The director-general of the International Labor Organization (ILO) says that Argentine authorities are using “exaggerated adjustment policies” to fix the country’s economy that, like in Europe, are not likely to work.
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"The exaggerated adjustment policies applied in the European Union during the last international crisis were an obstacle to its economic recovery and (impeded) countries’ abilities to pay their debts," warned director, Guy Ryder during the opening of the 19th American Regional Meeting of the ILO being held in Panama City until Thursday.
Referring to Argentina’s June-released US$50 billion International Monetary Fund (IMF) loan that President Mauricio Macri just renegotiated for another US$7 billion, Ryder warned that "facing debt maturities in a country that does not grow and does not collect is difficult."
The ILO leader added: "The measures that are applied in Argentina under the IMF framework have to be accompanied by dialogue in order to be able to get ahead," alluding to the fact that Argentina’s economy continues to fall behind.
Civil protests are a constant these days as the purchasing power of wages fell by 14.7 percent since President Mauricio Macri took office in December 2015 and some 33,000 workers have been laid off since that time.
Ryder added, "Labor relations cannot be turned into business relationships. Work is not a commodity.”
The Statistical Institute of Workers (EIT) predicts inflation in Argentina will hit 45 percent by the end of this year, making it the country’s highest in three decades. According to local media, food prices in September rose by 7.5 percent and the unemployment rate reached its highest level in twelve years increasing from 8.7 percent in 2017 to 9.1 so far this year. The country’s gross domestic product is predicted to fall by up to 4 percent by the end of 2018 making it difficult for the government to pay back its debt.
"I was in Argentina and I spoke with the government, the unions, and the employers, and all recognize that the way out is via dialogue,” Ryder told reporters on Oct. 2. “Although difficult, the country has institutional spaces to create this dialogue and the experience of a painful past,” said the labor expert referring to the country’s 2000-2002 major recession.
When asked by journalists about the impact of austerity on the population, Ryder replied: “I hope that that dialogue can be constructed."
Argentine Workers' Central Union (CTA) Secretary-General Hugo Yasky who spoke alongside Ryder said, "The numbers clearly show that wage earners are the ones who are most brutally subjected to the logic of adjustment."
The Macri administration once again raised its interest rates from 60 to 74 percent on its short-term bonds, making it the world's highest by far. Each day the government has to pay out over US$26 million on the billions in bonds issued by the Macri government.