FROM EIR DAILY ALERT

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IMF Policy Ravages Argentina’s Once-Productive Industry

Dec. 10, 2018 (EIRNS)—“There is not a single sector that has been spared” from the crisis in Argentine industry, said Miguel Acevedo, president of the Argentine Industrial Union (UIA). As reported by Página 12 Dec. 7, the UIA leader said that whereas things are bad now, next year will be worse.

Hardest hit by President Mauricio Macri’s neo-liberal policies are small and medium-sized enterprises (SMEs), which account for 75% of employment in the country. Since Macri took over in December 2015, more than 9,000 SMEs have gone under, with 109,000 jobs lost. Some 25 SMEs close daily, and another 5,000 are expected to close in 2019, unless a dramatic change in economic policy occurs.

At the end of last week, leaders of several business organizations representing SMEs demonstrated in front of Congress, demanding emergency government action. Most of these companies are operating at 60% of installed capacity. For the sixth month in a row, industrial production plummeted in October, down by 6.8%. Declining purchasing power of workers and retirees due to the 40% annual inflation rate, across-the-board austerity measures, and wage gouging, has caused the internal market to shrink significantly. Buying even basic necessities is a challenge.

Add to this the report about to be published by Catholic University of Argentina Social Debt Observatory, that will show a 5% increase in poverty in the third quarter, pushing the national poverty rate to 33%—one in three Argentines is poor. The increase is attributed to high inflation and dramatic reduction in both formal and informal economic activity.

Decades ago, Argentina had a thriving, developing economy.