President Fernández’s claim of a “winning decade” under scrutiny as new figures show that poverty is on the rise again, with runaway inflation, denied by the government, possibly to blame.
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The often bandied-about term “década perdida” (lost decade) is generally used to talk about failed social and economic policies across Latin America during the 1980s and early 1990s, when regional economic growth was close to negative and poverty and inequality rates skyrocketed. The term has also been employed on more local and national scales, including references to the stagnation and eventual collapse of Argentina’s economic and social fabric through the 1990s and up to the crisis of 2001, when the country’s financial system caved in and Argentina was forced to default on its debt.
In contrast, however, after the social, economic and political crisis that encased the collapse of Argentina’s finances in 2001, President Cristina Fernández de Kirchner has taken to referring to the subsequent 10 years of Kirchner rule (her late husband, Néstor Kirchner, was President from 2003-2007, and Fernández has been in power since then) as the “década ganada” (winning decade). The period has been marked by strong economic growth at times approaching double-figure yearly rates, fuelled by agricultural (especially soybean and grain) exports as well as the natural upswing that accompanies any recovery of sorts after such a dramatic downturn.
However, developments in the last couple of years point to a new looming economic crisis, as growth becomes sluggish and inflation soars – the government insists it remains around the 10% mark, but these figures are often rubbished by international observers who put the figure closer to 30%. And now new figures suggest that the recovery, if there ever was a real and sustainable one, is slipping away from the grasp of many everyday Argentineans, who are struggling with price increases, precarious employment situations, and failing public services and infrastructure. In news that must surely test the validity of Fernández’s década ganada claim and which risks adding to her numerous headaches, it has emerged that the number of Argentineans living in poverty is rising at an alarming rate for a country that just a century ago was among the richest in the western world, and arguably still Latin America’s most prosperous until the end of the Twentieth Century.
GDP growth stood at between 8.5 and 9.2% per year between 2003 and 2007 (during Néstor Kirchner’s presidency), still managed rates of 6.8 and 0.8% during the global crisis years of 2008 and 2009, and posted 9.2% and 8.9% in 2010 and 2011 as the Latin America region as a whole recovered spectacularly from the global financial crisis. However, the last couple of years and the medium-term forecast from here on in are not so rosy, and with the prospect of slower economic growth being eaten away by inflation, Argentina’s record on socio-economic wellbeing during the boom years risks being tainted by a lack of sustainability and a failure to ‘fix the roof while the sun shines’.
Of course, it is not a one-sided story: even by government figures the poverty rate shortly after the 2001 crash stood at above 50%, and so one cannot question the fact that the situation as Argentina enters 2014 is still markedly better than it was around 2002. But the bulk of the subsequent reduction came in the few years afterwards, as Néstor Kirchner’s government married economic growth with social policies aimed at reversing the worst of the impacts from the crisis. Yet since his wife took over in 2007, and indeed since Néstor’s death in 2010, this progress was certainly kept in check, and the new figures seem to suggest that it is starting to come undone as Argentina’s short-lived boom grinds to a halt.
A report released by Argentina’s Confederación General del Trabajo trade union (CGT – General Confederation of Labour) earlier this month indicates that the number of Argentineans living in poverty rose by half a million – out of a population of some 40m – in just three months towards the end of 2013, and that the number of people in poverty rose by a total of 1.25m over the course of 2013, reaching a total of just under 12m people, close to 30% of the total population. According to the CGT, these figures include over 40% of children and youths, with almost half the total number in poverty being made up by Argentineans in this age group.
The report also revealed that the cost of basic goods for a typical family of four had risen to 6,500 Argentine Pesos per month (US$968), nearly a 50% increase on 2012, and it is this level of inflation that is to blame for the rise in poverty, according to the CGT. Meanwhile, the Fernández government continues to insist on far lower figures, as it does with its official inflation figures, claiming that the cost of the basket of basic goods was just ARG$1,750 (US$260), barely a quarter that being reported by the CGT. The government also claims that the poverty rate stands at only 4.7%, or less than 2m people.
Meanwhile, a further report by the Observatorio de la Deuda Social Argentina (ODSA – Argentinean Observatory of Social Debt), released in the dying days of 2013, suggested that a quarter of Argentina’s urban population was living in poverty, and that a similar number of people were victims of ‘structural marginalisation’ where basic infrastructure was either in a poor state or completely non-existent. The report by the ODSA, which is tied to the Universidad Católica Argentina (Catholic University of Argentina), also highlighted the rise in the number of Argentineans with a precarious employment status, from 32.1% in 2007 to 35.3% in 2011, as well as the fact that two in every ten households were dependent on government handouts.
“More than a decade of economic growth has been insufficient for the resolution of problems of structural marginalisation which affect at least one in every four Argentineans”, the report noted. The situation is one of families in “structural poverty, who despite having earned ‘rights’ are unable to access jobs of a certain quality or a dignified home, or indeed satisfactory health or education services”. The report also cites data that shows that 37% of young Argentineans fail to complete secondary education, 20% are neither in work nor education, and 12% of 5-17 year-olds have to undertake some form of work to help contribute to their families’ financial situation.
Furthermore, in what can be rightfully considered a shameful situation, one of the world’s agricultural powerhouses and largest producers of food now plays host to a scenario where in one in every ten urban households (representing some 3m people) there are cases of malnutrition, due to these families “not having the sufficient economic resources at their disposal in order to have access to foods necessary for subsistence”. In addition to this, one in every ten households are lacking in running water, while three in ten do not have proper sewage services.
In the midst of these reports and end-of-year analyses of the state of Argentina, the country was also sweltering under the most severe heat wave for more than a century, as the mercury exceeded 40°C every day for almost a week in some parts of the country. To add to the Fernández government’s woes, the high temperatures led to power systems failing and tens of thousands of people being left without electricity as lines and cables buckled in the heat. The government was quick to point the finger at private energy companies, but it has come in for strong criticism from many other quarters that the blackouts are evidence of years of insufficient energy policies and a lack of investment in infrastructure.
In its report, the ODSA highlights the assertion that a rise in a country’s GDP is not incompatible with the continuation or even rise in economic inequality, or conditions of social division and exclusion. The facts and figures from Argentina during the so-called década ganada appear to be stark proof of this, and the danger is that such a situation is only going to continue apace for as long as the Fernández government continues to stick its head in the sand when confronted with both statistical and anecdotal evidence of its country’s growing poverty. Persistence with failed economic policies coupled with denial of the social impact of these very policies is a potent cocktail for social disintegration, and President Fernández should take note over the course of her remaining two years in charge if she wants her legacy of a “winning decade” to have any real meaning.