country’s already high poverty rates.
Since taking office three months ago, Milei has initiated a sweeping liberalisation of the economy through executive decrees, enacting more than 300 measures. The rental market has been completely deregulated, with no government oversight on pricing. Private healthcare companies can now set their own prices, and a number of industrial and commercial regulations have been removed. In addition, the government has taken steps to privatise state-owned enterprises.
More importantly, Milei has devalued the national currency, the peso, by 54%.
This brings the value of the currency closer to the black market — a move applauded by the financial sector, but which has also led to an explosion in the prices of goods and services.
[For the sake of clarity and fluidity of the text, following prices are in US dollars. 1 US dollar = 0,92 Euros = 856,73 Argentine Peso]
According to Numbeo, a crowd-sourced online database that compares the cost of living, a one-bedroom apartment in the centre of an Argentine city costs $295.36 per month ($209.73 outside the centres), while the average monthly salary, after taxes, is set at $416.51.
A person living in the city would have $121 left over to pay for all of life's expenses, such as electricity, air conditioning, public transport or gas for a car, internet and, of course, food.
A kilo of rice costs $1.07, a kilo of tomatoes $1.45 and a kilo of beef now costs more than $6 — in a country where meat is the national dish, a part of their identity that they are not ready to give up as meat consumption is rising despite the inflation.
Under President Milei’s leadership, Argentina has seen a sharp rise in inflation, which has now surpassed Venezuela's and is the highest in the world (276% year-on-year). The poverty rate has also risen to almost 60% and unemployment is on the rise.
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The changes have been met with mixed reactions, with some arguing that they are necessary to boost the economy, while others fear that they will lead to a decline in living standards for Argentines.
Javier Milei blames his predecessors for the poor economic conditions and has promised to radically transform the country. However, he has faced two major obstacles: the judiciary, which has ruled against some of his executive orders, and the National Congress, which has blocked some of his proposed reforms. His far-right coalition, La Libertad Avanza (“Liberty Advances”), has only 38 out of 257 deputies and seven out of 72 senators in the National Congress.
But his camp remains optimistic.
“If anyone thought that so many decades of cheap and impoverishing populism could be resolved in 90 days, they were wrong,” presidential spokesman Manuel Adorni said on Thursday 14 March.
The Argentine president also said the “sharp slowdown” in inflation was “the result of the national government’s work to enforce strict budgetary discipline.” Indeed, the inflation rate is falling: from around 25% in December to around 20% in January and 13.2% in February.
“The biggest success is pushing down inflation, which has exceeded expectations,” Carl Moses, an economic consultant based in Buenos Aires, told the Deutsche Weil, “Argentinian shares and bonds have sharply risen in value despite the severe recession.”
The economist added that this situation “matches the overall mood among the population, which is more positive than one would expect given the dramatic deterioration of Argentina's economic and social situation.”
However, the fall in inflation is offset by the sharp rise in poverty, as noted above.
“Milei is governing for the market and turning his back on society,” warns economist Juan Manuel Telechea in an interview with El País, “how much more are we going to be able to cut social programs and pensions?”
For Javier Milei, it is double or nothing. There is no going back, despite the growing rumblings in the streets, which could lead to a social unrests (people are already protesting every week against Milei’s measures).
And crises are piling up in Argentina. The country is facing an explosion of dengue cases — with 106 confirmed deaths in 2024 and 151,310 cases so far this year. These numbers have already surpassed those of 2023.
Argentina is also facing constant heat waves. 2023 had the hottest start to August in 117 years with 30.1°C (86.2°F), huge wildfires in October 2023, and more recently temperatures soared to 40°C (104°F) in February 2024.
All this while people are living on a hundred dollars a month.
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What Else Happened?
Hong Kong’s new security law, enacted after 27 years, was passed in a record-breaking 48 days. The opposition-free legislature completed the process from public consultation to final approval, targeting acts of treason, insurrection, sabotage, external interference, and theft of state secrets. The law is based on Article 23 of Hong Kong’s mini-constitution (the one that enshrines the “one country, two systems” principle, meaning Hong Kong is a special region of China but with, on the paper, different economic and administrative systems), which promises a high degree of autonomy and ensures that the city’s laws and rights remain unchanged. However, this law is critized by the US for its “vaguely defined provisions,” while Western governments expressed “alarms” about it. Hong Kong Chief Executive John Lee, on the other hand, hailed the achievement. The bill was first proposed in 2002, but was met with mass protests and thwarted by the legislature.
After more than a decade of inactivity, Somali pirates have resurfaced in the Red Sea, exacerbating a global shipping crisis orchestrated by the Houthis in retaliation for Israel's war in Gaza. Earlier in the month, a Bangladeshi-owned ship, the Abdullah, was attacked by pirates and its crew has been taken hostage off the Somali coast. The pirates are now demanding $5 million for the release of the 23 crew members. Another Maltese-flagged ship, the Ruen, was intercepted and freed by the Indian navy after being taken hostage by pirates. “They took this chance because the international naval forces that operate off the coast of Somalia reduced their operations,” a pirate financier who helped fund another bulk carrier hijacking last December told Reuters. In response to the pirate attacks a decade ago, shipping companies implemented enhanced security measures on board their vessels and international navies took part in operations led by NATO, the European Union and the United States. This has virtually eliminated pirate attacks, until now.
Brigitte García, Ecuador’s youngest mayor at 27, was found shot dead with her press officer in San Vicente, where she was elected a year ago. No arrests have been made and the motive remains unclear. García’s murder adds to a string of political assassinations in Ecuador, including that of presidential candidate Fernando Villavicencio last year, in the context of an ongoing “war” between the state and drug gangs. The rise in gang violence prompted President Daniel Noboa to declare a two-month state of emergency in January to combat armed groups, which was extended for another month on 7 March.
Climate News
India’s main reservoirs have reached their lowest March levels in five years, potentially affecting the availability of drinking water and power this summer. The southern state of Karnataka, including the technology hub of Bengaluru, also known as India’s “Silicon Valley”, is facing a significant reduction in water supply. While national water reserves are at 40% of their normal capacity, Karnataka’s main reservoir was down to 16% of capacity. The state’s power ministry is monitoring the situation, prioritising drinking water over power generation if necessary. This follows a dry monsoon season in 2023, with low rainfall due to the El Niño weather pattern. Hydropower generation in Asia has also declined rapidly due to these factors.
In Zimbabwe, the government has decided to remove import tariffs on certain food commodities in an effort to alleviate food shortages caused by the drought-induced El Niño. The policy change, which affects maize, rice and cooking oil, is a reversal of an earlier move to reintroduce import levies to protect local production from foreign competition. The new policy, which will take effect in July 2024, is expected to “fill the gap” left by drought-hit domestic crops. Decades of agricultural disruption, exacerbated by an El Niño-induced drought, have left millions of people dependent on aid. As the crisis deepens, Zimbabwe is considering declaring a state of emergency — the government estimates that 2.7 million people could go hungry this year due to food shortages.
A Dutch court has ruled that KLM, the Dutch arm of the airline Air France-KLM, misled customers with its advertising campaign aimed at improving the company’s environmental image, a practice known as greenwashing. The court said that KLM “makes environmental claims based on vague and general statements about environmental benefits, thereby misleading consumers.” It is mainly symbolic, as KLM acknowledges its “communication about sustainability must be honest and transparent” and said the group was satisfied about the sentence that gave “clarity” without imposing any punishment.
Video of the Week
Video recorded by X (Twitter) user __Khadidja showing a queue of Senegalese citizens going to vote on the outskirts of Paris on Sunday 24 March.
A well-deserved election for the Senegalese. After much turmoil, including an attempt by incumbent President Macky Sall to remove them, national elections were held on Sunday.
And the opposition won.
Bassirou Diomaye Faye, recently released after an amnesty deal that ended 11-month of prison, will be Senegal’s new president.
He is the number two of Ousmane Sonko, who was disqualified because of a defamation conviction.
Thank you for reading, enjoy your week!