Heavy Rainfall Causes Floods & more – 24th Aug 2023

¡Buenos días from The Springs! This is the Rorshok Argentina Update from the 24th of August twenty twenty-three A quick summary of what's going down in Argentina.

Last week, the Buenos Aires Province experienced heavy rainfall, resulting in damage and an increase in the water level of the River Plate, which led to flooding in specific areas. Among these, the city of La Plata bore the brunt of the impact, and its residents had to be evacuated. Julio Garro, the mayor of the city, confirmed that the amount of precipitation recorded was of historical significance.

On top of that, over fifty flights were affected by the thunderstorms. Both the Jorge Newbery and Ezeiza International Airports had to cancel at least eight flights and delay forty. In addition, certain flights had to be redirected becuase they couldn’t land.

As if the weather wasn't reason enough to cancel flights, baggage handlers from private airlines JetSmart and Latam carried out a strike. This protest led to the cancellation of forty flights, impacting over 10,000 passengers. The Ministry of Labor had to intervene to end the strike. However, the challenges didn’t stop there. Frustrated passengers, a considerable number of whom had spent the night at the airports, organized protests in the Customs area of the Ezeiza Airport complaining that their baggage was not being returned.

Someone who had no issue boarding his plane was Sergio Massa. But before heading to Washington to meet with the IMF, the Economy Minister met up with President Alberto Fernández and Vice-President Cristina Fernández de Kirchner to find a way to win over voters. Apparently, Massa has prepared a ‘two-measures-per-day’ plan to be delivered throughout the week.

Although nothing has been confirmed yet, there’s speculation about a forthcoming economic package aimed at addressing the decline in purchasing power resulting from the devaluation. Additionally, officials are exploring the possibility of augmenting the funding allocated to social organizations, which are gearing up for protests.

The proposed package is also expected to introduce fresh credit alternatives for retirees, and there's a chance of an additional one-time bonus payment distributed in installments for individuals with lower incomes.

One measure that has recently been put into effect involves the stabilization of oil prices. Crude oil producers in the Vaca Muerta shale region will receive a fixed rate of fifty-six dollars per barrel until the end of October. This decision comes in response to a twelve percent increase in the prices of pump refiners, including YPF, prompted by a decline in the value of the peso.

In return for this arrangement, Massa will outline certain benefits for drillers. These include the postponement of export taxes, expedited access to foreign currency, and potentially, exemptions from certain import duties. Still, the capping could have negative consequences for activity in Vaca Muerta.

On the bright side, there’s no rush to fill up your gas tank ahead of a potential price hike – at least not until November.

Regardless of the measures the Economy Minister presents, the end goal is clear: to get more votes in the upcoming election. And speaking of the election, the Buenos Aires City government has decided to suspend the use of electronic voting for the time being. This choice comes in response to the significant delays experienced during the primaries, and the government will soon announce the alternative voting system to be employed. According to reports from the Télam news agency, they are leaning towards paper ballots but in a new kind of ballot box.

This means that residents of Buenos Aires City will employ the same voting procedure twice during the general election. They will cast their votes once for the President, Vice President, national deputies, and senators, and subsequently, for local authorities. Foreign citizens, on the other hand, will only participate in the latter election. While they don’t possess the right to vote in national elections, they retain the ability to do so in provincial and/or municipal elections as dictated by the existing regulations of each province.

On that note about getting more votes, there has been a notable shift in the relationship between presidential candidate Javier Milei and former president Mauricio Macri following the primaries. In what appears to be a strategic move aimed at attracting new voters, Milei unveiled his desire to appoint Macri as a special plenipotentiary ambassador to represent Argentina internationally. Macri, however, is a key leader of the Juntos por el Cambio coalition, whose presidential candidate is Patricia Bullrich.

This could have all sorts of consequences, starting with potential ramifications for Bullrich’s campaign as she loses the backing of one of her party’s most prominent leaders. Meanwhile, Milei is already facing some backlash, given that his philosophy centers on the notion that a new Argentina cannot be built with the same old leaders at the helm. Nevertheless, he needs more than thirty percent of the vote to win the election, and Macri could hold the key to persuading the specific demographic he aims to reach.

Back to the topic of the Economy Minister, Massa announced on Tuesday the 22nd that both the World Bank and the Inter-American Development Bank have granted Argentina loans totaling around 1.3 billion dollars.

His meeting with the Inter-American Development Bank’s president ended with the announcement of 650 million dollars in funds for three specific objectives: funding for the construction of a bridge connecting the provinces of Corrientes and Chaco, enhancing the Salto Grande dam jointly managed by Argentina and Uruguay, and facilitating the expansion of exports within the knowledge economy sector.

Speaking of dollars, the BBC published an article titled “How Argentina learned to love the US dollar.” The piece summarizes Javier Milei’s plans to replace the country’s peso with the US dollar, but gives some historical context as to why the dollar already plays a significant role in Argentina's economy. It also mentions some of the main exchange rates right now, (although some are already outdated) and compares dollarization plans to what Brazil did in the 90s by pegging its currency to the dollar with greater flexibility.

You can find the link to the article in the show notes.

On Sunday the 20th Argentina celebrated Children’s Day and amid the context of peso devaluation and a sudden increase in the dollar, the Argentine Confederation of Medium Enterprises reported a slight decline in retail sales. The Small and Medium Enterprise Retail Sales Index showed an average sales ticket of $12,000 pesos (less than twenty dollars according to the parallel exchange rate) with consumers gravitating towards cheaper products. Toy store sales were down two percent, impacted not only by rising prices but also limited product variety, while bookstores experienced an eight percent setback due to a twenty percent price increase.

From children to grandmothers, Estela de Carlotto, the Grandmothers of Plaza de Mayo’s President, was honored at a ceremony held at the International Criminal Court’s headquarters in The Hague, the Netherlands. The event celebrated the Grandmothers’ human rights efforts, but during the ceremony, de Carlotto also acknowledged the Dutch journalists who courageously reported on the Mothers of Plaza de Mayo during the nineteen seventy-eight World Cup, when a military junta governed Argentina.

Among the journalists, Jan van der Putten conducted a significant interview with the Mothers during the nineteen seventy-eight World Cup’s opening ceremony. Photojournalist Bert Nienhuis and reporter Frits Barend covered the mothers’ march, with Barend even pretending to be a Dutch footballer to secure an interview with the dictator Jorge Rafael Videla after Argentina’s victory in the nineteen seventy-eight tournament.

To end on a lighter note, let's discuss two notable triumphs: During the long weekend, Alfajores Quiero emerged as the winner of the Mundial del Alfajor. This event allowed both food enthusiasts and the public to savor alfajores from various parts of the globe. The panel of judges assessed participants based on factors like high-quality ingredients and innovative recipes. Ultimately, the producers hailing from Campana in the Buenos Aires province secured the top prize.

The second notable triumph is that of Las murciélagas, or the Bat Girls, Argentina’s national team for blind women’s football. They just made history by winning the first World Cup for the International Blind Sports Association in Birmingham, England.

That’s it for this week! Thanks for joining us!

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¡Nos vemos la próxima semana!