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ARGENTINA | 11-01-2020 11:10

January 6th-12th: What We Learned This Week

What are the highlights of the past week?

CITY SLASHERS

President Alberto Fernández confirmed that he will be seeking to lower the Federal Capital’s slice of the federal revenue-sharing pie by around one percentage point although also offering City Mayor Horacio Rodríguez Larreta (now the country’s most important opposition politician) dialogue on the issue. In 2016 then President Mauricio Macri upped the City’s share from 1.4 to 3.75 percent to accompany the creation of the Metropolitan out of the Federal Police with the corresponding costs.

 

PUBLIC PAY HIKE

Last Thursday the 4,000-peso pay bonus granted to private-sector workers in the previous week was extended to all state employees earning less than 60,000 pesos a month.

 

PRECIOS CUIDADOS RETURNS

The Precios Cuidados price watch scheme was relaunched last Tuesday covering 311 items of mass consumption. Some critics complained that foods and beverages of dubious nutritional value prevailed with more price protection for beer, Coca Cola and biscuits than fruit and vegetables. Starting life in 2014, the scheme was maintained throughout the 2015-19 Mauricio Macri presidency but in more limited form.

 

IMPORT CONTROLS

The government has stepped up import controls for consumer goods to protect domestic industry by tightening up non-automatic licence requirements from 12 to 15 percent of the products requiring this permit, as well as halving the span of these licences from six to three months. The new controls are the work of the Production Ministry under Matías Kulfas. Even under the previous market-friendly Mauricio Macri administration, Argentina had remained the most closed economy in the region.

 

30% SURCHARGE CONFIRMED

The 30-percent surcharge on all purchases and credit spending abroad (also applying to Netflix, Spotify, etc) was confirmed last week by Cabinet Chief Santiago Cafiero, accompanied by the measure’s publication in the Official Gazette. Cafiero said that the move would benefit local tourism. Last year’s negative balance between incoming and outgoing tourism is estimated to have cost the country some US$5 billion.

 

INDEC POSTS SLUMP

Last year’s economic data stays negative with industry and construction reporting year-on-year declines of 4.5 and 5.2 percent respectively for last November, INDEC statistics bureau announced last Wednesday. With one month still to go of 2019 thus totals slumps 6.9 percent and eight percent for industry and construction and with just 10 days still to measure in the 2015-19 Mauricio Macri presidency, the respective falls are 14.4 and 8.3 percent. The negative trend now stretches to 19 straight months for industry and 15 for construction. Among the sectors in decline the runaway lead went to the auto industry with a year-on-year plunge of 23.8 percent for November.

 

PRAISE FROM FUND

The International Monetary Fund’s (IMF) Western Hemisphere Director Alejandro Werner last Thursday praised the Alberto Fernández government for “moving in a positive direction” with fiscally neutral measures although still awaiting a more detailed medium-term plan within a global context of economic recovery also facing risks. The praise prompted shares to rise and country risk to fall on the day but a World Bank report was critical of price controls.

 

WIN FOR KICILLOF

The Buenos Aires provincial legislature last Wednesday voted into law a bill updating this year’s taxation to last year’s inflation while accepting the amendments imposed by the opposition majority in the provincial Senate. Buenos Aires Governor Axel Kicillof was quick to criticise these amendments as giving too much away to the “concentrated sectors” at the province’s expense.

 

ENVOY DOWNGRADED

On Tuesday the government decided to strip Elisa Trotta, the envoy to Argentina designated last year by Juan Guaidó (recognised as president of Venezuela by 54 countries around the world), of her diplomatic credentials, given to her as a “full ambassador” by then Foreign Minister Jorge Faurie last October . Her parallel Venezuelan embassy was denounced as “illegal” by the current Foreign Minister Felipe Solá soon after he took office.

 

HOSPITAL POSADAS

The government last Tuesday decreed a six-month trusteeship over the gigantic Posadas Hospital with staff fired during the Mauricio Macri presidency already pressing to be rehired.

 

THIS WEEK IN CORRUPTION...

Two acquittals from the close of 2019 (prior to this month’s court holiday) have come to light in the past week with Federal Judges Marcelo Martínez de Giorgi and Claudio Bonadio as their authors. The former acquitted ex-judge Norberto Oyarbide and interim Auditor-General Javier Fernández as co-recipients of public works graft within the context of the “Cuadernos” corruption notebooks trials. The latter cleared former Transport Minister Guillermo Dietrich, City Mayor Horacio Rodríguez Larreta and other defendants without even summoning them in the probe of the allegedly overpriced contracts for the construction of the Paseo del Bajo underpass awarded to Angelo Calacaterra, a cousin of ex-president Mauricio Macri. Martínez de Georgi’s harshly dismissed the “cCadernos” (a decade of public works kickbacks as chronicled by former Federal Planning chauffeur Oscar) as sufficient proof without supporting evidence – a potential precedent for dismantling all the “cuadernos” trials.

 

APPOINTMENTS

Félix Crous, a militant in the Justicia Legítima Kirchnerite judicial grouping, was confirmed as the new head of the Anti-Corruption Office, replacing Laura Alonso. Less joy for judge Daniel Rafecas, the nominee of President Alberto Fernández for the post of Attorney-General (vacant for the last 27 months), after he was challenged by the Fundación Apolo NGO as “morally unfit” due to his handling of the investigation into special AMIA prosecutor Alberto Nisman’s death among other accusations.

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