Political Climate Report
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CONTACT INFORMATION POLITICAL & REGULATORY RISKS Ing.Antonio Arcos 1830 Juan Cruz Díaz [email protected] Ciudad Autónoma de Buenos Aires C1428AFB Megan Cook República Argentina [email protected] REPORT [email protected] Katrina Cohen Cosentino www.cefeidas.com [email protected] Agustina Jabornisky +54 (11) 5238 0991 (ARG) [email protected] +1 (646) 233 3204 (USA) Political Climate Report - ARGENTINA April 16, 2021 POLITICAL CLIMATE IN THIS ISSUE Argentina’s national government has begun implementing new Page 4 COVID-19 response highly politicized in restrictions on economic and social activities in the Buenos Aires electoral year metropolitan area as a second COVID-19 wave hits and cases reach Update on vaccination campaign record highs. The government is seeking to avoid a health system Page 6 collapse while minimizing the political and economic impacts of a Debate continues about postponing elections fresh lockdown. In an electoral year, the debate around the Update on foreign debt measures has become even more politicized, with the decision to negotiations halt in-person classes becoming a flashpoint between the Page 9 government and opposition, and coalitions struggling to position Congress opens with hybrid sessions and an economic-driven agenda themselves. Meanwhile, Argentina’s vaccination campaign is advancing steadily as debate continues about the possibility of Page 10 Update on Argentina’s foreign postponing elections. In Congress, economic relief measures are policy advancing as electoral considerations color the agenda. At the international level, Argentina continues to renegotiate debt obligations as tensions in Mercosur continue and high-level engagement with the U.S. increases. Government imposes fresh restrictions as second wave hits A year after first entering strict lockdown and following a period of greater opening, Argentina’s national government has begun implementing new restrictions on economic and social activities as a second wave hits. COVID-19 cases spiked in early April to over 20,000 per day, exceeding the peak hit in October and reaching new highs for several consecutive days. Around the same time, it was confirmed that more contagious variants of the virus, such as the Rio de Janeiro, United Kingdom and Manaus strains, were circulating among the community. As of April 16, Argentina has recorded a total of 2.6 million cases and just under 59,000 deaths. As a result of the increase in cases, on April 7, President Alberto Fernández announced new restrictions in the Buenos Aires metropolitan region and in other districts with high contagion rates, beginning on April 9 and extending during the next three weeks. The announcement, made in a pre-recorded message by the president who was in isolation following confirmation that he had COVID-19, followed several meetings with health authorities and provincial leaders to discuss the public health crisis. Restrictions included a night-time curfew from midnight through 6 AM; limiting public transport to essential workers, educators and students; closing bars and restaurants at 11 PM; banning private indoor social meetings and outdoor meetings over 20 people; and suspending group trips. These measures were only applied in high-contagious districts, and did not include Find more about our services Follow @CefeidasGroup halting most commercial activities nor the day had urged Argentines to remain suspending in-person classes. Governors home unless going to work or school and were encouraged to take measures in their confirmed that the UK and Manaus variants ARGENTINA – jurisdictions. had increased circulation (although are not yet dominant). Stricter measures were PCR However, despite the measures, case delayed due to disagreements between numbers failed to decrease, building the administrations of different pressure for additional restrictions. On jurisdictions and varying viewpoints April 13, cases hit a new all-time high of within the government. Moreover, 27,001 as deaths creeped upward towards tensions have arisen between the 400. On April 14, 25,000 cases and 368 national government and provincial deaths were confirmed, and 62.7 percent of governors due to the latter failing to ICU beds are occupied nationwide. In the take measures to curb the spread of Buenos Aires metropolitan area, ICU bed COVID-19, which the national occupancy is over 71.4 percent, with many government sees as a refusal to areas in the City of Buenos Aires at full assume any political cost. However, the capacity, causing increasing worries. In this critical situation pushed the national context, late on April 13, President Alberto administration to take action. The national Fernández led a virtual meeting with part of government had been reticent to the cabinet to analyze the implementation impose a strict lockdown due to the of “targeted and strict measures” in the economic impact and political cost this Buenos Aires metropolitan area, where over could imply, especially as it faced 50 percent of cases are concentrated. significant criticism last year for repeated extensions of the lockdown. Consequently, on April 14, just a week However, in recent private polls, there has after having announced the previous been a gradual increase in approval for measures, President Alberto implementing stricter measures, and Fernández announced increased pressure has built as cases and ICU restrictions focused on the Buenos occupancy continue to rise. The Aires metropolitan area (AMBA) and government can hardly afford the political aimed at limiting circulation and impact of a health system collapse. promoting social distancing. The new measures extend the daily curfew to 8 PM Previously, the government had been to 6 AM. All social, cultural, religious events hinting for weeks that new restrictions in enclosed space are banned, and could be on the horizon, especially as restaurants must operate delivery only cases rose in neighboring countries after 7 PM. Schools will close and return to such Brazil, Uruguay, Paraguay and online class for the next two weeks. Chile and as second waves were Industrial activity and construction will not reported across Europe and the United be affected. Provincial governments may States. In mid-March, as the one-year choose to implement the measures if the anniversary of the strict lockdown governors decide to do so, but the implemented in March 2020 was restrictions will only be imposed in the approaching, there were already signs that AMBA by the national government. The a second wave was on the horizon, and the government has said security forces will government began setting the stage for ensure compliance. new measures. On March 18, President Alberto Fernández took to the airwaves for Analysis a nationwide broadcast (known locally as a The announcement came after urgent meetings held between the president and part of the cabinet, and calls from National Health Minister Carla Vizzotti, who earlier in 2 cadena nacional), warning about a possible Government looks to fight inflation second wave and difficulties securing with price controls, Supply Law vaccines. The lack of any concrete ARGENTINA Inflation in March hit 4.8 percent, the highest – announcement made clear that the monthly inflation figure since September 2019. purpose was to begin paving the way The number brought inflation to an accumulated PCR for future measures, which were 13 percent so far this year, and 42.6 percent over discussed in various meetings between the last 12 months, according to the national statistics agency. Prices for food and beverages national and provincial authorities increased 4.6 percent from February. Although the without any changes. Later that month, government has continued to express that it Health Minister Carla Vizzotti and Cabinet believes that inflation will slow as the year moves Chief Santiago Cafiero gave a short press on, the latest figures call into question its 29 conference ahead of the Easter holiday long percent inflation goal for 2021. weekend, calling for personal responsibility As such, in an effort to lower inflation expectations, and giving national public sector workers the government has been intervening in the home office for the week. In the absence of economy through different methods: a renewal of stricter national measures, in the following the Precios Cuidados and Precio Maximos price days, several provinces begin implementing control programs, freezing public services tariffs, and by threatening to apply the Supply Law (which curfews and circulation restrictions at the authorizes the government to force a business to local level. sell inventory) to companies allegedly hoarding construction materials. The government is also looking to monitor the process of beef exports, and However, the government’s initial implementing programs to ensure meat is response focused on reinforcing available domestically at accessible prices. controls at the border and appeals to Additionally, in mid-March, the government personal responsibility. For example, on announced it would begin requiring large companies in certain sectors to provide monthly March 26, the government extended and information on their prices, sales and inventory. strengthened restrictions on international The government announced the measure in the travel. Flights from Brazil, Chile and Mexico context of rising inflation and amid concerns that were suspended (additional to the existing a second wave of COVID-19 cases could contribute suspension on flights from the