Argentina’s lurch to the left
under new President Alberto Fernández is proving a bitter pill to swallow for
much of the middle class, with
the wallet-draining Christmas
season in full swing.
The Frente de Todos was
swept to power in October’s
elections on the wave of antiausterity sentiment in a country gripped by an 18-month
economic crisis following a
currency crash. While his victory brought hope, that has
quickly turned to dismay for
many taken aback by a series
of taxes imposed on the US
dollar, the currency Argentines favour for their savings.
On Tuesday, Economy Minister Martín Guzmán announced
a 30 percent levy on foreign currency purchases to protect
“highly vulnerable” sectors.
Social media is abuzz with
indignation over the “authoritarian” measure, which is already scheduled for debate in
the lower house Chamber of
outside Congress on Wednesday shouting “Yes, we can” –
former president Mauricio
Macri’s campaign slogan, popularised by Barack Obama
ahead of the 2008 US election.
On Twitter, critics denounced
left-wing policies they fear will
drag Argentina down the road
Hugo Chávez took Venezuela,
which has suffered one of the
worst economic collapses outside of war in modern history.
“Alberto’s going for the Chavista model: concentration of
power, political absolutism,
high taxes, asphyxiating the
middle classes and the productive sector,” claimed Gregorio
Hernández Maqueda, a Civic
Coalition political leader from
Córdoba, in a tweet this week.
One of the most controversial
moves is the return of what Argentines call the “tourist dollar.” A 30 percent tax is being
applied on purchases made
abroad by credit card as well as
withdrawals made in foreign
countries. Services such as Netflix and Spotify are also affected by the tax.
“I booked a foreign trip many months ago... This 30 percent
tax makes it difficult to stick to
my budget, as well as not being
able to use cards during the
trip,” said kindergarten teacher
Nathalie Goldstein, 24, who
saved up for a year to travel to
It is not the first time an Argentine government has imposed such measures. Vice-President Cristina Fernández de
Kirchner did something similar
during her second presidential
term from 2011-15, before Macri cancelled the policy.
Economic analyst and newspaper columnist Manuel Adorni accused the government of
lying in a bid to convince the
least affluent that the tourist
dollar “will only affect the richest and that it will benefit
them, without realising that
they will get poorer.”
With the peso trading at 63 to
the dollar, the tourist rate will
cost Argentines around 80 pesos. A year and a half ago, the
exchange rate was 18 to the dollar.
Aldo Elías, president of the
Asociación de Hoteles de la República Argentina (AHT), a
chamber of tourism, blasted a
“very bad measure.”
He said it “puts at risk the
work sources of almost 5,000
tourism businesses” and predicted that airlines would leave
Argentina if the number of tourists heading abroad dries up.
However, Ernesto Oldenburg,
a restaurant owner in Lobos, a
city in Buenos Aires Province,
around 70 miles (115 kilometres) from the capital, says the
measure is an “incentive” for
He expected more holidaymakers from Buenos Aires to
head to Lobos’ popular lagoon,
‘NO-ONE TRUSTS PESO’
Most Argentines keep their
savings in dollars and much of
that is held outside the country,
to protect from a peso that has
proved highly unstable. But the
30-percent tax will also be
applied to savings in a bid to
prevent a currency flight.
According to the Central
Bank Argentines are holding
US$43.7 billion outside the
country, but that’s US$19 billion less than last year.
“No-one trusts the peso,” one
51-year-old housewife told AFP.
Argentina’s currency has
lost almost 40 percent of its value during the last year. The
economy is expected to shrink
by around 3.1 percent in 2019,
as inflation hovers around 55
percent, poverty near 40 percent and unemployment stands
at 9.7 percent.
Fernández’s government has
also said it will maintain the
US$200-monthly limit on dollar purchases initiated by Macri.
It remains to be seen how
Argentines will react. After the
government increased taxes on
agricultural exports, the Confederation of Rural Argentines
announced plans to protest.