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ARGENTINA | 23-05-2020 08:59

May 16th - May 23rd: What we learned this week

Stories that caught our eye over the last seven days in Argentina.

THIS WEEK IN CORONAVIRUS

At press time yesterday, the total number of confirmed coronavirus cases had risen to 10,649, with 433 deaths, as compared to 7,479 cases and 356 deaths the previous Friday. The week’s spiral of cases (especially in Federal Capital shantytowns) to reach five digits prompted concern with President Alberto Fernández expected to announce a new fortnight of quarantine today – a renewal considered more likely to tighten than relax lockdown, especially as regards traffic between Buenos Aires City and Province. But the week started on a bright note with excitement buzzing over Neokit-Covid 19, a new and faster test for the molecular diagnosis of coronavirus which was hailed as a discovery of Argentine science. Yet it was also a story of good news and bad news with the coronavirus death of Villa 31 shantytown militant Ramona Medina, aged 42, last Sunday. Throughout the week there was tension between BA City and Province with the latter’s governor Axel Kicillof increasingly critical of any relaxation of quarantine (although favoured by many mayors in his province, including Mar del Plata and even some in Greater Buenos Aires) – opening more City businesses in the latest round of quarantine has strained the social distancing in commuter transport. City authorities were on the defensive with far more cases in their jurisdiction although they also carry out far more testing. The province of Córdoba tightened controls last week, which some observers linked to preventing protests against pension reform, passed on Wednesday by a 42-12 provincial assembly vote and aimed at saving 7.5 billion pesos.       


 

DEFAULT DAY

On the eve of yesterday’s technical default (with the deadline on the grace period for paying the interest on three Global bonds totalling US$503 million expiring without payment), the government extended its bond swap offer to creditors originally open until May 8 to June 2, undertaking to announce the final results the following day. Money markets did not seem unduly disturbed by yesterday’s developments with the gap between official and parallel exchange rates almost halved from the previous Friday – the “blue” dollar was sharply down from 142 to 126 pesos in the course of the week with other parallel exchange rates ranging between 109 and 113 pesos while the official dollar had edged up (Banco Nación closed yesterday at 70.75 pesos). The trend for country risk was mildly positive, slightly down from last week’s close of 2,837 at 2,765 points yesterday, reflecting cautious optimism among investors as to signs of less distance between the two sides as negotiations continue. 

 

PENSIONS CHANGE

Pensions will go up by 6.12 percent across the board as of June, the new ANSES social security administration chief Fernanda Raverta and Labour Minister Claudio Moroni announced on Monday. Even if the previous increase in March had also been a single formula applying to all retirement benefits (2.3 percent plus 1,500 pesos), the lump sum favoured the minimum pension considerably more than the higher brackets but there were no such differences this time. Nevertheless, various voices were raised in protest since the percentage under the suspended index-linking system introduced by the previous Mauricio Macri administration would have been 10.9, not 6.12.    

 

PANDEMIC PROMPTS PLUNGE

The economy slumped 11.5 percent in March as against the same month in 2019, INDEC statistics bureau reported on Wednesday, even though there was lockdown in only a third of that month. The plunge was the worst since May, 2009 (when the economy was hit by the double whammy of avian flu and the government’s clash with the farming sector) and almost across the board. Argentina thus posts a negative growth rate of 5.4 percent for the first quarter of 2020.

 

LAYOFF BAN EXTENDED

On Tuesday the government extended the ban on dismissals on pain of double severance for a further two months while suspended workers (already numbering almost two million) are to collect at least three-quarters of their normal wages.

 

AGRI-AGRO

Farmers were reported to be upset by AFIP tax bureau requesting their harvest data ahead of its conclusion. The government is concerned that grain exports are being withheld while producers wait for the gap between the official and parallel exchange rates (with the latter almost doubling the former at times this month) to close. 

 

MORE MEMORANDUM MOVES

Treasury Prosecutor Carlos Zannini on Tuesday called for the trial of the 2013 memorandum of understanding with Iran to be quashed on the grounds that its inclusion of former Interpol secretary-general Ronald Noble meant that it could only be properly be tried by the Supreme Court (the only instance for trying foreign officials and diplomats not under Argentine jurisdiction). The trial centres on the Cristina Fernández de Kirchner administration allegedly guaranteeing impunity to the Iranian officials suspected of masterminding the 1994 terrorist bomb destruction of the AMIA Jewish community centre but Noble has denied receiving any request from the Argentine government to lift the Interpol Red Notices against the Iranian officials.

 

BOUDOU LIKELY TO GET HOUSE ARREST

Former vice-president Amado Boudou, sentenced to 70 months in prison for corruption, is now likely to serve out his sentence in the house arrest granted him by judge Daniel Obligado after prosecutor Javier de Luca declined to appeal the ruling to the Cassation Court.  

 

280,000 STUDENTS WITH UBA ONLINE

The University of Buenos Aires (UBA) has more online students than any other university in the world, according to its Chancellor Alberto Barbieri, with 280,000 students following over 2,000 courses in its UBA XXI programme and a further 70,000 registered. Online academic staff totals 12,000, of whom 2,000 have been added in the last month. The university year normally begins in March but when this was interrupted by quarantine, the start of normal classes and lectures was postponed until June yet this is increasingly in doubt while there is no satisfactory way of holding final examinations online.

 

TAPIA CONFIRMS HOLD ON AFA

Carlos Tapia, the son-in-law of teamster leader Hugo Moyano, was re-elected president of AFA Argentine Football Association on Tuesday (via Zoom by acclamation) with boosted superpowers for his new term running until 2025.

 

PRAT-GAY SLAMS MACRI’S ECONOMIC POLICIES

The first Finance minister of the 2015-19 Mauricio Macri presidency, Alfonso Prat Gay, has criticised its economic policies as “very bad,” especially its 2018 stand-by agreement with the International Monetary Fund (IMF) for US$56 billion dollars since, according to Prat-Gay’s perception, no IMF programme with Argentina has ever had a happy ending.

 

AMBASSADOR TO IRELAND DIES

Due to the disruptions of the coronavirus pandemic, news of the death and funeral of Argentine Ambassador to Ireland Laura Bernal, 63, yet another Covid-19 victim, has suffered delays in transmission. She died suddenly in her Dublin home last month and was buried late last week in Foxford, County Mayo, the birthplace of Admiral William Brown (founder of the Argentine Navy). Due to social distancing rules, just 10 people attended the funeral mass at St. Michael’s Church.

 

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