When asked how you think the economy will be next year, the 90.5 percent of the voters of the Frente de Todos, surveyed by the consulting firm Analogías in December 2019answered that better. The greatest expectation of this segment of the electorate was that the new government would produce a break with respect to the policies that marked the management of Together for Change.
In particular, 92 percent demanded a freezing of public service rates, 89.5 percent supported the enactment of an economic and social emergency law to give the president more power to resolve the crisis, 88.2 percent requested an extraordinary income tax from the banks, 80.8 percent demanded salary increases by decree, 78.1 percent said that to pay the external debt one had to grow first, 71.5 percent considered that there was to raise the tax on Personal Property and 64.9 percent were in favor of increasing withholdings on agricultural exports.
The ideology that characterized the voters of the current ruling party could be summed up in the slogan “fight capital”. It was expected that the Frente de Todos would stand firm with the privatized companies, the banks, the foreign creditors, the great fortunes and the ruralistas, and that it would play decisively in favor of a recomposition of the income of the popular sectors.
“There was a platform to carry out structural reforms”, estimates Analogías at present, based on the 2019 surveys that marked a broad consensus regarding the seriousness of the crisis and the need for the government to act decisively. 90.8 percent of the voters of the FdT expressed themselves in this way, while also a resounding majority of the voters of Together for Change, with 66.9 percent, admitted the existence of a “social and economic”.
The latest national survey by the same consultancy, from last month, reduced to only 23.1 percent the universe of those who believe that the economy will be better this year. 32.8 percent thought that it will be worse, 19.3 percent said that it will be the same and 24.8 percent that they do not know. The picture of Alberto Fernandez is divided between 34.1 percent positive and 63.6 negativewith 2.3 that was not defined.
A key point that exposes the radical change in expectations between the beginning of the current government and the present is the evolution of purchasing power. Now 47.3 percent of those surveyed maintain that this year there will be a fall, compared to only 16.7 percent who estimate that it will rise. 19.3 percent believe that it will remain the same and 24.8 percent do not know.
The president acknowledges that “there are problems with salaries” but he still does not want to repeat the measure he took at the beginning of 2020, of a salary increase by decree, arguing that parities are now working and the Government is promoting them, for example with advance calls to the Minimum Wage Council, such as the one that will take place again next week.
Fernández also highlights the growth in employment, which increases the wage bill. “Only by maintaining our inclusive development policies are we going to be able to generate work and create a more egalitarian society,” he said in the opening speech of the ordinary sessions of Congress, where he defended his moderate imprint.
Actions and results
“The Government complied with a good part of the program proposed in 2019: it declared an economic and social emergency as soon as it came to power, it suspended the increases in rates (although now it is beginning to raise them), it increased Personal Assets and during the pandemic it promoted the law extraordinary contribution of the great fortunes, adjusted the export rights of some agricultural productions, renegotiated (despite the differences within the coalition) the debt with the IMF and began to pay it and decreed in January/February 2020 an increase wages, although now there is a very strong social demand for the President to do it again”, they analyze from Analogías.
The President made a positive balance of central aspects of his management before the Legislative Assembly. He mentioned the two consecutive years of economic growth in 2021 and 2022, the 23-month rise in registered employment, the 29-month rise in employment in the industry, the record for private investment, the record for exports and imports, the advances in the knowledge economy, the record in hydrocarbon production, the record in tourist activity, the recovery of profitability in SMEs, the progress of regional economies, the restructuring of debts with private creditors and the IMF and the gradual macroeconomic ordering.
“I’m convinced that we have laid the foundations on which to build the great country we dream of,” he emphasized, by way of conclusion.
IMF and Edesur
As indicated above, both the image of Fernández and the expectations regarding the performance of the economy and popular income are at low levels. The social humor does not coincide with the evaluation made by the head of state of his administration.
The almost incredible succession of shocks of different kinds, such as the pandemic, the war in Europe, the historic drought, the rise in the interest rate in the United States to the highest levels in decades and now the financial tremors in that country and on a global scale cannot be left out of the analysis. And despite the fact that the response of the Frente de Todos government was substantially different from what Juntos por el Cambio proposed, the actions carried out were not enough to retain support from a significant portion of its voters in the 2021 legislatures and the perspectives that mark the polls are not the best for the next national elections.
Two cases from this moment show the disenchantment with the imprint of moderation. One is the government’s response to flagrant breaches of Edesur. Although it is true that the shareholders of the electricity distributor announced that they are leaving the country and put the company up for sale, and there is also a history of concession withdrawals that ended in millionaire lawsuits against the State in the World Bank court – which repeatedly fails in favor of the privatized ones beyond the disasters they have caused-, users, mayors and consumer entities demand that the Government not give any more thought to the matter and take away the concession.
Another fact is the renegotiation of the goals of the agreement with the IMF. The Government managed to move the reserve accumulation requirement, but did not modify the pattern of fiscal deficit despite the drought, which will hit revenue collection. The option to cut spending in a recessive scenario may punish the level of activity even more. In an election year, more than moderate, taking that path seems like a shot in the foot.