Evacuation from Israel & more–19th Oct 2023

¡Buenos días from The Springs! This is the Rorshok Argentina Update from the 19th of October twenty twenty-three A quick summary of what's going down in Argentina.

We started the week by welcoming young Argentine citizens from Israel who were evacuated following the attacks by the Hamas terrorist group. Argentina has the largest Jewish population in Latin America, and over 1,400 citizens or dual citizens were registered to be repatriated to Argentina.

On Sunday the 15th, a flight of mostly young high school students landed at Buenos Aires’ Ezeiza International Airport as part of the Foreign Ministry’s “Safe Return Operation.” They were met with tears, hugs, and applause from waiting relatives. This first flight on an Air Force plane carried some 250 passengers, and many more will come as the government aims to bring everyone home as fast as possible.

Other issues pale in comparison to the fears these kids are facing, but it’s still been a turbulent week as the elections draw near. After seeing a drop in Argentina’s currency, a prosecutor launched a criminal case against presidential candidate Javier Milei, who shared some harsh opinions on the peso and advised citizens not to save in the local currency. President Fernández called for this investigation, saying that Milei’s actions were undermining the democratic system and inciting fear among the public.

Presidential candidate Patricia Bullrich also made waves by announcing that if elected, Horacio Rodríguez Larreta would be her Cabinet chief. This alliance follows their contentious primary battle within the Together for Change or Juntos por el Cambio coalition, which saw Bullrich emerge as the winner. By enlisting Larreta, she hopes to strengthen unity within the coalition and secure support from Larreta’s voters.

Larreta will continue as Buenos Aires City mayor until December, with Jorge Macri being the likely successor.

On the 17th of October, which marks Peronist Loyalty Day, Economy Minister Sergio Massa wrapped his campaign with a message of optimism, declaring that the worst of Argentina’s economic turmoil is passing. He stressed the importance of national unity and encouraged supporters to reach out to those with reservations, pledging a brighter future they’ll construct together.

Speaking of Massa, on Sunday the 15th he made an appearance on the show of TV host and actress Mirtha Legrand. This well-known TV show has been running for about fifty seasons and typically features her hosting guests for lunch or dinner and engaging in conversations with them. During the dinner, Massa candidly stated that not all ministers from the current Alberto Fernández administration would be part of his government if he clinches the presidency.

He also highlighted the significance of including former Economy Minister Roberto Lavagna in his potential government. Lavagna played a pivotal role in Argentina’s economic recovery after the two thousand one financial mess, which was marked by a severe bank run, currency devaluation, and a series of governmental changes due to political instability.

When questioned about retaining Kirchnerites in his administration, Massa replied that he is confident that most Argentines will align with his vision at the ballot box.

Meanwhile, in a cheeky nod to presidential frontrunner Javier Milei’s vision of a state-free economy, the government decided to give public transportation users the option to give up the current subsidies. Starting on Friday the 20th of October, passengers will be able to opt out of the subsidies on subway and bus tickets and pay the full fare. For instance, in Buenos Aires, that translates to 1,100 pesos for a subway ticket (about one dollar and fifteen cents at the parallel exchange rate) and 700 for buses (less than a dollar), quite a hike from the current eighty pesos fare (less than ten cents).

It’s doubtful that many passengers will opt out, but those willing to pay the full price can make the switch through a sworn statement on the SUBE website. Link in the show notes!

Another big reform that made the headlines this week is that of the rental law. The new version is now official, and some significant changes in the law include more frequent rent updates, now happening every six months. The increases are tied to either inflation or salary bumps according to the official statistical agency’s wage variation index, depending on which figure is lower. The minimum lease duration remains at three years, following the Senate’s rejection of a proposed reduction to two years in September.

The law also requires that rent agreements be in the national currency, the peso, although there’s no clarity on how they will verify that landlords and real state agencies are complying with it. Additionally, landlords will enjoy tax benefits, and advance rent payments are now prohibited, except for the usual one-month advance.

It was a busy week for the Chamber of Deputies, as they also gave the green light to a bill for refunding the value-added tax (or VAT) on everyday goods purchased with debit cards. This initiative follows the temporary VAT refund program launched in September, which we talked about a couple of weeks ago. The temporary program will be in force until the end of the year. However, if the Senate also approves the bill, it will become a permanent law in January twenty twenty-four.

VAT in Argentina stands at twenty-one percent, and the refund will be up to that percentage of the monthly cost of the Basic Food Basket for an average family, which currently stands at around 300,000 pesos (some 300 dollars at the parallel exchange rate) but will be updated according to inflation. It will benefit recipients of family welfare and labor programs, workers, pensioners with low incomes, domestic workers, and unified tax-paying workers.

Moving on, don’t be surprised if you encounter fuel shortages on both sides of the River Plate. In Uruguay, they are experiencing a lack of diesel affecting about half of the fuel stations in Montevideo, Canelones, and Maldonado. They pointed fingers at a strike by the Ancap oil company workers, which disrupted fuel deliveries over the weekend, but they expect things to return to normal in a few days. Meanwhile, in Argentina, rural producers are also bracing themselves for fuel shortages that could put the brakes on essential activities like planting, harvesting, and transport.

Speaking of fuel, a conflict is lighting up in the South Atlantic area. An Argentine nonprofit that’s dedicated to sustainable fishing is sounding the alarm about a brewing diplomatic spat between Argentina and the UK. They’re saying illegal fishing boats are out and about near the Malvinas Islands, and these vessels are waving unlawful British fishing licenses. The organization is calling for the British government to stop handing out these permits, which not only messes with Argentina’s conservation efforts but also takes a big bite out of the country’s economy, hitting coastal communities hard.

On that note about fishy business, the police shut down one of Argentina’s biggest illegal trading houses. This happened during a raid on black market currency traders known as cuevas. The head of this house, Ivo Esteban Rojnica, known as The Croatian, is accused of having stretched across various countries, including the United States and Spain, with offshore accounts and real estate deals.

Back to the topic of the elections for a second, Claudio Tapia, the head of the Argentine Football Association, the AFA, publicly expressed strong support for Sergio Massa’s presidential candidacy. This support is rooted in a long-term relationship between Massa and Argentine football leaders, which includes a tax measure benefiting football clubs. Massa, who has often worked behind the scenes in football, has strengthened his position in the sport over the years, aligning with key figures and influential clubs.

Also on the topic of football, Lionel Messi and Nicolás Otamendi maintained the National Team’s winning start in World Cup qualifiers. On Thursday the 12th, the team saw a hard-earned 1-0 victory over Paraguay, followed by a 2-0 victory over Peru on Tuesday the 17th. Argentina is now leading the board with a perfect score in the South American qualifiers for the twenty twenty-six World Cup.

It was also a successful week for the National Rugby Team. Los Pumas defeated Wales in the World Cup quarter-finals despite being the underdogs and moved into the semifinal stage. On Friday the 20th, they will face New Zealand in what promises to be an epic but complicated match.

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

Before we leave, we have a quick question for those following us for a while. How are we doing on bias? Ax grinding? We try to be independent and stick to the facts and context. How are we doing? Do we seem even a teensy bit biased? We are happy to see the Rorshok Argentina community is growing and want to be the best at what we do! Tell us your thoughts and opinions at argentina@rorshok.com

¡Nos vemos la próxima semana!