The Latin American Report # 220

Argentina continues to attract a lot of attention. These last days, between interviews given by Milei to major media both in the international context—Bloomberg—and regional context—CNN in Spanish—, the visit of the head of the Southern Command—sent by Washington to "measure" the commitment of the Casa Rosada—, and the permanent analysis on the socioeconomic impact of the harsh fiscal adjustment boosted by the Government of La Libertad Avanza, the Argentine reality has continued to be very present in the public discussion. On the latter issue, the views continue to be very interesting. The liberal bloc assumes—sometimes too quickly, tiptoeing—the hard blow to the hepatic area that the libertarian adjustment has meant for society. In any case, they make it clear that all responsibility continues to fall on the Peronism of Cristina and Alberto Fernández, who "spoiled" the people by making them believe that the arms of the State are infinite. Everyone has to learn to get ahead on their own feet, enter the social jungle, and not be crushed by elephants or eaten by lions.

In that sense, another thing that mileísmo is making clear is that its commitment ultimately reaches the middle class. I base this on the statements recently offered by Economy Minister Luis Caputo to Todo Noticias, claiming that "[the] middle class is the one that is making the greatest effort". The government's narrative is that it has increased the monetary resources dedicated to two social programs in particular, but it should be noted first that not even for its beneficiaries does it mean getting out of the adjustment-induced coma, and also that its scope is very limited—for example, the programs are mainly assigned to "parents who [are unemployed], [have] informal jobs, or [are] domestic service workers." But it is the journalist Jonathan Viale himself who reveals the "greatness" of the adjustment of the middle class. Viale's question to which Caputo answered went like this: "People adjusted cabs 60%, going to eat out 51%, sodas, going for a coffee, barbecue, Netflix... This is the middle class that is adjusting. When they are going to start living a little bit better?" So the middle class is adjusting, while the lower class if it adjusts more is drowning.

Argentine SMEs engaged in commerce decreased their sales by approximately 22% during the year's first quarter. The government points out that this dynamic, related to the loss of purchasing power of the population, would force traders to reduce the price of their products, while they would also have calculated the dollar at a too-high level. "Families have been strongly watching their expenses even when there are options of card or installment payments. There is uncertainty about how long the recession will last and that is why caution prevails at the time of purchase", say from the Argentine Confederation of Medium-Sized Companies. The National Institute of Statistics and Census estimated that industrial activity contracted by close to 1% in February, with no rebound expected in the manufacturing sector. The accumulated decrease since December is a little more than 10%. Taking February of last year as a reference, we are talking about a 10% drop in industrial activity levels. "Industry recorded in February a new and widespread contraction of activity, accelerating the pace of decline in the first two months of the year. All types of goods recorded setbacks, with the deepest ones resulting in capital goods and durable consumption," reads the official report.

A US base in Ushuaia; new presidential visit to the United States

Milei's alliance with Washington makes him an interesting player in the U.S. battle against China. Although the liberal has sought debatable narratives to present actions such as the potential installation of a U.S. base in the strategic southern province of Tierra del Fuego. "What happened the other day was the greatest act of sovereignty in the last 40 years because, by making a military base in Ushuaia (Tierra del Fuego), we endorse the claim on Antarctica. It is the first step to start thinking about the recovery of the Falklands", said the head of the Casa Rosada. It is not clear to what extent this could mean a step in that direction, nor to what extent the White House would validate Milei's vision. In an interview with a local web channel, the Argentine president also referred to the controversy over a Chinese base about which the United States—as usual in everything to do with China—has expressed reservations. The South American government is proposing to carry out an audit to verify that the activities carried out there correspond to the agreement governing the operation of the base. "If the Chinese say there is nothing, what is the problem?", asked the leader of La Libertad Avanza in a tone that does not hide his anti-Chinese bias.

In that sense, Milei confirmed that Argentina had bought 24 F16 aircraft from Denmark, an operation that Washington made viable as it had veto power over the transfer of this technology. In any case, even Kirchnerism tended to favor this offer over a Chinese one, as was the U.S. interest. In my opinion, behind this story is the support of Pennsylvania Avenue concerning Buenos Aires' negotiations with the IMF, before and after Milei. In another important foreign policy statement, the promise to move the embassy in Israel to West Jerusalem was reaffirmed, a step that puts back on the table the unconditional and complicit support for the bloody and disproportionate Zionist response to the electric Hamas attack last October 7. Finally, the Argentine head of state was traveling to the United States this Tuesday, where he is planned to receive an award in Miami and also to be received by Elon Musk at the TESLA headquarters in Texas—Starlink is available since last week in Argentina. Musk has made no secret of his appetite for Argentine lithium, another contentious point between China and the United States in which the Casa Rosada would lean towards the latter. In an interesting sign, this time Milei does not plan to spend even a few minutes with any Biden administration officials. We will keep an eye on this development.

And this is all for our report today. I have referenced the sources dynamically in the text, and remember you can learn how and where to follow the LATAM trail news by reading my work here. Have a nice day.