Argentine candidates talk about economy
Argentina’s top presidential candidates on Wednesday presented different visions of how to improve the South American nation’s economy at a time of soaring inflation and a sharp devaluation of the peso on the black market.
Ruling party candidate Daniel Scioli, the designated successor to President Cristina Fernandez, said the natural-resource-rich country should increase production of its top commodities and create development plans for each.
Scioli, a former vice president and currently the governor of Buenos Aires province, also argued that the nation of 41 million was on sure footing. Scioli frequently walks a fine line, calling for change while being careful not to alienate Fernandez supporters who are key to his chances of winning Oct. 25.
“Let’s build on top of what has already been built,” Scioli said.
Mauricio Macri, the outgoing mayor of Buenos Aires and leading opposition candidate, is the clear favorite of the business community, in part because of promises to lift restrictions on buying U.S. dollars and lower export taxes.
On Wednesday, Macri struck a more populist note, talking about the need to confront extreme poverty and invest in education so that children in rural areas have the same opportunities as those in Buenos Aires.
“We should not resign ourselves to being doomed to choose between spendthrift populism and a neoliberal government that does belt-tightening,” he said.
The candidates were notably light on specifics, frustrating some in the audience.
Jorge Giordano, president of a consulting firm focused on telecommunications, said he didn’t hear solutions for the two biggest problems that businesses face: inflation and an inability to plan because of economic instability.
“These were just campaign speeches without any specifics,” said Giordano.
Argentina’s economy, the second largest in South America, is characterized by contradictions and distortions. The official exchange rate is fixed at around 9 pesos to the U.S. dollar, but the black market rate reached 16 pesos this week, its highest level the last year.
Administration officials often note that black market transactions only account for a small fraction of the overall economy. While that’s true, the black market rate is followed closely by Argentines in many walks of life and many economists consider it an important indicator of the peso’s actual value against other currencies.
While world oil prices have plunged to around US$40 a barrel, in Argentina they are fixed at US$77, a policy aimed at stimulating the local industry. Meanwhile, high energy subsidies keep gas, electricity and public transportation costs relatively low.
While the government says inflation has been running at about 15 percent, some private economists say it’s closer to 35 percent.
On Wednesday, opposition candidate Sergio Massa called for an overhaul of how statistics are gathered so that they are transparent and credible. Lack of faith in government numbers, from unemployment to inflation, has led to a cottage industry of private statisticians who advise businesses.