National Strike Paralyzes Argentina Amid Economic Woes

Date: Thursday, May 30, 2019
Source: The Wall Street Journal

Argentines are grappling with a sharp recession and high inflation months before a presidential election

Argentine unions held a national strike Wednesday, forcing banks to shut their doors, airlines to ground flights and a soccer final to be postponed amid growing anger over President Mauricio Macri’s economic management.

Argentina’s biggest trade union CGT launched the one-day strike as Mr. Macri faces a backlash months before a presidential election. Many Argentines are upset over a sharp recession and rising prices for food and utilities. In April, inflation hit 56%, among the highest in the world, while the economy shrank 6.8% in March.

“Every day people are worse off…It’s a disaster what’s happening,” said union leader Hugo Moyano. “If [Macri] doesn’t understand that, then it’s evident he doesn’t have the capacity to govern our country.”

In Buenos Aires, parents kept their children home from school while the metro system shut down. Airports came to a standstill as the country’s flagship airline, Aerolineas Argentinas, and other carriers like Latam Airlines canceled flights. A soccer-cup final between Argentina’s River Plate and Brazil’s Atlético Paranaense was rescheduled. Outside of the capital, ports that export grains weren’t operating.

The finance ministry estimated that the strike would cost the economy about $900 million.

Security Minister Patricia Bullrich said the strike—the fifth nationwide protest since Mr. Macri took office in late 2015—was politically motivated by powerful union leaders who want to hurt the government ahead of October’s election.

“We’re fed up with the strikes,” Ms. Bullrich told La Red radio station.

Mr. Macri, a market-friendly former businessman, has blamed Argentina’s economic troubles on his leftist predecessor, Cristina Kirchner. She left him with a high deficit and double-digit inflation after years of overspending.

He was initially confident that he could get spending under control and tame inflation by unraveling Mrs. Kirchner’s interventionist policies, attracting private investors and boosting exports. He aimed to make the adjustments slowly to prevent a social backlash from an economic shock to Latin America’s third biggest economy.

But Mr. Macri was unable to curb inflation as Argentina faced a currency crisis last year that drove prices higher and forced the government to seek a $57 billion bailout from the International Monetary Fund. A recent poll by D’Alessio IROL-Berensztein showed that Mr. Macri had a negative image among 57% of Argentines, compared with a positive image among 38%. Other polls published in local media show he is likely to lose the election.

The government says the economy is expected to recover in the coming months on a record agricultural harvest. Torino Capital, a New York brokerage, said the economy could also be helped by higher government spending before the election, which will help Mr. Macri at the polls.

“However, the pre-election fiscal excesses will need to be counterbalanced by postelection austerity,” Torino said Tuesday in a report. It expects the economy to contract 0.3% this year and to grow slightly in 2020.

The economic crisis has opened the door for the return of Mrs. Kirchner even as she went on trial this month on corruption charges during her administration. She denies wrongdoing.

Mrs. Kirchner recently surprised Argentines by saying she will run in October’s election as vice president with former cabinet chief Alberto Fernández as her party’s presidential candidate.

But many Argentines still think she is the one calling the shots. And that’s fine for supporters like Carlos Arias, a 34-year-old employee at the Buenos Aires metro who was protesting on Wednesday over his struggles to pay higher water and gas bills.

“You can’t live anymore with the Macri government,” said Mr. Arias. “I’m waiting for the election so Cristina returns and gives dignity back to the people.”

 

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