Unemployment and the drop in economic activity will be much worse in Argentina than in other countries in the region

RADIO JAI – A contraction of 10% of GDP is expected for this year in the country and according to data revealed by the National Institute of Statistics and Censuses of the Argentine Republic (INDEC) unemployment before quarantine had already risen to 10, 4% in the first quarter of 2020.

In dialogue with Radio Jai, the economist and executive director of the think-thank Libertad y Progreso, Aldo Abram, predicted a dark outlook for Argentina and criticized the strategy of President Alberto Fernández to continue prolonging the mandatory quarantine that has been in force since March 20 in all the Argentine territory. ¨I understand that politicians and infectious diseases only count those killed by the coronavirus and not those killed by quarantine. But in the world they are beginning to do it. The logic is as follows: without production, you don’t generate income to feed yourself. So what? Are governments going to let thousands of people starve to death? ¨ said Abram.

The economist maintains that the State’s capacity to treat patients depends on the resources generated by the productive private sector and added: “if companies do not produce, the state coffers are emptied because they have no where to obtain the resources”.

Then he added: ¨The mistake of the Argentine government’s strategy was not to be aware of the real costs that being unemployed for more than three months implies for the economy. If President Fernández had been advised by specialists on the subject, he could have better determined those costs, “he said.

Abram explained with an analogy why he expects Argentina to suffer a worse crisis than other countries in the region: ¨Suppose that luckily, responsibility or hard work, you can be in a position not to work 3 months and still not decrease your standard of living . Now imagine the opposite situation: a person who mismanaged his finances, or had little luck or whatever. That person who lives up to date if the State prohibits him from working, how does that man or woman do to avoid starvation? Now think about the same cases but in countries¨.

The Argentine Republic would be that second family, argued the economist, Abram argued: ¨The politicians squandered the taxpayer’s silver and the Central Bank did not maintain the value of the national currency. The national public administration is financed by eight million people and directly or indirectly supports another 20 million. Therefore, Argentina does not have fiscal or financial conditions to face a prolonged quarantine, “he said.

The judiciary of the Argentine nation issued an agreement stating that in case of not being able to resume activities, there may be problems for the organization of the legislative elections that are held next year throughout the Argentine territory. Abram expressed concern about the document and described as aberrant the possibility of having to suspend the elections: “if the markets or shoe shops work, how can justice not work in a republican democracy? Justice is essential for the proper functioning of this system¨.