Argentina is grappling with a dramatic surge in poverty, as newly released data reveals that over 52% of the population now lives below the poverty line. This sharp rise comes as a direct consequence of President Javier Milei's aggressive austerity measures, which have been aimed at stabilizing the country's economy after years of financial mismanagement. The poverty rate, which stood at 41.7% at the end of last year, has now surged to 52.9% in the first half of 2024, according to Argentina's national statistics agency, Indec.
Milei, who assumed office in December, inherited an economy mired in debt, inflation, and fiscal deficits. His administration quickly implemented a series of drastic economic reforms, including slashing subsidies for essential services such as transportation, fuel, and energy, and cutting thousands of civil service jobs. While these austerity measures have been welcomed by international markets for curbing government overspending, they have pushed millions of Argentines into deeper poverty.
The increase in poverty has not only been a stark indicator of the economic toll but has also highlighted the human cost of these reforms. Irma Casal, a 53-year-old Buenos Aires resident, represents the struggle faced by many. Despite working multiple jobs as a garbage recycler, cardboard collector, and bricklayer, she still finds it difficult to make ends meet. "We work twice as hard for less and we have to keep going," she said, echoing the frustration felt by many working-class Argentines.
President Milei's policies, often referred to as "shock therapy," have aimed to reverse years of economic decline. Argentina, which has one of the highest inflation rates in the world-230% as of August-has been plagued by chronic economic crises for decades. Under Milei, the government devalued the peso by 50% and slashed the number of government ministries in half as part of its strategy to restore fiscal balance. However, these moves have contributed to a sharp contraction in consumer spending and have exacerbated the financial strain on ordinary citizens.
Milei's government has defended its approach, pointing to the monthly fiscal surpluses achieved since February as evidence of success in stabilizing Argentina's finances. In a press conference, government spokesperson Manuel Adorni blamed previous Peronist administrations for the current economic plight. "The government inherited a disastrous situation, the worst inheritance that a government has received in a democracy, perhaps one of the worst that a government has received in history," Adorni said. He emphasized that Milei's reforms were necessary to avoid further economic catastrophe.
Despite these explanations, the rise in poverty has led to widespread public discontent. Argentina's labor unions have organized protests against the government's policies, decrying the impact on workers' rights and living conditions. The cuts to subsidies and government services have disproportionately affected the country's most vulnerable citizens, further deepening the economic divide.
Criticism has also come from political opponents, particularly from the Peronist bloc, which has historically advocated for more state intervention in the economy. Victoria Tolosa Paz, a prominent Peronist lawmaker, accused the government of implementing "relentless austerity" policies that have "battered working families." Tolosa Paz and others argue that Milei's reforms have been too aggressive and have failed to provide a safety net for those most affected by the economic downturn.
Milei, however, remains defiant in the face of opposition. His administration has pointed to the need for long-term structural changes to secure Argentina's economic future. While acknowledging the hardship caused by his policies, Milei has reiterated his commitment to seeing through the reforms. "We are doing everything, everything so that this situation changes," Adorni said, underscoring the government's resolve to stabilize the economy and reduce inflation.
Despite the economic challenges, Milei retains a significant level of public support. Polling data from Poliarquía shows that while his approval rating has dipped slightly, with 40% of Argentines expressing support for him between August and September, his government still holds a relatively strong approval rating of 53%. This suggests that while many Argentines are feeling the immediate pain of austerity, there remains hope that Milei's reforms will eventually bear fruit.
However, Milei's ability to push through his agenda is hampered by political opposition. His coalition, La Libertad Avanza, does not command a majority in the Argentine Congress, making it difficult to pass key legislation. The president's administration has struggled to build consensus across party lines, further complicating efforts to implement long-term reforms.
