Argentina Keeps Losing Jobs

[Gringoboy]

I sometimes wonder what planet you live on Matias.
Most of us don't give a monkey's about 1981, 1989 or any other year you just referred to.
That's then, this is now.
And if you think the dead cow is going to rescue us all...gimme a break will you!

 

[camberiu]

we still have 30 billion as reserves, rare after ten years, unemployment less than 8%, still launching social plans, raising pensions, subsidios, etc, we still do not have the classic crisis situation, and if it comes, this time we have some new assets like, for example, Vaca muerta, an endless source of dollars, or, another example, the growing Chinas demand of the classic Argentinas exports.

Yes, you still have 30 billion, which is a disgrace for a G20 nation Matias! Argentina did one of the largest defaults in human history. It started back again with a clean slate after the default, no debt, and 12 years later what do you have to show for it? That you still have 30 billion left? And with only 30 billion in the bank you celebrate raising subsidios?
And you are counting on Vaca Muerta to get you out of the hole? Nothing exemplifies the craziness that is Argentina than betting the future of your highly dysfunctional country on a dead cow.

 

[Dublin2BuenosAires]

Vaca muerta won't be productive for min 10 yrs. Endless dollars? OK. Show us the contract? Endless dollars for Chevron and the next Lazaro Baez maybe! Energy spend is Argentina's largest public expenditure. Not sure how that will go down anytime in the next 10 yrs. Telling people to use 20% less gas and taking subsidies away from pensioners ain't gonna do it.

Next biggest spend? Transport, just as well we have an unqualified former long term student / campora acolytye in charge of spending billions of pesos every year.

What can go wrong?

Unemployment at 8% ? I believe that as much as any other INDEC stat. It excludes every on a "plan" and receiving state assistance to find a job. Seriously, if that's your comfort blanket you're in for a cold winter my friend.

 

[Dublin2BuenosAires]

That 30bn in no small part generated by taking a private pension fund (ANSES), saying "thats ours now, we need to make adverts for ourselves and stuff".

 

[sleazemerchant]

The situation is a lot better than in 1981 with the financial crisis, than in 1989 when the hyperinflation, and than in 2001 with 25% unemployment, corralito, etc, etc,
The saga of this every-ten-years-crisis began, of course, with the dictatorship, and is a combination of recession, of debt problems, with no dollars anywhere...

Yes we have debt problems today, but I think it is well managed the situation with the vultures, we still have 30 billion as reserves, rare after ten years, unemployment less than 8%, still launching social plans, raising pensions, subsidios, etc, we still do not have the classic crisis situation, and if it comes, this time we have some new assets like, for example, Vaca muerta, an endless source of dollars, or, another example, the growing Chinas demand of the classic Argentinas exports.

Its just another world.

Keep in mind the current claimed $30 billion USD reserves held by the BCRA is down from around $52 billion USD claimed less than five years ago; why the decline? apart from massive capital flight triggered by asinine marxist policies, the Kirchners decided to change the charter of the BCRA eliminating its independence and allowing the government to raid its coffers to service the governments external USD denominated debt. Previously, funds for debt service were obtained by running substantial matching current account and fiscal surpluses.
As for Vaca Muerta reversing the economic decline, realistically that shale play is 5-10 years and hundreds of billions of USD of investment away from being anything approaching the gusher the Argentines are dreaming it will be.

 

[Dublin2BuenosAires]

The 8% unemployment fiure excludes anyone on a govt "plan" or program to assist them in finding jobs. Also excludes what are loosely qualified as students (which it should, but the definition is widely abused) Hence the ni-ni program last year, give them a few quid and get them off the unemployed stats.

I believe the 8% stat to be as fanciful as the inflation stats. Ps. 40% infaltion, sounds like good shape to me.

 

[ElQueso]

I don't know, I'd believe the 8% (and I believe almost nothing that comes out of INDEC). Jobs are available - but NOT good jobs. The majority of people don't have good jobs and are being affected by inflation horribly - but they have jobs.

As long as Argentina keeps looking at things like the commodities exports and dead cows to maintain the status quo, it may keep the government's reserves declining slowly instead of rapidly, but it sure as hell isn't going to help the majority of people find good jobs, it's not going to produce the kind of climate that will encourage entrepreneurs to create those jobs, and it won't encourage foreign capital to come in and invest to produce an even bigger flow of jobs.

 

[citygirl]

As long as Argentina keeps looking at things like the commodities exports and dead cows to maintain the status quo, it may keep the government's reserves declining slowly instead of rapidly, but it sure as hell isn't going to help the majority of people find good jobs, it's not going to produce the kind of climate that will encourage entrepreneurs to create those jobs, and it won't encourage foreign capital to come in and invest to produce an even bigger flow of jobs.

Foreign capital by and large is going to run screaming in the other direction. Typically if you're a multi-national and looking to establish subsidiaries, you're going to look at a place with either low costs and ease of entry into the market or low regulation & ease of doing business (rarely do you find both) or a place that might not meet either of those criteria but is a big enough market that you put up with all the BS b/c you have no other choice (see China). Argentina meets none of those qualifications. Add in currency instability, onerous regs and laws and well, there isn't a lot of reason to open a biz here and there are a lot of good reasons to take existing business elsewhere (as in RRD's case).

Starting up your own small biz can be done here of course but the issue comes when you start hiring outside employees or when you start to want to grow.

 

[Dublin2BuenosAires]

I don't know, I'd believe the 8% (and I believe almost nothing that comes out of INDEC). Jobs are available - but NOT good jobs. The majority of people don't have good jobs and are being affected by inflation horribly - but they have jobs.

As long as Argentina keeps looking at things like the commodities exports and dead cows to maintain the status quo, it may keep the government's reserves declining slowly instead of rapidly, but it sure as hell isn't going to help the majority of people find good jobs, it's not going to produce the kind of climate that will encourage entrepreneurs to create those jobs, and it won't encourage foreign capital to come in and invest to produce an even bigger flow of jobs.

The methodology specifically excludes anyone on a government program to look for a job, i.e. a social plan. 8% might be the correct number as per the stated methodology but it does not represent the number of people who need a job and it does include a significant amount of government expenditure.

 

[Crema Americana]

Maybe the inflation figures take minimum wage into effect... if the minimum wage for say, housekeeping, goes up 20-25% a year, and inflation is at say 30%.... well that's only 5% inflation! (Trying to use Argentine political logic here.)


There's jobs... low paying jobs and government/union jobs... but part of the reason unemployment isn't higher is because there is actually a lot of job protection. I believe instead of mass layoffs like what happens in the US, what might be happening here is that companies continue to struggle with the personnel they have, and when it busts, it busts and everyone finds themselves in the street.