Argentina: Economic crisis, COVID-19 and fears of corruption a volatile combination

Tired of corruption, heading deeper into economic crisis and with no end in sight to the coronavirus lockdowns, Argentina's middle class is ready to blow

BUENOS AIRES. Every night, Argentines living under relatively strict shelter-at-home conditions have two [contradictory] appointments. 

As they creep towards the first month of law-enforced lockdown, politics are a big part of daily routines in Argentina. At 9:00 pm every night, much like the rest of the world, they go out to their balconies, lawns, patios or windows to applaud health workers.

At 9:30, a few minutes after celebrating underpaid, underequipped and overworked doctors and nurses, they bang pots to protest the government. These cacerolazos (a cacerola is a pot) could be a harbinger of much more widespread political action, the type of action that could even bring down the new government.

Social media has boiled over with activity as many turn to their screens to criticize or directly attack the fourth-month old administration of President Alberto Fernandez and, especially, the profligacy that many see as its hallmark. 

Patricia Bullrich, the head of the opposition Propuesta Republicana party (PRO), turned to social media to channel the outrage, she said: “Noise was heard. Lawmakers [belonging to her party] ask the government that officials, lawmakers and judges donate part of their salaries to help those who can’t work. Solidarity of those who earn most from the government is central to mitigate the crisis.”

It turns out that in Argentina, such solidarity could go a long way towards helping those most in need. 

The wages and earnings of public servants are factors of magnitude higher than those of average workers. 

The COVID-19 crisis is not only testing the public’s resolve to fight the virus but also stretching its willingness to put up with tax increases. 

The speaker of the lower chamber of Congress has already floated the idea of cutting salaries for his branch of government. Sergio Massa, a member of the governing political coalition, proposed a 40 percent cut for those sitting in that house.

Lawmakers in Argentina are expensive. 

Roberto Cachanosky, an independent economist, went viral when he presented figures during a popular talk show that showed that an Argentine lawmaker costs 10 times more than lawmakers in Spain. He said that averaging congressional expenses a Spanish lawmaker costs €17,500 a month while one in Argentina costs €171,000. A massive difference.

This simple calculation was only one of the reasons why Argentines are taken to their balconies in anger every night.

Using the argument of the COVID-19 health emergency, government ministers have been given special powers to make direct purchases while the lockdown has left those living hand to mouth – a sizable group in Argentina – in a vulnerable situation. 

A move to boost food handouts in shanty towns received widespread support. The number of people receiving meals through various social programs has jumped from 8 million to 11 million, according to press reports

Still, waste is a concern. And if Argentineans know anything, it is that waste is often synonymous with corruption.

The Ministry of Social Development, for example, has been buying bottles of cooking oil for US$2.42, when the same product can be found in supermarkets for US$1.50. The total amount spent on oil was US$6 million. Purchases of this particular product were stopped and second-tier officials were removed from their posts but Minister Daniel Arroyo received public backing from the president

“There wasn’t corruption, what happened is that there are suppliers selling products at certain prices, and we want them to lower them, and amid this emergency we have to cover a demand that we have never seen in Argentina,” said Arroyo.

Even as this particular overspending was being rectified, however, Fernández defended the salaries of officials and lawmakers.

“We shouldn’t be hypocrites! None of them have exorbitant salaries,” he told journalist Horacio Verbitsky in an interview. Verbitsky is a well-known government supporter.

Meanwhile, the administration floated another idea: more taxes.

For now, cacerolazos – or pot banning- is limited to middle class neighborhoods but this could be sign of more widespread protests. 

The last time the country’s ever-shrinking middle class protested en masse was in 2001 and, back then, an entire administration was forced out. With an economy already in default and under heavy stress by chronically high inflation the country has shrinking means to keep everyone happy. COVID-19 shutdowns and economic pain could prove to be the match that light up this particular powder keg.