Why should I give them money so that they can move politically against me?” These are the words of an Argentine president when faced with resolving the flow of money which has become imperiously necessary after the 2001 crisis.
In reality, those are not the words of one head of state but of each of the presidents since then: Néstor Kirchner, Cristina Fernández de Kirchner, Mauricio Macri, Alberto Fernández and now Javier Milei. Political slush funds kill altruism and that is how we have reached this present, without a compass for an exit route.
As any analyst of national history will tell you: Argentina has never overcome the crisis of its model of industrialisation via import substitution. As from the 1970s, its job supply contracted and since the 2008-2009 crisis, job creation has dried up altogether. Now we are in a present in which almost half the workers are informally employed.
“We have a partially rich country but it has not had ruling classes with the capacity and audacity to create a new model,” argues Agustín Salvia, a sociologist, senior researcher with CONICET national research council and the director of the UCA Catholic University’s Observatorio de la Deuda Social Argentina poverty monitor.
Palliatives
Democracy has muddled through economic decay with palliatives: more public employment, subsidies and social plans. Makeshift stopgaps linked to the survival of the government in power at that time.
Although the methods of measuring poverty have been modified, there is a consensus in accepting that during the revolutionary 1970s barely reached six percent of the Argentine population were poor, a figure that tripled in the 1980s and continuing to climb, with brief periods of improvement, until reaching its historic peak of 55 percent in 2002, following the major political and economic crisis of the previous year.
According to the latest measurement from the INDEC statistics bureau from the second half of 2023, poverty affects 41.7 percent of the population, but a survey of Salvia’s observatory and the Caritas NGO divulged this month updates that indicator: 55.5 percent of Argentines now live in poverty and 17.5 percent are destitute.
In the country inherited by Milei last December, 35 percent of households were receiving some kind of public assistance. Following the almost immediate devaluation that came soon after the libertarian took office and the subsequent slump, more poor people slipped down the scale into destitution and more middle-class people fell below the poverty line.
The social segments excluded from the system have been accumulating over the past half-century to produce a chronically poor population already topping 25 percent. The only bridge linking them with the rest of society is public assistance.
Just words
Inheriting a nation with 32 percent below the poverty line from Cristina Fernández de Kirchner, Mauricio Macri took office proclaiming the slogan “zero poverty.” He handed over the government to Alberto Fernández with 35 percent poor.
Fernández then promised: “We’ll take care of ending hunger.” He left power with 41.7 percent poor, pleading the alibi of the Covid-19 pandemic and his disbelief at that figure: “Poverty is wrongly measured or Argentina would be blowing up.” Fernández believed those surveyed as poor were understating their earnings.
Then Milei came along with a chainsaw and no promises of welfare, quite the contrary. He said it on the campaign trail and he repeated it more recently at the University of Stanford: “The time will come when people will be dying of hunger and they will have to decide what to do in order somehow not to die. I don’t need any external intervention to resolve my consumption because in the end somebody is going to work it out,” he argued.
The fatherland of the Peronist drum, the power of burly trade union leaders and well-meaning progressives begin to look like sepia photos. Because Milei’s positive image remains highly positive (around 45 percent) despite the savage austerity which he vindicates with its epicentre in middle-class sectors and, above all, the pensioners.
Although the notoriety of the state squandering money falls on the “planeros” welfare benefit recipients, social contributions imply barely 2.5 percent of Gross Domestic Product while consultants at the Trespuntozero firm point out that the biggest amount of support for the government is to be found among those with only primary education, from which their socio-economic level might be inferred. The opinion polls further reveal that the higher the level of education, the less support for the government.
Political scientist Pablo Touzón anticipates the superficial deductions: “The vote of ignorance foisted Peronism on us for 50 years running.” He recounts that his barber told him that he voted for Milei because “you need to be mad to run this country,” further reflecting himself: “The question is not whether Milei is mad but that the people opted to blow everything up.” Salvia observes the same thing: “We are undergoing a systemic crisis in a context of great instability and difficulty in interpreting the phenomena. But it is an inevitable crisis because of the unsustainable way in which social and economic practices were being developed.”
He continues: “We had to come out of that paralysis but there is still no strategic project. What is happening now is that we are getting rid of the old. The novelty is the brutal and messy way in which this government wants to dismantle the old. In reality we are in a phase in which nothing new has emerged, not even extreme liberalism.”
Lumping together
At the start of his term, Milei decided to unify the Labour, Education, Childhood & Family and Culture portfolios into a new Human Capital Ministry, a super-ministry containing the areas which most challenge his central objective: zero deficit.
The President placed at its head his pal Sandra Pettovello, a journalism and domestic sciences graduate who is a complete beginner when it comes to public administration. Her dual role consists in restricting budgets to keep the presidential Excel spreadsheet on an even keel and proclaiming clear messages in the libertarian cultural war, like announcing the direct delivery of social plans without intermediaries or sitting on top of food supplies in order to evaluate without haste to whom and how to transfer them.
But earlier this month, everything has slipped out of control, precisely when the focus of the media agenda has been on the government denunciations of picket leaders and cooperatives suspected of extorting social plan beneficiaries, the existence of ghost soup kitchens and other irregularities.
Presidential Spokesman Manuel Adorni, who had denied the existence of withheld food as denounced by social leader Juan Grabois, then said that in reality they were rightly hoarded in case of catastrophe. Finally, the government tried to draw some lustre from the Army operation to distribute the 6,000 tons of food approaching expiry date in Villa Martelli (Buenos Aires Province) and Tafí Viejo (Tucumán Province) warehouses, in compliance with court orders.
Enjoying total presidential support, Super-Minister Pettovello stayed actively mum, not speaking in public but dumping and criminally denouncing her ousted Childhood, Adolescence & Family secretary Pablo de la Torre, holding him responsible for the crisis of unallocated food and also the irregular hiring of staff via funds from the Organisation of Ibero-American States (OEI, in its Spanish acronym).
The status of the “best minister in history,” as adjudicated by Milei, keeps her spotless even though the fallen official claims that she was on top of both things.
Circus – without bread
On a cold June afternoon, people queue at a community soup kitchen to take home a food tray, in many cases their only meal of the day. Luckily they pay more attention to their ration than the television at the back of the hall which is transmitting the extravagant stand-up of two defenders of food rights.
“Stop extorting people,” screams Juan Grabois at Human Capital Ministry Legal Undersecretary Leila Gianni, a chameleon who moved within a few months from a penguin tattoo to a lion-adorned T-shirt, previously having popped yellow balloons.
The federal judges of Comodoro Py are stunned by such mayhem. Over the top in this scenario because the hunger show grinds on without their intervention. Worth recording with a mobile telephone to reproduce their presumed bravado.
But the bocatto di cardinale morsel to die for comes from Grabois with his impromptu unipersonal bullying with his brand-new XL cross around his neck. He calls a government lawyer “chanchito” (“little piggie”), yelling “kuka ladrona” (“thief”) at Gianni – to hell with the stigmas of correct traditions.
Grabois, Emilio Pérsico (Movimiento Evita) Eduardo Belliboni (Polo Obrero) and Daniel Menéndez (Barrios de Pie) are the visible faces of an eroded period in which they disputed the control of the street with the trade unions and administered millions of pesos. A changing era has brought on their heads a flood of denunciations more or less justified – time will tell – imposing accountability on them while the new narrative is declaring them redundant.
Among her first measures, Pettovello eliminated the Potenciar Trabajo job training assistance plan, replacing it with two programmes and eradicating intermediation, as well as suppressing juicy budget allocations for the cooperatives. Last July the Coalición Cívica had already disseminated an investigative study (entitled “Don’t abuse the poor”), analysing the agreements with the social organisations which the former Social Development Ministry signed between 2020 and 2022 – it thus became known that 55 percent of those benefits went to the Movimiento Evita, whose leader Pérsico was at the same time the government’s social economy secretary distributing and supposedly monitoring these funds.
Even during the presidential campaign, these allocations gave rise to friendly crossfire. Picket leaders not aligned with the Alberto Fernández government, as well as opposition politicians, questioned this discretionary handling of welfare funds by the ministers Victoria Tolosa Paz (Social Development) and Eduardo ‘Wado’ de Pedro (Interior) at the service of their respective candidacies.
Provisional forever
The plans began under the Raúl Alfonsín government with the Cajas Pan food assistance for low-income families, which was received by 5.5 million people. Former president Carlos Menem transformed that aid into money: the Bono Solidario cheque which could be exchanged for food and clothing and was administered by the CGT labour umbrella union grouping.
But it was after the 2001 hecatomb that state assistance acquired a new order of magnitude. During his brief caretaker term, Eduardo Duhalde instituted the Plan Jefas y Jefes de Hogar Desocupados for the jobless, a benefit reaching 20 percent of the population.
In his essay ‘Historia de los planes sociales en la Argentina: el mito del eterno retorno asalariado’ (“The history of social plans in Argentina: The myth of the eternal wage-earning comeback”),” researcher Juan Pablo Hudson identifies four periods.
The first, extending from 2002 to 2008, was aimed at the millions of unemployed who lost their jobs between 1990 and 2001. The second, between 2009 and 2015 with the PRIST-Plan Argentina Trabaja programme, when the state began to require the jobless and the informally employed to organise themselves in cooperatives in order to finance those with plans. A third period was defined by the birth of CTEP, a trade union which no longer proposes converting informally employed workers into wage-earners but to boost their autonomy with the aim of having the workers of the popular economy receive social incomes from the state. In the fourth period, as from 2016, the main novelty is the Social Emergency law which among other benefits secured the Salario Social Complementario, the precursor of the programme Potenciar Trabajo created in 2020.
Corruption or governability?
An article published by researchers Romina Del Tredici and Lucas González (‘Comprando paz social: la distribución de planes sociales durante los gobiernos de Cristina Kirchner y Mauricio Macri’; “Buying social peace: the distribution of social plans during the governments of Cristina Kirchner and Mauricio Macri:) turns the focus towards those providing aid.
“While both governments used the discretionary distribution of social conflicts, CFK had comparatively more possibilities than Macri to use them politically. Indeed she used them as a system of rewards and punishments to balance power between mayors and social movements,” it reads.
In contrast, there was no affinity between Macri and any movement. The tension of his government “expressed itself in two different ways of relating to the social movements. One wing, represented by his Social Development minister Carolina Stanley sought negotiation and conciliation. The other wing under his Security minister Patricia Bullrich accentuated the importance of re-establishing order, even at the cost of repression.”
In the short term (today, Bullrich is doubling her bets) the dove wing won out: CFK left power with 250,000 plan beneficiaries while Macri left office with over 600,000. But unlike former presidents Alfonsín and Fernando de la Rúa, whose governments were cut short by social outbreaks, the PRO founder managed to become the first non-Peronist president since Marcelo T. de Alvear to complete his term in office.
Pandemic and thereafter
Juan Grabois was then saying that the only merchandise he had to sell was “social peace.” And he found a buyer.
The Alberto Fernández government increased the number of those on welfare plans exponentially to 1.2 million beneficiaries. Cooperatives doubled during his presidency too.
An investigation by journalists Mariel Fitzpatrick and Sandra Crucianelli found that in only four years, 12,407 new entities were registered, along with certain irregularities, such as some of the cooperatives repeating addresses and email contacts in their registration while two-thirds of them did not present balance sheets nor hold annual meetings.
If Cristina Fernández de Kirchner transferred much of the control over social assistance to the mayors, while Macri empowered the social movements in order to snatch funds from his Greater Buenos Aires adversaries, and Fernández boosted the social leaders who were part of his feeble power alliance, the way in which Milei will confront poverty remains a complete enigma.
What went before was fiscally unsustainable. Will what lies ahead be sustainable from a social standpoint?
* Director of Noticias magazine.
