Views on the Venezuelan Regime Affect MERCOSUR Members & more –13th July 2023

¡Buenos días from The Springs! This is the Rorshok Argentina Update from the 13th of July twenty twenty-three A quick summary of what's going down in Argentina.

The Mercosur summit ended on a frustrating note last week as Argentina, Brazil, Paraguay and Uruguay showed different views on how Maduro’s regime treats Venezuela’s opposition politicians. Uruguay’s president expressed dismay over the efforts to re-introduce Venezuela into the fold, highlighting concerns over democracy and human rights. Paraguay took a similar stance, while Argentina and Brazil had a more benevolent view.

In the end, Uruguay’s president, Luis Lacalle Pou, didn’t sign the summit’s final communiqué, refusing to endorse a statement that said members would make bilateral agreements with the European bloc while talks over a regional deal are ongoing.

Speaking of Uruguay, Montevideo and its surroundings are facing big water issues. The Paso Severino dam, which is the main source of fresh water in the metropolitan area, is practically exhausted due to the drought, hindering production. Reserves are running out and that is affecting the local industry, as the state water company OSE is distributing water with high level of salinity,.

A meatpacking company, for example, had to send 700 workers to collect unemployment insurance when it halted production.

On Friday the 7th, Alberto Fernández spoke on the phone with Lacalle Pou to offer supplies and personnel. That included a Navy ship with 300,000 liters of drinking water available in Montevideo in less than ten hours. However, the president of Uruguay declined the aid, which is yet another sign of the political differences between the two.

On that note about supplying neighboring countries, Argentina forecast to stop buying Bolivian gas next year. With the inauguration of the new gas pipeline in Vaca Muerta, Argentina is likely to become self-sufficient as of twenty twenty-four. According to Argentina’s Ambassador to Bolivia, this shouldn’t be a problem for Bolivia, as the demand for their gas from Brazil is still significant.

In greener news, the American agribusiness and food company Bunge and the multinational energy corporation Chevron Corp have acquired a seeds business in Argentina. The business focuses on a cover crop that contains high levels of vegetable oils, which is key to the production of green diesel. This purchase is part of two American companies’ plan to source low-carbon feedstock to meet the growing need to produce renewable diesel.

Back to the gas pipeline for a second, Independence Day poetically marked its inauguration in a ceremony attended by President Fernández, Vice-President Cristina Fernández de Kirchner, and Economy Minister Sergio Massa. Well, at least for now. On Monday the 10th, Massa said during a radio interview that he isn’t sure if he’ll remain in his role as he runs for president in this year’s election. He specifically said that it’s clear to him that his main responsibility is to be the economy minister, and that he can only be a presidential candidate after six pm, but he will evaluate together with the president and the vice president if it makes sense for him to continue in his position.

Massa is the third economy minister of Fernández’s administration, which means finding a replacement would mean having had an average of one minister per year.

Since we’re both on the topic of the economy and the elections, Argentina’s Central Bank expects to hold its benchmark interest rate at ninety-seven percent through the PASO primaries. Albeit slightly, monthly inflation slowed in June, and investors hope a shift toward a pro-business government will put an end to years of financial mismanagement in the country. This is why everyone’s holding their breath until they see what scenario the primaries forecast.

In the meantime, the Salary Board will meet again to adjust the minimum wage based on the criteria the Economy Minister established. The organization, which includes workers’ organizations, business chambers, and the government, wants to adjust the minimum wage, which currently stands at approximately 90,000 pesos (some 330 dollars at the official rate or 180 at the parallel rate).

Updating the minimum wage also means updating social welfare programs that are calculated as half of the minimum wage. As with the previous debate in March, the executive board hopes to reach a new short-term agreement, probably covering the next three months.

Also on the topic of earnings, a new private study estimates that Argentina ended the first half of the year at a poverty rate of forty-two percent. This means that a further one million people have slipped below the poverty line since the most recent official figure the government published back in March.

According to the director of the master’s program in Econometrics at the Torcuato Di Tella University, the increase in the year-on-year poverty rate is due to an increase in total household income that is considerably lower than the increase in the value of the total basic food basket. Lower middle classes have fallen into poverty because their salary is not enough to live on as it is devoured by inflation. They are not in that category because of their residential infrastructure conditions or educational human capital.

Another report exposed a stark imbalance between public and private employment. According to the Institute for the Study of the Argentine and Latin American Reality, taking into account the three levels of national, provincial, and municipal governments, public-sector employment rose thirty-four percent between twenty eleven and twenty twenty-two, while private-sector jobs increased only three percent over the same period.

Córdoba is the province with the lowest increase in public employment, while Misiones, Chubut, Santa Cruz, and San Luis top the list.

While the Salary Board debates the new minimum wage, Congress is busy debating an extension on parental leave. Paid parental leave for pregnant people in Argentina is ninety days. However, their partners only have two days off after the birth of their children. Deputies are aiming to extend it to 126 days for the expecting party, and forty-five days for their partners.

According to Unicef, Argentina is amongst the Latin American countries with the least number of days for paternity leave. Chile is at the top of the list, with an average of thirty-one weeks.

At the same time, on Thursday the 6th, the Argentine Chamber of Deputies unanimously voted to repeal a law from nineteen twenty-four barring women from working in unhealthy industries or doing dangerous tasks, including working night shifts. The law isn’t meaningfully enforced across the labor market, so most people ignore its existence, but it was still important to vote it out.

Speaking of women who are fighting for equality, on Saturday the 8th, Argentina unveiled the Women’s World Cup squad. Striker Yamila Rodriguez is the team’s figurehead, while goalkeeper Laurina Oliveros will miss out after fracturing her left hand. The team faces difficult games, but their goal is to qualify for the knockout stage.

This will be Argentina’s fourth appearance at a Women’s World Cup and its second in a row. Follow along as the tournament kicks off on the 20th of July.

As the women’s national team gets ready for their first match in the tournament, football superstar Lionel Messi is preparing for his inauguration at Inter Miami. On Friday the 7th, the club announced that it will hold a presentation event called The Unveil on Sunday the 16th, which will include exciting entertainment, speeches on the pitch, and more. As for Messi’s official debut, he’ll play against the Mexican club Cruz Azul in the new Leagues Cup on the 21st of July, a tournament between top-flight clubs from Major League Soccer and the Mexican league.

Before we go, allow us to share an interesting read. The Buenos Aires Herald newspaper published an article in English titled An exploration of the Argentine world of alfajores. As the name indicates, this piece tells the story of the origins of the traditional Argentine stuffed cookie and ranks the best ones according to three categories: bougie brands, kiosco favorites, and wild cards. If you want to know more about the wonderful world of alfajores, follow the link in the show notes.

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

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