Argentina: President Mauricio Macri’s ‘zero poverty’ promise a distant goal

President Mauricio Macri's market-friendly reforms have been praised by international investors, but have so far brought only pain to the country's poor.

By: AP | Buenos Aires | Published:October 31, 2016 2:30 pm
Argentina, poverty in Argentina, Mauricio Macri, Argentina President, Argentina economy, Argentina news, world news, latest news, indian express Norma Colque, who gets food from the state to serve about 200 people a day, says that in recent months, she has had to stretch the pasta and stew because twice as many people are lining up for food. (AP Photo/Natacha Pisarenko)

Norma Colque threw open the rusting metal-grill door at her soup kitchen and dozens of hungry children waving plastic containers rushed past their parents to the head of the line. “There’s food for everyone. Don’t worry,” Colque said as she dumped ravioli into the containers that the families would carry back to their ramshackle brick homes in the Villa 31 shantytown of Argentina’s capital. But Colque worried that may not be true for long. The government has been sending her food meant to serve about 200 people a day, but she said that in recent months she has had to stretch the steamy pots of pasta and stew because twice that number are lining up for food.

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“The families of these kids have been losing their jobs,” she said, and they can no longer afford basic goods.

President Mauricio Macri’s market-friendly reforms have been praised by international investors, who say they lay the groundwork for growth. But so far, they have brought only pain to the country’s poor.

Since taking office in December, he has laid off tens of thousands of state workers and tried to cut energy subsidies, sending utility bills and bus fares soaring. Macri dropped the previous government’s foreign exchange controls, leading to a sharp devaluation of the peso. The already high annual inflation rate of 30 percent has jumped to 40 percent.

As he campaigned last year, Macri often said his goal was to reach “zero poverty” by the end of his term in 2019.

But with the economy expected to shrink 1.5 percent this year, Macri now concedes his poverty goal isn’t possible, and discontent is growing.

“Macri broke his zero poverty promise,” said Miriam Cruz. Since her husband lost his job four months ago, she has been grilling chorizos in Villa 31 as the only breadwinner in her family of four.

The family lives below the 12,600 peso-a-month ($830) poverty line and Cruz’s daughters, aged 7 and 10, line up every night outside the soup kitchen because they can no longer afford to eat dinner.

“The prices at supermarkets have soared and there are no jobs,” Cruz said as the smoke of the sausages billowed from the grill on a street lined with a tangled maze of electric wires, just blocks from the ritzy cafes of one of the wealthiest districts of Buenos Aires.

Such contrasts persist across the country of 41 million people. The government says more than 32 percent of Argentines live in poverty, unable to afford a basic basket of goods. That is up from 29 percent in the 10 months since Macri took office, according to a study by the Catholic University of Argentina.

Many of the poor live in slums known as “Misery Villages,” where they often lack access to transportation, running water or sewage. Argentina’s northern regions have chronically high rates of child malnutrition, even though the country remains a top global grain supplier.

“In the past nine months, about 1.5 million people have joined the ranks of the poor,” said Lucila de Ponti, an opposition lawmaker leading the fight for a stimulus bill meant to create 1 million jobs. “This has to do with the economic policies adopted and how difficult it has become for lower income sectors to access a basic basket of goods.”

The leftist governments that took power in 2003 focused on rescuing Argentina from a devastating 2001 economic crisis that left one of every five Argentines out of work and with growing hunger.

President Cristina Fernandez and her late husband and predecessor, Nestor Kirchner, kept prices low for things like bread, bus rides and energy prices, and they distributed handouts for the poor.

But their free-spending policies led to soaring inflation, limits on exports and currency controls that created a black market for dollars. Few economists believed the economic statistics released by Fernandez’s government, and it eventually stopped publishing poverty figures altogether, though Fernandez’s Cabinet chief boasted that Argentina had fewer poor people than Germany.

Macri has focused on attracting foreign investors, cutting government spending and ending economic distortions. He also vows to release credible economic data.

“It’s obvious that accomplishing zero poverty in four years is not possible,” Macri said when he released the poverty figures in late September. “But we’ll no longer disrespect people telling them that there’s less poverty in Argentina than in Germany.”

The president of the World Bank recently praised Macri’s efforts at providing clear data as a crucial step to reduce poverty.

“The poverty rate was both surprising and disturbing,” Jim Yong Kim said. “But, again, I think the positive to take out of this is that Argentina has recommitted to providing accurate data in a transparent way.”

Many economists are urging Macri to continue his reforms, even if they are painful for now.

“There are less jobs because the economy is in recession and there’s more inflation,” said Matias Carugati, an economist at the Management & Fit consultancy. He said jobs should increase as the economy improves. “But it may take a while … the problem is that what might be good in the long term is hurtful in the short range.”

Many aren’t willing to wait.

“This government is as responsible for this situation as the previous one. If they keep using the same medicine to heal the patient, they’ll starve it to death,” Luciano Tarduil said as he handed out bowls of stew at a soup kitchen in front of Congress.

“Argentina is a top food producer. It’s a crime that our children are dying of hunger.”