Latin America Advisor 2024-03-11 – Inter-American Dialogue

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

March 11, 2024

Will Argentina’s Poverty Fall Under Milei’s Government?

President Javier Milei’s “shock therapy” economic policies have contributed to a rise in poverty in Argentina, according to a recent study. // File Photo: @JMilei via X.

Q

Argentina’s poverty level rose in January to its highest level in 20 years, according to a study published by the Catholic University of Argentina. The report shows that 57.4 percent of the country’s population—or roughly 27 million people—are living in poverty. The report blamed rising poverty in part on President Javier Milei’s decision to devalue the peso, though Milei blames prior administrations. What effect have Milei’s policies had on poverty in Argentina? What chance do his policies have at reducing poverty in the long run? How long is the Argentine public likely to give Milei a “honeymoon” for his policies before holding him responsible for increasing economic hardship?

A

Nicolás Saldías, senior analyst for Latin America and the Caribbean at the Economist Intelligence Unit: “Milei was elected in a landslide to reverse populist economic policies that most Argentines realized were unsustainable. He was clear that he would pursue free market reforms to end distortionary state intervention in the economy, especially the enormous fiscal deficit, price controls and an overvalued exchange rate. The surge in inflation was directly triggered by the devaluation of the peso in December. However, it was an inevitable outcome, as the previous government allowed net foreign reserves to plummet to a negative $11 billion. Even though the rise in poverty was inevitable, Milei’s austerity made it worse. The government’s front-loaded fiscal consolidation relied on…”

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Diego Arria
Director,
Columbus Group

Merike Blofield
Professor of Political Science,
University of Hamburg

Devry Boughner Vorwerk
CEO,
DevryBV Sustainable Strategies

Joyce Chang
Global Head of Research,
J.P. Morgan

Marlene Fernández
Corporate Vice President for Gov’t Relations,
Arcos Dorados (McDonald’s)

Peter Hakim
President Emeritus,
Inter-American Dialogue

Donna Hrinak
Director,
Adtalem Global Education

Jon E. Huenemann
Council Member,
GLG Inc.

James R. Jones
Chairman,
Monarch Global Strategies

Craig Kelly
Senior Director,
Int’l Gov’t Relations,
Exxon Mobil

Barbara Kotschwar
Professor of Political Economy,
Georgetown University

John Maisto
Director,
US Education Finance Group

Nicolas Mariscal
Chairman,
Grupo Marhnos

Thomas F. McLarty III
Chairman,
McLarty Associates

Beatrice Rangel
Director,
AMLA Consulting

Ernesto Revilla
Head of Latin American Economics, Citi

Gustavo Roosen
President,
IESA

Andrés Rozental
President, Rozental &
Asociados

Shelly Shetty
Managing Director,
Sovereigns, Fitch

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