International News

Social Conflict In Argentina

Author : Bozhou Marine

Update time : 2024-06-15 15:25:59

On June 12, local time, thousands of demonstrators protested against President Milley's economic reform proposal outside the Congress building in Buenos Aires, the capital of Argentina, and the demonstration turned into violent clashes. On the same day, the bill was passed by the Senate by one vote.

  Strong dissatisfaction and violent clashes in Argentine society

The economic reform bill of Mile discussed in the Congress this time includes declaring a one-year economic emergency, privatizing state-owned enterprises to promote investment, cutting pensions, reducing labor rights, and granting the president broad powers in the fields of pensions, energy, and security. This plan is also called "shock therapy" by many people.
According to media reports, when lawmakers were debating the bill in Congress that day, thousands of bank employees, teachers, truck drivers and workers outside the Congress were beating drums, blowing trumpets, and shouting slogans such as "Our country cannot be sold out." Demonstrators are worried that the economic reform bill will lead to worsening unemployment and further price increases.

Demonstrators tried to bypass the fence in front of Congress and threw stones, bottles and Molotov cocktails at pollce officers who fired pepper spray.
As night fell, a large number of pollce officers with shields drove away the demonstrators and fired tear gas, water cannons and rubber bullets. Demonstrators overturned two cars and set them on fire.
A spokesman for the local security department said at least 10 people were arrested and nine pollce officers were injured. The presidential office condemned "terrorist organizations attempting to launch a coup."

While fierce protests broke out outside Congress, a marathon debate took place inside Congress. With the key vote of Speaker and Vice President Villarruel, the motion was finally passed by 37 votes to 36. Senators then reviewed the bill line by line, and by the early morning of the 13th local time, the Senate had advanced the most critical part of Milley's plan, namely reducing the fiscal deficit, encouraging foreign investment and privatizing some state-owned enterprises.
The bill still needs to be sent back to the House of Representatives for a vote on final approval, and it is expected that the House of Representatives will likely pass it.
The comprehensive reform bill under debate would give Millet broad legislative powers over energy, pensions and security, and would also include measures to encourage investment, relax economic regulations and cut deficits, but it would also mean many cuts in labor and pension benefits, the latter of which is a major cause of strong dissatisfaction in Argentine society.

  Inflation rate as high as 276.4%

A BBC columnist in Argentina wrote that what worries most Argentines is that the reforms of the Milè government will cause a considerable part of the lower and middle classes to fall below the poverty line. According to the latest Argentine social debt survey questionnaire of the Catholic University of Argentina (UCA), nearly 45% of the population in Argentina is already below the poverty line. After all, even before the new government came to power, one-third of registered workers had fallen into poverty due to a decline in real wages, a problem that is now becoming more serious as inflation further intensifies.
On June 13, local time, data released by the Argentine National Statistics Bureau showed that the country's consumer price index in May rose 4.2% from April, the lowest since January 2022 (3.9%). In the first five months of this year, Argentina's domestic consumer price index rose by 71.9%, and in the past 12 months, it has risen by 276.4%.
Currently, more than half of the population lives in poverty. In the six months since right-wing populist Milley came to power, his proposed economic reform bill has not been passed, so he has been forced to use administrative means to devalue the currency, cut subsidies, and fire thousands of government officials, but this has only exacerbated the economic recession in the short term.

  Economic activity has declined significantly

The National Institute of Statistics and Census under the Argentine Ministry of Economy released data on May 22 showing that Argentina's economic activity in March fell 8.4% from the same period last year.
This data is lower than market expectations. A Reuters survey expects Argentina's economic activity in March to fall 6.9% from the same period last year, while a Bloomberg survey expects a decline of 7.3%.
Reuters said that economic activity data can be used as an early indicator for predicting GDP. Taking March this year as the benchmark, Argentina's economic activity has fallen by a total of 5.3% in the past 12 months.
The data showed that compared with the same period last year, Argentina had a decline in 9 industries in March, among which the construction industry had the largest decline of 29.9%, followed by manufacturing, which fell by 19.6%. Only two industries grew, with agriculture and animal husbandry growing by 14.1% and mining growing by 5%.
As part of the reform, the Miller government canceled construction contracts for many public works and slashed fuel and transportation subsidies. AFP said that almost all public works in Argentina have been suspended, and the construction industry has lost about 100,000 jobs so far. In the manufacturing sector, aluminum smelters, steel mills, automobile manufacturers, and tire manufacturers have reduced production and laid off workers. A market research agency estimates that Argentina will lose a total of 240,000 jobs in the first quarter of this year. On May 2, the Organization for Economic Cooperation and Development (OECD) said that Argentina's GDP will fall by 3.3% this year, and the decline will deepen in 2023, making it the country with the largest contraction in the world after Saudi Arabia.

  China extends currency swap agreement with Argentina

Argentina is the first Latin American country to sign a currency swap agreement with China. In April 2009, the People's Bank of China and the Central Bank of Argentina signed a three-year currency swap framework agreement for the first time, with a value of RMB 70 billion, which will be valid for three years. After several extensions, on June 9, 2023, the two central banks renewed the bilateral local currency swap agreement, with a swap size of RMB 130 billion/4.5 trillion pesos, valid for three years.
At present, China has been Argentina's second largest trading partner and largest source of imports for many consecutive years, while Argentina is China's sixth largest trading partner, sixth largest export market and fifth largest source of imports in Latin America. According to statistics, the scale of bilateral trade between China and Argentina reached US$17.399 billion in 2023 (equivalent to RMB 126.16 billion).
From January to April 2024, the bilateral import and export volume of goods between China and Argentina was US$3.975 billion, a decrease of US$2.156 billion compared with the same period last year, a year-on-year decrease of 34.7%. The total value of China's exports to Argentina was US$2.179 billion, down 34.7% year-on-year; the total value of China's imports from Argentina was US$1.796 billion, down 34.7% year-on-year.

In general, although the trade volume between China and Argentina declined year-on-year in some months in 2024, the economic and trade ties between the two countries remain close, and cooperation has been deepened in some areas. These economic and trade data reflect the complementarity and cooperation potential between China and Argentina in the field of trade.

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