ARGENTINA: The 2025 Budget & more – 19th Sep 2024

¡Buenos días from Louse Point! This is the Rorshok Argentina Update from the 19th of September twenty twenty-four. A quick summary of what's going down in Argentina.

President Milei announced the twenty twenty-five budget to Congress this week, which includes a zero deficit policy as a key strategy to combat inflation. According to the budget, the government is predicting a 5% growth in GDP next year, with further increases in the following years, despite the current recession. The budget also projects an official exchange rate of 1,207 pesos per US dollar by the end of twenty twenty-five and expects inflation to drop significantly to 18%. This contrasts with the current inflation rate, which has surged over 230% in the last year.

The budget also includes cuts for provinces of about 20 billion dollars.

It’s been a busy week in Congress, and not all news are good news for the president. He faced a significant political loss as the Senate rejected his decree to allocate 100 million dollars to Argentina’s intelligence agency. This is the first time since nineteen ninety-four that both chambers of Congress have overturned a presidential decree. The vote, led by opposition lawmakers and some from Milei’s own coalition, raises concerns about how these intelligence funds were being used, with accusations that they may have been spent on politically questionable activities.

The Senate also passed two other important measures: an electoral reform to simplify voting and a law to increase university funding, though Milei vetoed this last one. The electoral reform introduced the use of a single paper ballot for future elections. Unlike the current system, where voters choose from multiple party ballots, this new format consolidates all candidates onto one sheet. Voters will mark their choices with a pen, rather than assembling a ballot from separate party slips. While the Senate approved the measure, it still needs final approval from the lower house of Congress.

The university funding law would have updated university budgets in line with inflation and provided regular raises for staff, but Milei vetoed it, arguing that the bill undermines his goal of balancing the nation’s finances.

Speaking of the president, on Tuesday the 17th, he hosted a barbecue at the Olivos Presidential Residence for the lawmakers who backed his veto of the pension mobility law. He’s calling these legislators heroes for supporting his decision to block a law that would have adjusted pension increases.

One last update from Congress before we move on: there’s been a recent controversy involving Senate advisors, where Bartolomé Abdala, a Senator from the ruling party, admitted that many of his advisors were working on his gubernatorial campaign rather than Senate duties. Vice President Victoria Villarruel then decided to implement a new rule requiring Senate administrative staff to clock in and out of work. Starting this week, around 3,500 administrative employees will use a fingerprint system to track their hours, aimed at addressing absenteeism and ensuring accountability. However, this measure specifically targets administrative workers and does not apply to political advisors, who may work irregular hours or from different locations.

If you had travel plans last week, you may have been affected by the pilots’ strike that led to the cancellation of more than 300 flights. The strike, organized by the APLA pilots’ union, disrupted air travel for 30,000 passengers, and aimed to secure wage increases to cope with high inflation.

In response, President Milei announced plans to declare the aviation sector an essential service to ensure some level of operation during such strikes. Under the new rules, airlines will have to maintain at least 50% of their flights during a strike, and workers must provide advance notice of at least five days before staging a strike. While the government argues that the regulations are necessary to prevent severe economic impacts and ensure connectivity, unions are challenging the rules, saying they infringe on workers’ rights to strike, and planning to seek legal redress.

In other news, Havanna, the iconic Argentine brand famous for its alfajores, is considering selling its Latin American operations. For those who don’t know, alfajores are a beloved Argentine treat consisting of two soft cookies filled with dulce de leche, often coated in chocolate or powdered sugar. Havanna, which began in Mar del Plata in the nineteen forties and now has a significant presence in Argentina and other countries from Latin America, has engaged with UBS BB Investment Bank to explore potential sale options.

The brand operates around 250 stores in Argentina and another 230 internationally, including in Brazil, Peru, and Spain, with last year’s revenue reaching approximately 170 million dollars.

On that note about treats, a project called Comedor Gourmet has been making the headlines this week. This initiative operates every Saturday and aims to make high-quality, aesthetically pleasing food accessible to those who typically can’t afford it by serving gourmet meals in one of the country’s poorest neighborhoods. They offer dishes like eggplant milanesas (which are similar to Schnitzels) and elaborate cakes, meaning the project not only provides nourishment but also seeks to elevate the standard of living and restore a sense of dignity and choice.

While some projects are born, others are left to die. The construction of Argentina’s first locally-designed nuclear reactor, CAREM-25, has come to a halt amid funding issues and worker layoffs. Since the start of the year, almost 500 workers have been let go due to a lack of government resources, raising concerns about delays in the project, which is close to completion. The National Commission of Atomic Energy has shifted focus to an engineering review, but critics worry that further delays and the loss of skilled professionals could harm the country’s nuclear industry.

In general, industrial activity has been struggling, with a drop of almost 13% so far this year, according to the latest report from the Argentine Industrial Union.

There’s been a bunch of sports news this week, starting with Argentina’s tennis team securing a spot in the twenty twenty-four Davis Cup Final Eight for the first time in five years. Sebastián Báez, Francisco Cerúndolo, Tomás Etcheverry, Andrés Molteni, and Máximo González defeated Great Britain and Finland and will now compete against either Italy or the United States in the finals in Málaga, Spain, from the 19th to the 24th of November.

On a related topic, Franco Colapinto, the twenty-one-year-old racing driver, has made history by becoming the first Argentine to score points in Formula 1 since Carlos Reutemann in nineteen eighty-two. In just his second F1 race, Colapinto clinched eighth place at the Azerbaijan Grand Prix, earning four points for both himself and his team, Williams. This result drew praise from F1 legends like Lewis Hamilton and Williams’ team principal James Vowles.

Talking about races, the Buenos Aires International Marathon is coming up this Sunday, the 22nd. The event will host 14,000 participants in a forty-two-kilometer race through the city’s most scenic spots. Starting at 7 a.m. from Figueroa Alcorta Avenue and Dorrego, the runners’ trail will include the Monumental stadium, the Teatro Colón, and Boca Juniors’ Bombonera stadium, before finishing back at the starting point.

Expect significant road closures starting early Sunday morning.

In our last sports update, the Argentine coach Mauricio Pochettino has been appointed head coach of the U.S. men’s national football team. Pochettino has experience managing top European clubs like PSG and Chelsea, and will lead the US team in their preparation for the twenty twenty-six World Cup.

Before we go, a recommended reading. The New York Times published an article titled Read Your Way Through Buenos Aires, written by the Argentine writer Samanta Schweblin. This article explores the literary culture of Buenos Aires, offering a guide for readers looking to connect with the city through its books. Schweblin suggests works by key Argentine writers like Borges and Cortázar, as well as contemporary authors like Mariana Enriquez and Selva Almada. Plus, she highlights bookshops, reading spots and audiobooks that capture the spirit of Buenos Aires. Follow the link in the show notes to know more!

Aaand that’s it for this week! Thank you for joining us!

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¡Nos vemos la próxima semana!