The economic crisis in Argentina cannot be overcome despite the constant promises of the Milei government. Indeed, the right-wing libertarian president claimed, before becoming president, that deregulation of the economy (freeing prices, reducing state control over the economy, privatizing state-owned companies, etc.) would soon bring about an economic recovery in the face of the economic and fiscal crisis that the country was going through under Alberto Fernandez and his predecessor Mauricio Macri. However, Milei has been unable to implement policies that alleviate the steadily deteriorating socioeconomic conditions of the poor.
So far, the “libertarian recipe” has not delivered the results that it promised. If the economy continues on this course, not only will the poorest not see any improvements in their conditions, but the number of poor may continue to grow.
Unemployment, currency devaluation and inflation: recipe for poverty
According to a report by the Catholic University of Argentina (UCA), by the first quarter of 2024, 54.6% of Argentine families will have a monthly per capita income below 198,000 pesos (almost 210 dollars). This implies an increase in the number of poor people in Argentina by nearly 16% in just one year if we take into consideration a report by the Observatory of the Argentine Social Debt (ODSA) which stated that by the first quarter of 2023, the number of poor people was almost 39% of the population.
Poverty in Argentina is not decreasing, but quite the contrary…and alarmingly so. According to the UCA report, the worsening of the Argentine economic crisis is due to the fall in the average per capita income of families, the uncontrolled increase in the prices of the basic food basket, and the increase in unemployment (especially in the informal sector), among other factors. For example, the average income of urban workers decreased by 18.5%, and the same happened with the average salary remuneration, which fell by 20%.
As a result, thousands of people who were previously in the lower middle class, according to the report, are now below the poverty line. And those who were already living in poverty are now, under Javier Milei’s government, at risk of living worse. In Argentina, there is a dramatic increase in extreme poverty: about 16.5% of Argentines are living in extreme poverty. The most affected regions are the northeast and northwest of the country, where poverty exceeds 60% of the population. In the greater Buenos Aires metropolitan area, 56.7% of the population is poor. One of the groups that suffers the most from this crisis is children: child poverty reaches 65.4% of the youngest. The data is devastating.
According to many criteria, the UCA figures would suffice to establish that slightly more than 50% of Argentines live in poverty, although the Latin American Strategic Center for Geopolitics (CELAG) argues that to say so would be incorrect. The group of the poor should also include the 18.3% of households classified as “almost poor” since in this group there are people who barely earn a few pesos more than 198,000. CELAC argues that such an amount of money, taking into account the enormous devaluation suffered by the Argentine peso, would not place them as families belonging to the middle class, but closer to poverty. For example, 68% of households have a per capita income of 284,874 pesos (301 dollars).
According to CELAG, the true number of poor in Argentina is closer to 73.3% of the population.
This data, according to CELAG’s analysis, would overturn a long-standing national and regional economic belief that Argentina is a middle-class country. The analysis goes much further and argues that the middle class is in decline, as it is almost non-existent today. Only 16% of the population could be part of Argentina’s “mythical” middle class. Finally, just 10.7% of the population has a high income. Therefore, Javier Milei’s Argentina should be considered as a country in which nearly 75% of the population lives in poverty, and it does not seem that the situation can be reversed in the short or medium term if economic measures that harm the majority and disproportionately benefit the richest in the country continue to be applied.
