ARGENTINA: The Nuclear Plan & more – 24th Dec 2024

¡Buenos días from BA! This is the Rorshok Argentina Update from the 24th of December twenty twenty-four. A quick summary of what's going down in Argentina.

On Saturday the 21st, President Milei unveiled the Argentine Nuclear Plan, which aims to position Argentina as a global energy leader by expanding the country’s nuclear capabilities. The plan is to partner with a US investor to develop a small modular reactor, or SMR, at the Atucha Nuclear Power Plant in the Buenos Aires province, and use it to power energy-intensive AI data centers, especially in the Patagonia region. It also includes developing uranium reserves for domestic use and export. The first plant could be operational by twenty thirty, positioning Argentina as a leader in nuclear energy and AI-related infrastructure.

However, the announcement omitted a key detail: the SMR project, CAREM-25, had been in progress since twenty fourteen but stalled in September twenty twenty-four after the administration cut its funding.

On that note, Federico Sturzenegger, the Deregulation Minister, proudly shared a list of all the government departments and offices that the current administration has shut down since taking office. In five months, they closed 200 state agencies and offices, mainly in sectors like human rights, gender policies, climate change, and cultural preservation.

Critics argue these cuts undermine key public services, while government officials defend these moves as eliminating unnecessary entities and shifting responsibilities to private companies or local governments in the name of federalism.

You may recall President Milei also introduced an exam for state workers designed to assess their qualifications. Well, so far, the government has seen 96% of the initial participants pass. This has prompted the ATE union to call for job stability for temporary and self-employed workers who passed, demanding they be made permanent staff.

Rodolfo Aguiar, the union’s leader, criticized the government’s portrayal of public employees as unqualified and suggested that government officials, including ministers and directors, should also undergo similar evaluations. Despite the positive results, passing the test doesn’t guarantee rehiring, but it is mandatory for contract renewals.

Also on the topic of employment, the National Institute of Statistics and Censuses, or INDEC, registered that salaries in Argentina rose by 4% in October, outpacing the month’s 2.7% inflation rate. However, despite this increase, real wages have taken a hit, showing a drop of almost 9% in purchasing power compared to last year.

The INDEC also informed that the average monthly income for employed people in urban areas during the third quarter of twenty twenty-four was slightly over 600,000 pesos, about 530 dollars at the parallel exchange rate. Income inequality saw only a slight improvement compared to last year. It terms of the gender pay gap, men made on average 38% more than women.

The good news is that starting from Monday the 23rd, the dólar tarjeta or credit card dollar rate for purchases in foreign currency will drop to around 1,360 pesos thanks to the removal of the PAIS tax. While it’s cheaper than before, it’s still over 200 pesos pricier than the MEP dollar, a popular option for travelers looking to buy foreign currency. Basically, it’s still better to pay off dollar expenses on your credit card with dollars rather than pesos.

The end of the five-year tax, which was introduced during Alberto Fernández’s presidency, will impact tourism expenses, imports, and streaming subscriptions.

Speaking of dollars, the government is working with banks to expand dollar lending across more sectors, aiming to offer US dollar loans to both businesses and individuals, including for mortgages. Currently, dollar loans are only available to companies that earn in foreign currency.

From loans to investments, or investments gone wrong, the police arrested seven individuals connected to the RainbowEx Ponzi scheme in a major operation in the town of San Pedro. This scam gained attention in October and involved between 12,000 and 20,000 residents of the town, to whom the scammers promised daily returns of 1-2% through cryptocurrency trading.

In reality, there was no investment, as the scheme used new investors’ money to pay older ones. Authorities raided twenty-two locations in San Pedro and Bahía Blanca, in the Buenos Aires province, seizing around 3.5 million dollars in cryptocurrency and cash, alongside other assets.

Now, we’ve got an update on a story from last week’s episode: A federal court has ruled that the session in which Congress expelled Edgardo Kueider, the former senator who was arrested at the Paraguay-Brazil border with over 200,000 dollars in undeclared cash, was valid. This comes despite Milei’s argument that the Vice President shouldn’t have presided over the Senate because he was outside the country.

Similarly, two senior officials from Argentina’s tax collection agency, ARCA, and a deputy from the PRO party are facing accusations of owning undeclared real estate in the US. Investigations revealed that Juan Pazo, the head of ARCA, Andrés Vázquez, the director of the General Tax Directorate, and the National Deputy Cristian Ritondo each own properties in Miami that they failed to report to the country’s Anti-Corruption Agency.

Pazo, appointed by Milei in December, has been linked to a Florida-based company that owned several apartments. Despite these allegations, the government has dismissed the matter, with no plans to take further action.

Since we’re on the topic of suspicious movements, the Supreme Court declared unconstitutional a clause in the constitution of the northeastern province of Formosa that allowed unlimited reelection for governors and vice governors, targeting Governor Gildo Insfrán, who is serving his eighth consecutive term. While the ruling deemed indefinite reelection a threat to democracy and the separation of powers, Insfrán will complete his term, ending in twenty twenty-seven.

Another story that made the headlines is the Russian missile strike on Ukraine’s capital Kyiv that damaged multiple embassies, including Argentina’s. The Argentine Foreign Ministry condemned the incident as a serious breach of international law, emphasizing the obligation to protect diplomatic missions. Argentina’s ambassador confirmed that while the embassy suffered material damage, no staff were harmed.

In other news, summer is finally here and as people take some time off, many are flocking to destinations like Brazil and Uruguay. A new article by Bloomberg titled Milei’s Peso Policy Sends Argentines to Brazil’s Beaches for the Holidays explains why international travel has become unusually affordable this year, driven by what the reporter calls an artificially strong peso. The economic policies have kept the peso’s value relatively stable, boosting purchasing power abroad.

With Brazil offering favorable exchange rates and lower costs, many Argentines are embracing the opportunity for budget-friendly vacations, leaving domestic tourism operators struggling to fill rooms.

Follow the link in the show notes to read the full article!

For those who will be in Buenos Aires for New Year’s Eve, Time Out magazine published a listicle with eleven luxurious and unique ways to celebrate, including fine dining, live music, rooftop parties, and stays in elegant locations. The suggestions cater to diverse preferences, from rooftop cocktails to barbecue feasts.

Link in the show notes!

If you’re looking for something to do later this summer, the music festival Cosquín Rock will celebrate its 25th anniversary with a massive two-day event in Santa María de Punilla, in the Córdoba province in central Argentina, on the 15th and 16 of February. Featuring over 100 artists, this iconic event continues its tradition of bringing together Argentina’s top talent and international acts.

Tickets range from general admission to VIP packages, starting at 140,000 pesos (about 120 dollars at the parallel exchange rate) for a one-day pass. Nearby accommodations fill up quickly, but surrounding towns and camping sites offer alternatives.

For sports fans, we have good news and bad news. Let’s start with the bad news: Franco Colapinto, the Argentine racer, won’t be competing in the twenty twenty-five Formula 1 season opener. Despite the disappointment, Colapinto is set to remain a reserve and test driver for Williams, contributing to car development through testing and simulation. While his immediate F1 debut is off the table, opportunities could arise during the midseason review in August if teams reevaluate their driver lineups.

The good news: FIFA crowned Emiliano “Dibu” Martínez as Best Goalkeeper for twenty twenty-four, marking his second win in three years. The Aston Villa star and Argentine national team hero continues to be celebrated for his remarkable talent and impact, both for club and country.

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

We wanted to take the time to thank everyone for tuning in, subscribing, and sharing your thoughts with us. Your support means the world, and we’re so grateful to be building this incredible community together. Wishing you a joyful, warm, and wonderful holiday season.

¡Nos vemos la próxima semana!