Primary Elections around the Corner & more – 10th Aug 2023

¡Buenos días from Greenway Parks! This is the Rorshok Argentina Update from the 10th of August twenty twenty-three A quick summary of what's going down in Argentina.

It’s impossible to start this episode with any other topic than the one dominating the headlines: the primary elections. They are just around the corner, taking place on the 13th of August, and thousands of citizens are currently undergoing training as poll officials. Only in the Buenos Aires province, the Federal Court selected more than two thousand citizens to receive training, each training course organized through a collaboration between the Office of the Governor of Buenos Aires, the Ministry of Government of the Province, the Federal Court Number 1 of La Plata, the National Electoral Chamber, and more than twenty public universities.

Meanwhile, more than a million teenagers are gearing up to vote for the first time. Ever since the voting age was lowered to sixteen in twenty twelve, those aged sixteen and seventeen became eligible to vote, although there’s no penalty for those who don’t, unlike what happens with adults between eighteen and seventy-five. This means that more than three percent of the total registered voters this year may be heading to the polls for the very first time.

As the 13th of August draws near, candidates are closing their campaigns. Javier Milei, the libertarian contender for the presidency under La Libertad Avanza, concluded his with a high-energy event in Buenos Aires’ Movistar Arena. He delivered a fiery thirty-minute speech and broadcast a rally on YouTube, which included his controversial dollarization proposition and ended with a call for freedom.

The other candidate that made the headlines was not a presidential one, but rather the city mayoral candidate, Jorge Macri. The PRO party candidate pledged to replace the existing SUBE payment card for public transport with more modern options like apps and credit cards. Jorge Macri said that the current payment system has become outdated and inconvenient, citing instances where people couldn't find their SUBE card or struggled to top it up, especially tourists. Notably, the Córdoba and Salta provinces have previously adopted contactless debit cards and mobile phone-linked bank accounts to pay for public transport.

The Automotive Transport Business Association, however, cautioned that such a change would require thorough study due to the multifunctional aspects of the SUBE card beyond payment.

Speaking of the elections, investors are tiptoeing back into the Argentine stock scene, hoping for positive market changes after the elections. Many are eyeing US-listed shares of companies like Globant, Mercado Libre and Arcos Dorados, which do business in Argentina but also across other countries in Latin America, so they aren’t as vulnerable to its risks. Still, they hesitate to dive in fully until long-term stability is established.

Also related to investing, Bloomberg reported that investors are starting to brace for a twenty percent currency devaluation after the primaries. The gap between the official exchange rate of 277 pesos per dollar and the futures currency contracts, has widened due to this anticipation. Experts expect the official dollar rate to reach 329 pesos by the end of August.

On a related note, inflation surged by around 7% in July, contributing to a staggering increase of 118% over the past year. This rise is slightly higher than the previous month, with cumulative price hikes reaching around 62% between January and July.

The good news is that Economy Ministry updated the minimum taxable income for income tax, or impuesto a las ganancias. Starting August twenty twenty-three, the tax will only be applicable to monthly salaries exceeding 700,000 pesos gross (some twelve hundred dollars at the parallel exchange rate). This update is expected to exempt around a million individuals from paying taxes.

Also relevant for taxpayers and freelancers: Economy Minister Sergio Massa anticipated new benefits for programmers, gamers, graphic designers, and all entrepreneurs who sell their services internationally. Called MonoTech, as it pertains to the tax known as monotributo, the program enables freelancers to invoice up to three thousand dollars per month, which can be directly credited to their own bank account.

Furthermore, they will only pay an integrated tax between 1.5% and 3.5%, which will be progressive based on the invoiced amount. Banks will act as collection agents at the time of transfer receipt.

The initiative aims to bring these individuals out of the informal sector, ensuring they receive proper compensation. Plus, it will boost foreign currency earnings from unrecorded export services. Legislatively, the MonoTech program received preliminary approval in the Chamber of Deputies, and it now awaits approval in the Senate.

If you’re a freelancer but not an Argentine resident, you may be interested to know that Preply, a language learning app, conducted a study that ranked Buenos Aires among the best Latin American cities to work remotely from. The study placed Buenos Aires as the second-best city in the region, following Santiago de Chile, which took the lead, and ahead of Lima, Peru, in third place.

Globally, the survey was conducted based on ten influential factors across three research domains: quality of life, climate and environment, and costs. As Spanish is one of the most widely spoken languages in the world, cities in the Latin American region stand out.

If you find yourself working from the Buenos Aires metropolitan area or any of the northwestern provinces of Argentina, watch out for the new mutation of the dengue mosquito. Argentina’s National Council for Scientific and Technical Research, commonly known as Conicet, identified new genetic mutations that make the species resistant to typical pesticide doses. Researchers are now suggesting alternative methods to keep mosquitoes away, such as biological controls.

So look out for your health, but also… are you looking out for your mental health? This week, The Sunday Times published a piece titled “Argentinians skip meals to pay for therapy.” Leading with that controversial header, the article by the British newspaper covers the economic issues that prompt people to focus on short-term spending. That includes Renata Anelli, a twenty-one-year-old student from Buenos Aires who is making sacrifices to afford therapy, such as foregoing two meals a week in order to cover the cost of her sessions.

To give it a read, follow the link in the show notes.

Speaking of meals, beef prices are set to rise in the coming months. Despite a stable beef market this year due to increased supply from cattle markets after the drought, recent measures that weakened the exchange rate for corn exports have pushed up domestic feed costs.

The good news is that Argentina is set to open its first lithium battery cell factory in September, with plans to have fifty percent of each battery’s components produced locally. The state company Y-TEC, which corresponds to the tech arm of YPF, the state oil company, will open the factory in La Plata, while a larger plant is scheduled to begin operations in Santiago del Estero in twenty twenty-four.

Also regarding YPF, the company is set to receive a 375 million dollar loan from the Development Bank of Latin America and the Caribbean to support its transition to less-polluting fuels. The loan will fund improvements in YPF’s refineries and expand its refining capacity to produce ultra-low-sulfur fuels.

From one loan to another, Argentina is obtaining a 775 million dollar loan from Qatar to repay the International Monetary Fund. As the country’s foreign reserves remain low, Economy Minister Sergio Massa had to resort to an agreement with the Middle Eastern nation to avoid defaulting. The loan will be repaid in August once the IMF board approves a $7.5 billion disbursement agreed upon between Argentina and the IMF’s staff.

And to close this edition, a piece of trivial news that has something to do with Qatar too. The Argentine goalkeeper Emiliano “Dibu” Martínez criticized the new football rule by FIFA known as the “anti-Dibu law,” which restricts goalkeepers’ actions during penalty shootouts. Martínez gained fame for his antics at the posts during both the Qatar World Cup and Copa América, which earned him the love of the nation. However, the rule change targets his tactics --- and despite joking about it being introduced “too late”, Martínez argued it favors penalty takers and limits goalkeepers.

Aaaaand that’s it for this week! Thanks for joining us!

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¡Nos vemos la próxima semana!