Charities Operating in Argentina
Argentina is one of the southernmost countries in South America. Though it boasts a 98% literacy rate, a solid public healthcare system and one of the most robust economies in all of South America, it suffers from a high national poverty rate and concerns in the healthcare and education sectors. Both the government and non-governmental organizations (NGOs) must work to improve the living conditions for Argentinian citizens. Here is an overview of the country’s poverty situation and a few impressive charities operating in Argentina.

Argentina’s Poverty Situation

In 2011, the population in urban centers had an estimated poverty rate of 12.2% (earning less than $5.50 per day). However, a national economic recession in 2018 combined with the financial toll of the COVID-19 pandemic led to the sharpest increase in poverty in Argentina in recent decades. Approximately 41% of the urban population now falls below the national poverty line.

Beyond high poverty, Argentina struggles with inequalities in key sectors including education and health care. Though Argentina has a relatively strong education system, there is a trend of high dropout rates and low college attendance as well as a steep inequality in education quality between urban and rural areas. Similarly, though Argentina has universal health care, it is decentralized, creating a large discrepancy in the quality of care. In particular, healthcare access is either poor or absent in more rural, remote areas of the country. These issues call for help from a variety of charities operating in Argentina.

4 Helpful NGOs Operating in Argentina

  1. Sumando Manos Foundation: One NGO doing great work in improving nutrition and health care in Argentina is the Sumando Manos Foundation. The organization has helped more than 7,000 children and their communities since its founding in 2005. It does this by “providing food and critical medical and dental attention and teaching fundamental health care.” Sumando Manos operates by visiting the same communities over a span of many years. Common dental problems and nutritional deficiencies have decreased by more than half in the communities that Sumando Manos serves. That is tangible evidence of Sumando Manos’s strong impact.
  2. La Casa Ronald de Argentina: McDonald’s humanitarian healthcare initiative in Argentina, La Casa Ronald de Argentina, provides support for families with young family members who have cancer and other complex care needs. Specifically, La Casa Ronald provides rooms within hospitals and houses where families can stay with their children while they receive medical care. This is an incredibly important service in Argentina where most quality medical care is located in urban centers and families have to temporarily migrate to accommodate the situation. Casa Ronald also has a Healthy Habits Unit that promotes healthy lifestyle choices and a Wellness Unit that provides snacks and books to families during their long days at the hospital. Since its founding in Argentina in 1998, Casa Ronald has provided nearly $37 million to 280,000 children and families facing healthcare emergencies
  3. Fundacion Leer: A third organization improving the quality of life in Argentina is Fundacion Leer. It is dedicated to providing educational resources throughout the country with the goal of 100% literacy for children across Argentina. In operation for over 25 years, its impact is no doubt a part of the literacy rate increasing from 93.9% in 1980 to 98.1% in 2015. In its time, Fundacion Leer has provided more than 2.5 million children with assistance in learning to read and write, more than 2.5 million books to educational institutions and trained 27,613 adults to teach basic literacy skills.
  4. Cåritas Argentina: Cåritas Argentina, an institution of the Catholic Church, exists to reduce poverty and improve the quality of life in Argentina. The organization provides direct aid, but also more central to its mission, its 40,000 volunteers provide emotional and spiritual support for vulnerable families. As its website explains, “The challenge is not only to provide food or shelter, but to accompany families and be the gateway to listen, contain, organize and plan tasks that stimulate human development.” Cåritas Argentina works in many sectors including early childhood education, addiction prevention and food response. Two specific examples of achievements include helping 5,300 families construct and maintain their own homes through its Habitat initiative and maintaining a network of  180 inclusive educational spaces.

These charities operating in Argentina fight poverty reduction by giving citizens skills, opportunities and services essential for success in life.

– Xander Heiple
Photo: Flickr

Argentina’s Economic Crisis
Despite being one of the richest countries in South America per capita in 2020, Argentina is currently grappling with poverty and an economic crisis. Argentina’s economy has been dramatically up and down for decades but the COVID-19 pandemic and the war with Ukraine and political instability have recently worsened it. Because of these combined factors, Argentinians are currently dealing with rising energy and food prices, state bankruptcies and reduced wages. Inflation is above 70% and could reach 90% before the end of the year. Today, 40% of Argentines live in poverty and about 10% of them could not afford “a basic basket of only food” in 2021. Here is some information about Argentina’s economic crisis as well as how the U.S. is providing aid.

An Alliance

The United States and Argentina have an alliance based on trade and shared priorities. These priorities include “democracy and human rights, counterterrorism and rule of law, improving citizen security, science, energy and technology infrastructure, people-to-people ties, and education.”

In recent years, the U.S. has been assisting with COVID-19 recovery, renewable energy development and promoting women-led small businesses. These measures aim to address as many factors as possible that led to the economic crisis and tackle them one by one.

Since the pandemic broke out in 2020 up until April 2021, the U.S. military has given $3.5 million in recovery aid to Argentina. According to U.S. Southern Command Admiral Craig S. Faller, this aid includes “protective equipment, medical supplies, and monitoring and screening tools.”

National Security

Another way the United States is improving Argentina’s economic crisis is by improving national security. In 2020, the U.S. Department of State gave $3.1 million to Argentina for counterterrorism efforts, including military education and training, improved worker’s rights, reduced child labor and job creation. The U.S. also helped develop the Western Hemisphere Counterterrorism Ministerial (WHCM), an alliance dedicated to reducing terrorism in western hemisphere countries and Argentina has been “a leading participant” and hosted a second ministerial in 2019. In the same year, Argentina became the first country in Latin America to declare Hizballah a terrorist group. In 2020, the U.S. made plans to strengthen security in Argentina through “legal, financial and law enforcement tools,” the U.S. Department of State reported.

Women in Business

Having more women entrepreneurs is critical to the well-being of the economy. In 2019, a “high-level U.S. interagency delegation” came to Argentina to support and grow women-owned businesses, which are “essential for creating economic growth and security,” the U.S. Department of State reported. This visit sparked the launch of the Academy of Women Entrepreneurs in 2021, an online and in-person program that focused on helping 30 Argentine women expand their businesses.

Through poverty, pandemic and inflation, the United States is improving Argentina’s economic crisis by extending COVID-19 relief, improving national security, expanding job opportunities and training and empowering women. In fact, Argentina’s poverty rate dropped by about three percentage points from the first half of 2021 to the latter half of the year. There is still a long way to go, but this alliance has been making progress.

– Ava Ronning
Photo: Unsplash

Child Allowance in Argentina
Countries worldwide are proposing universal child allowance, which generally entails a stipend to eligible children, to combat childhood poverty. As of 2022,
more than 356 million children worldwide live in poverty. This population lives on less than $1.90 a day. A study on a Universal Child Allowance found that somewhere between $50 to $150 a month could pull between 40% to 50% of children out of poverty worldwide. Childhood poverty remains a key area of concern for governments and nonprofits who recognize that a disparity in early life can lead to drastic consequences later in life. A universal child allowance in Argentina would provide Argentinian children living in poverty with financial help and stability for health care, education and other needs.

Argentina’s Program

Argentina’s, Asignación Universal por Hijo (AUH), or Universal Child Allowance program, which was implemented in 2015, is an example of this theory in action. Argentina implemented the policy as the third pillar of a part of its social state in 2015, and the policy guarantees a minimum of $55 per month to each eligible child.

Children in Argentina

Children make up more than 25% of Argentina’s problem, making it clear why child poverty is a key focus of the government and activist groups alike. Likewise, the median age of Argentina’s population is just 31 years old indicating a young population. Generally, a young population trend is a good sign for a country, as it means there will be a strong labor force in the future. However, countries that cannot care for their youth face challenges. In Argentina, certain marginalized groups still lack access to basic programs and education with particular disparities among indigenous groups and rural communities. A Universal Child Allowance in Argentina seeks to combat these discrepancies by ensuring that children in need have the $55 monthly allowance to serve their needs.

Wealth Inequality

In Argentina, there is a significant wealth disparity among the population. Some families send their children to tuition-required private schools, while others struggle to provide for basic necessities. The Buenos Aires Times reported in 2018 that Argentina’s richest 10% controlled or possessed more than 60% of the country’s wealth. As of 2021, Argentina’s national income reached nearly $16,860 while gross domestic product (GDP) hit slightly more than $19,950. On the other hand, a large segment of the population lives well below that mark. Conversely, a large segment of Argentina’s population is well-educated and employed. Social programs seek to combat the inequalities by lifting the poorest populations up from conditions of poverty.

Moving Forward

As Argentina’s AUH underwent implementation just five years before the devastating COVID-19 pandemic, there is no significant research about the immediate success of the program. However, Argentina has made great strides in many aspects of its social state which can be tracked using other data. The “Plan Familia” program which underwent establishment in 2009, aimed to increase school enrollment and access to health care. School enrollment levels are high on average across the country at just about 98% or 99%. This data is a positive sign because it means that education across the country is possible. A Universal Child Allowance in Argentina may be able to tackle the last percent or two to make education equitable and accessible. Programs like this seek to encourage long-term financial planning and stability with the hopes of evening out wealth inequality of the lowest earners.

Lara Drinan
Photo: Wikipedia Commons

Poverty in Argentina
Currently, 37% of people live below the poverty line in Argentina and are struggling due to the inconsistency of prices and jobs from inflation and changes in unemployment. Poverty in Argentina affects over 17 million people in the country, learn more about the unique struggles in Argentina.

Historic Inflation and Recent Economic Disaster

Argentina has felt the effects of intense inflation since the 1980s, but in recent months has seen record increases in these rates. The year-on-year inflation rate is the highest it has been in the past 30 years, exceeding 60 points, according to Peoples Dispatch. This increase has hurt those in the lowest income bracket the most, but the poverty rate is on the rise. It is estimated that 2,800 people are forced into poverty every day.

Despite that alarming amount, economists predict more could be hurt as the inflation rate could reach 90% by the end of 2022. The instability of inflation has made prices different on a variety of items that change weekly. This hurts those struggling to afford groceries and other necessities. The recent economic instability is a huge threat to those living in Argentina.

Unemployment, the Working Poor and the COVID-19 Pandemic

World events, such as the COVID-19 pandemic further impacted poverty in Argentina. The poverty rate hit between 46% and 47% towards the end of June 2020, at the height of the COVID-19-induced shutdown. The high poverty rate was due in part to the 3.5 million jobs lost during the pandemic. In 2020, the poverty rate related to an income of 14,718 pesos, or $193, per month.

The unemployment rate dropped to 7% at the beginning of 2022, however, the poverty rate includes 28% of Argentinians who hold jobs. The research found that from 2018 to 2022 that due to inflation and a combination of currency devaluation wages lost 20% of their purchasing power. The increase in unemployment during the pandemic increased the poverty rate, but as the unemployment rate decreased, the poverty rate did not.

The effects of outside events, like war or pandemics are global, but Argentina’s sensitive economy sees drastic changes easily. Changes in habitable actions and consumption also show the increase in poverty. For example, in 2021, Argentinians consumed the lowest amount of beef per capita (47.8 kilos) since the 1920s, Peoples Dispatch reported. The changes in unemployment and the increase in the working poor are changing poverty in Argentina.

The Future of Poverty in Argentina

The IMF began working with the Argentinian government in May 2018 and has a plan to help those most at risk. This calls for actions like the central banks to be independent and protect social spending. Those in poverty in Argentina need help since they are sinking even deeper into poverty.

Additionally, in May 2022, the Total Basic Food Basket increased by 4.6%. This means that a family of two adults and two children in Greater Buenos Aires must require an income of 99,677 pesos (or $796) per month to stay above the poverty line, according to Peoples Dispatch. This increase shows how difficult it is to survive in Argentina due to the fickle movements of the economy.

Changing economy and the socioeconomic inequalities that often affect employment rates further complicate poverty in Argentina. The recent increase in inflation implies there is a strong need for stability to save those falling below the poverty line every day.

– Ann Shick
Photo: Wikipedia Commons

Argentina’s Economy MinisterOn July 2, 2022, Martín Guzmán announced his resignation from his position as Argentina’s economy minister, which he held since December 2019, through a seven-page letter posted on his Twitter account. The decision arrived amid conflict in the government concerning the country’s current economic crisis and Argentinian Vice President Cristina Fernández de Kirchner pushing for Guzmán to leave his position. Guzmán alluded to recent disagreements “within the government coalition” as a reason for his departure. Many members of his team have also resigned.

Guzmán’s Career

On December 6, 2019, Argentine President (then-president-elect) Alberto Fernández designated Guzmán as Argentina’s economy minister. At the start of this career, the newly appointed Brown graduate had his first bill approved by the Senate just 11 days after his first day in office. The bill imposed tax increases in specific areas of the middle and upper class while providing tax benefits to the impoverished.

In early August 2020, the Argentine economy minister struck a deal to restructure $65 billion in foreign bonds. Most notably, the former minister engineered a $45 billion debt deal with the International Monetary Fund (IMF). The agreement aims to “promote growth and protect social programs” to tackle Argentina’s economic crisis.

Before resigning, Guzmán planned to head to France to discuss a $2 billion debt deal with the Paris Club of sovereign lenders.

Argentina’s Economic Crisis

Argentina’s economy has been suffering for decades. In July 2022, many Argentine sovereign bonds were worth as low as 20 cents on the dollar — a stark difference from higher rates in October 2020. Inflation in Argentina is staggeringly high, moving toward 70% by the end of 2022. As of July 2022, one United States dollar is worth about 126 Argentine pesos and this exchange rate is still increasing.

An economic disruptor includes truck drivers’ strikes, which have halted delivery of grain, “one of Argentina’s main imports,” to ports. In addition to the COVID-19 pandemic, the devaluation of the peso and a sizeable foreign debt of more than $323 billion by 2020 have sent Argentina into further economic turmoil.

Alongside these struggles, Argentina’s poverty levels are sharply increasing. Due to the severe inflation, the poverty rate in urban centers stood at 37% in the latter half of 2021 and is expected to increase to 39% after the first six months of 2022. This would equate to 500,000 more impoverished people.

The Economy’s Future

Guzmán’s resignation has raised concerns over the economy’s trajectory, most fearing it will head in an even worse direction. Other concerns regard Guzmán’s IMF deal and whether Argentina can meet these needs without the architect of the deal.

On July 3, 2022, one day after Guzmán’s resignation, President Fernández named Silvina Batakis Argentina’s new economy minister. Batakis previously served as the Secretary of Provinces in the Ministry of the Interior and as economy minister of the Buenos Aires province from 2011 to 2015. This week, she stated her belief in “fiscal balance” and her intention to follow President Fernández’s economic program.

In June 2022, the deal with the IMF that former minister Guzmán crafted underwent its first review. This is a sign that the deal may indeed make progress and ultimately come to fruition. A press release regarding this step stated that the program’s policies “will be critical to support Argentina’s economic recovery.”

There are other solutions and aids to Argentina’s economic crisis besides the appointment of a new economy minister — foreign aid. Amid this instability, at least 48 NGO projects in Argentina aim to improve the lives of the country’s poor. A notable organization is Fundación Integrar (Integrate Foundation). The foundation helps young Buenos Aires and La Pampa citizens living in poverty complete their higher education by providing financial aid and guidance to students. With the help of donations, the foundation has given higher education scholarships to 140 students to date.

In office, Argentina’s new economy minister Batakis will need to address the nation’s high inflation rate and foreign debt along with an increasing poverty rate. Yet, she is not alone in this fight — a deal with the IMF is underway and tens of organizations are serving the country’s poor.

– Sophie Buibas
Photo: Flickr

Bitcoin in Argentina
Economic consequences from the COVID-19 pandemic and supply chain shortages have ramped up inflation in Argentina to record levels. At its peak, economists estimated that inflation in Argentina reached a 60% increase since the beginning of the pandemic. The rapid deflation of the peso pushed about 37.7% of the population of Argentina below the poverty line by significantly reducing their purchasing power, signaling a serious economic crisis. The adoption of bitcoin in Argentina is helping people to fight against inflation and poverty.

Bitcoin in the Developing World

In recent years, many developing nations have turned to bitcoin for a couple of different reasons. First, bitcoin is decentralized, meaning that international organizations like the International Monetary Fund (IMF) do not regulate it. Second, bitcoin is highly effective at containing inflation and is a relatively steady asset as opposed to standard market investments and savings.

The cryptocurrency penetration rate in Argentina has reached 12%, Cointelegraph reported. This is more than double most other countries in Latin America. Due to the success of bitcoin in Argentina, the central bank motioned to forbid financial institutions from operating with digital assets.

The IMF and the World Bank claimed that cryptocurrency in developing countries is dangerous, because it opens doors for money laundering and economic volatility, according to Politico. Bitcoin is also an environmental hazard. “If Bitcoin were a country, it would be among the top 30 energy users in the world,” Foreign Policy reported. This means that as bitcoin increases in popularity around the world, it could harm the environment and worsen changing weather patterns.

The Key to Sustainable Global Development

Many economists believe that bitcoin and other forms of cryptocurrency hold the key to sustainable global development. This would be particularly beneficial to the world’s poorest nations and communities. Decentralized finance allows people to build entire financial ecosystems without intervention from world banks, according to Foreign Policy. Because of decentralized financial blockchains, people across the world have broader access to capital and can easily and securely transfer money.

People in the developing world usually experience exclusion from modern cryptocurrency systems due to their technological complexities and the necessity of online financial literacy. Because of this, the expansion of bitcoin in Argentina and other developing nations marks a victory in the fight against global poverty.

One of the greatest advantages that bitcoin offers to a country like Argentina is that it can provide a “financial identity” to people who have not had access to financial institutions like banks. As of 2022, 1.7 billion people across the world lack access to modern financial services, according to Foreign Policy. Therefore, providing access to financial assets is a priority in the fight for global development.

Bitcoin as a Method of Reducing Poverty and Inflation

The success of bitcoin in Argentina and other developing nations is catching attention around the world, particularly from the federal governments of rich countries like the United States and global organizations like the IMF. The IMF and the World Bank are actively working to prevent countries like Argentina from adopting bitcoin as a legitimate form of national currency. However, their efforts are failing because multiple countries in the Central African States, as well as El Salvador, have already motioned to adopt Bitcoin as a national currency, according to Politico.

While Argentina has not yet officially adopted bitcoin, the nation is experiencing significant economic growth and optimism for the reduction of the alarmingly high poverty rate. As economic complications from the pandemic and global conflicts increase, many countries in the developing world are finding significant successes in financial systems that have traditionally only benefitted rich nations.

– Ella DeVries
Photo: Flickr

HIV/AIDS in Argentina
According to UNAIDS, 140,000 adults and children were living with HIV/AIDS in 2020. Additionally, 5,600 new cases of HIV/AIDS emerged that same year. However, since 2015, the incidence rate for HIV/AIDS in Argentina has been on a steady decline. The Argentinan government and various organizations are working to ensure each person has access to treatment and education about HIV/AIDS. These efforts are leading to a safer and more equal society.

Past Efforts in Stopping HIV/AIDS in Argentina

There have been significant efforts to reduce HIV/AIDS in Argentina within the past 30 years. In 1992, the Argentinian National Ministry of Health created the National Control Program of Human Retroviruses to diagnose and treat patients and ensure giving the medication to the population. The program included more research into AIDS prevention and treatment while also providing the public with the necessary medical assistance and education to prevent the disease altogether.

In 1995, the Argentinian government passed another law guaranteeing nationwide access to HIV/AIDS treatment regardless of the patients’ affordability. According to the World Bank, the implementation of efforts to prevent HIV/AIDS saved 4,379 people from HIV/AIDS between 2000 and 2010.

Then, in 2015, Argentina began to adhere to the 90-90-90 target with the aim of achieving it by 2020. The rule targets are diagnosing 90% of people with HIV, treating 90% of people with ART and giving an undetectable viral load to 90% of those on ART. This target progressed Argentina’s goal of stopping HIV/AIDS.

Moving Forward

While Argentina is working to eliminate HIV/AIDS, more recently, its government is also working to improve human rights for those with HIV/AIDS. The Argentinian Congress passed a new law that made mandatory testing illegal, progressing the Argentinian society in the human rights field. This new law protects Argentinians who have HIV/AIDS against discrimination and allows them to remain confidential about their medical diagnoses.

Argentinians are working to end the stigma of HIV and protect the confidentiality of those who have it. Other organizations are also dedicated to stopping the spread of HIV/AIDS in Argentina. Established in 1987 in Los Angeles, the AIDS Healthcare Foundation (AHF) has the goal of providing care to HIV/AIDS patients at all times in their life.

In Argentina from 2016 until today, AHF provided 120,000 HIV tests and supported seven clinics with over 120,000 patients across South America. Their efforts allow for more people to get access and treatment to fight HIV/AIDS, and they are just one of the many organizations working toward stopping the spread of HIV/AIDS.

HIV/AIDS in Argentina continues to be an issue in society. However, with all the efforts from the Argentinian government and various organizations, more and more people are able to access treatments and health care. More work is necessary to fully eradicate HIV/AIDS from Argentina completely, Argentina is on its way to its goal of becoming fully HIV/AIDS-free.

– Janae O’Connell
Photo: Wikipedia Commons

Mental Health in Argentina
Effects of the COVID-19 pandemic have intensified mental health problems worldwide. The World Health Organization (WHO) published a scientific brief in 2022 showing a 25% increase in global anxiety and depression in the first year of the pandemic. Government response to mental health in Argentina during the pandemic reveals a crucial transitioning of its medical system.

Mental Health in Argentina – The Numbers

In 2015, Argentina’s Ministry of Health funded a survey that found that only about one in three people above the age of 18 with mental disorders receive treatment. The Ministry of Health administered approximately 4,000 household surveys to adults with fixed residences in Argentina’s largest urban areas. Researchers conducted the survey using the World Mental Health Composite International Diagnostic Interview, a comprehensive assessment of mental health that WHO designed. Individuals with low education and income were the least likely to receive treatment, according to the survey.

The COVID-19 pandemic has generated higher levels of stress and anxiety for many. A 2020 study by researchers at the University of Buenos Aires focused on the effects of Argentina’s mandatory quarantine on mental health in the wake of the pandemic. Researchers studied participants using online surveys on days 7-11 (from March 27 to 31, 2020) and days 50-55 (May 8 to 12, 2020) of the nationwide quarantine. The survey results indicated a rise in the percentage of participants with symptom indicators and suicidal thoughts between period 1 and period 2.

The relationship between poverty and mental health in Argentina is bidirectional. Just as mental health problems increased in the last couple of years, Argentina’s poverty level rose to 42% in 2020 according to The World Bank. Since 2018, the nation has been facing a severe recession that has led to a steep devaluation of the Argentine peso. The uncertainty surrounding this economic crisis and the ongoing pandemic draws concern for the mental and physical well-being of the approximately 11.7 million citizens who live in poverty.

Developments in Mental Health Care

Support for mental health in Argentina has been undergoing a transformation following the approval of the Mental Health Law in 2010. Argentina’s health care system is gradually transitioning from hospital-based to community-based care, placing focus on human rights and patient protection. The government implemented this law when public psychiatric hospitals still made up 89% of available in-patient beds, according to a study by the Ministry of Health.

The Mental Health Law is beneficial as it offers a shift from psychiatric hospitalization to community care, but certain socio-economic disparities exist between urban and rural areas that hinder some from getting the support they deserve. Argentina has the highest number of psychologists per capita in the world, but nearly half of them live in Buenos Aires, Argentina’s capital city. Many rural residents have less access to support systems or health professionals than those living in the cities.

Argentina’s New Mental Health Strategy

In April 2022, President Alberto Fernández addressed the effects of COVID-19 on mental health and offered a solution. Fernández and health minister Carla Vizzotti announced the implementation of the National Mental Health Strategy, aiming for an all-inclusive “recovery of society.” The plan includes major health care budgetary raise from 3.7 to 7.7 billion pesos, a 107% increase. The National Mental Health Strategy aims to expand Telehealth and community-based programs to serve the public. Fernández’ presented The National Mental Health Strategy alongside the inauguration of the Bonaparte Children’s Hospital and Adolescent’s Service.

Following the conference, Vizzotti met with the Federal Council of Mental Health and Addictions (COFESAMA) to address the federal strategy. Leaders from around the country analyzed the pivotal goals of the strategy, such as a “nationwide territorial operation for the promotion, prevention and care of community mental health.” The Ministry of Health has not yet announced when it will implement these plans and policies.

Looking to the Future

Argentina’s progressive outlook on mental health has led to some crucial developments for its medical system. Still, the Argentinian government needs to make efforts to breach disparities that exist for those with low income and low access to treatment, especially in Argentina’s rural regions. The National Mental Health Strategy’s emphasis on diversity and inclusion sets a hopeful precedent for Argentina’s future in health care.

– Evan Lemole
Photo: Pixabay

Being Poor in Argentina
Argentina is the third-largest country in South America with a population of 45.4 million people. A melting pot of ethnicities and a perfect blend between Latin-American and South European customs and traditions. Nevertheless, Argentina has a high poverty rate, rising year after year. Here are five facts about being poor in Argentina.

5 Facts About Being Poor in Argentina

  1. A 3 Year-Long Recession: Argentina’s economic development is following a troubled path risking a new default two years since the last one. This inevitably translated into a rise in the country’s poverty rate that in the second half of last year passed 42%, according to Al Jazeera. Such a rate in Argentina represents an omen to the risk of a new crisis of similar proportions to the ones of 1989 and 2001.
  2. Increase in Unemployment During the COVID-19 Pandemic: The effects of the COVID-19 pandemic had serious repercussions on developing economies like Argentina. As a result, the country counted a loss of 3.5 million jobs in the past two years of the pandemic, leaving many single-income families without a way to get by. This has led to many disorders and protests in the capital city of Buenos Aires that spread in other major cities around the country including Cordoba and Mendoza.
  3. Social Inequality and Poverty: The Organization for Economic Co-Operation and Development (OECD) examined the evolution of inequality and poverty across the decades. Argentina was one of the countries with the highest class inequality and relative poverty rates and from 2001 it made considerable progress in this matter. Unfortunately, those rates still remain high, way over the OECD average. Moreover, inequality in Argentina has strong intergenerational and regional components, meaning that the youngest part of the population is the poorest and the northern regions of the country are the ones with the highest poverty rate.
  4. House Poverty – The Everlasting Problem: Since its first big default in 1989, being poor in Argentina means also facing the house poverty issue caused by people’s inability or even discouragement in saving for long-term investments. The global pandemic has contributed to worsening this condition even more. Currently, almost 10 million people around Argentina are unable to pay their rent and have to move to cities and to nearby areas where they end up in illegal camps. Fortunately, organizations like Habitat for Humanity are working to address this specific problem by building or repairing homes, providing vital skills and providing first-response to all sorts of disasters around the world. As of 2014, Habitat for Humanity has contributed to building housing solutions that are hosting more than 4,000 families in Argentina.
  5. Education: Despite Argentina being one of the most educated countries in South America, its past military government applied a policy restricting access to education at every level. Such a slowdown in the development of the education system has not yet been overcome causing inefficiencies impacting other economic aspects like technological innovation that would support growth.

Concluding Thoughts

This summary is only a brief and partial picture of the much more complex political and socioeconomic situation of a developing country like Argentina. The hope is that these five points can provide an idea of what is like being poor in Argentina and what are the key elements to address to allow the country to free itself from poverty.

– Francesco Gozzo
Photo: Flickr

Argentina’s Informal Peso
Argentina’s informal peso, its ”dolar blue,” weakened drastically at the end of October 2021 and hit its all-time inflation high. The country’s risk rating increased by 19 points. The economic downturn arrived weeks before Argentina’s November 2021 elections, and economic improvement is long overdue.

What is the Dolar Blue?

The “Dolar Blue” is the unofficial rate of buying or selling physical United States dollars (USD) in an unofficial financial market in exchange for Argentine pesos. The transactions occur without the assistance of a banking institution or government oversight. Many transactions for Argentina’s informal peso occur right in storefronts or in the street.

In October 2021, the exchange rate hit 195 pesos per one USD. The exchange rate is typically greatly valued because this trade rate results in more pesos to the dollars for tourists and vice versa for those looking to use pesos.

In 2019, the Argentine peso lost value during an economic crisis due to suspending debt payments while the debt continues to climb for Argentina. The government had to act quickly to stabilize the peso. Since then, the Argentine government has slowly placed restrictions on the dolar blue to prevent any weakening of the formal peso.

What is a Country’s Risk Rating?

A risk rating is the measurement of the potential for non-payments on international loans that companies made to companies within the country being rated or to the countries themselves. It is the measurement to see how close a country is to defaulting on loans. Typically, the factors that lead to an increased risk rating are out of a countries’ control. However, the risk rating is the calculated risk that international businesses would undertake when dealing with the measured country. The higher the number, the greater the chances of business deals collapsing.

As Reuters reported, the risk rating for Argentina expanded 19 points when Argentina’s informal peso reached its all-time high of 1,672. It is essentially Argentina’s credit rating, but the higher the number, the lower the chance for foreign investment opportunities. This new risk rating could lead international companies or loan businesses to avoid working in Argentina or setting up loans there.

Without additional investment, the job market could have few opportunities to develop new jobs. There is little chance that unemployment rates could decrease.

Why Did this Economic Crash Happen and What Does this Mean for Argentina?

The two main factors causing the current economic crash are the country’s upcoming elections and growing inflation. The majority of surveyed Argentineans’ stated that their largest concern was the economy. Argentina has a history of economic downturn during periods of change in political leadership and growing economic fears. Argentina’s informal peso and formal peso have fallen in the past during periods similar to what the nation is experiencing now.

The drop in Argentina’s informal peso means economic growth has stagnated once again. Financial experts predicted Argentina’s impending devaluation of its formal currency, which appears to have started with the devaluation of its informal peso. With the devalued informal peso, battling inflation rates, four out of 10 Argentines live in poverty and have few means of escape.

Argentineans in poverty are struggling with the prices of necessities and with inflation. This is impacting both formal and informal pesos and the outlook is dour, according to The New York Times. Argentina’s informal peso brought tourists and new businesses to the country to support local Argentine companies and operations. With a destabilized and devalued the informal peso, more Argentineans are at risk of losing income. The devaluation of Argentina’s informal peso and widening country risk signals a long way to go before returning to a stable economy.

Is the Outlook Truly Grim?

The outlook is not entirely dismal. As grim as things look for Argentina economically, there are ways forward with the devalued informal peso.

In September 2021, Argentina reported economic growth. The poverty rate decreased slightly, which came as a pleasant surprise to many. In the first half of 2021, the poverty rate decreased to 42% and shows signs of continuing to decrease. Many did not expect the growth, given the difficulties of the COVID-19 pandemic. However, the growth signals that there is a chance for improvement despite the downturn of the peso and the risk rating.

In the weeks following the elections, the economy is likely to stabilize again. After the 2019 election, while the pesos’ exchange rates were still higher than average, they stabilized briefly. However, the recovery was short-lived due to the COVID-19 pandemic. Since then, the economy has struggled to restabilize. In the days since the COVID-19 pandemic first impacted Argentina, the economy has been slowly stabilizing and working towards recovery.

 After the 2021 November elections, there is a good chance for economic recovery and stabilization. Argentina’s informal peso could recover and the risk rating could decrease. The economy could revitalize with new business and partnerships.

Support for Argentina

Argentina has faced economic issues for several years, but they are not alone and receive help from many organizations, including The Working World (TWW). Brendan Martin founded TWW after witnessing the result of the Argentinean economic difficulties. The efforts on the ground that individuals made to start businesses and launch democratically operated businesses boosted the economy, and TWW decided to continue supporting this trend.

TWW works by partnering with businesses interested in furthering their workers’ rights to make decision-making processes more equitable. The organization designs loan packages to give the loans to pre-set projects that are in the hands of workers and repayment requires minimal interest.

TWW is a registered nonprofit organization in both the United States and Argentina. It understands the various currencies in Argentina, the exchange rates and the impacts both have on the Argentine economy.

Around the time TWW formed in Argentina and began democratizing businesses and stabilizing the workforce, the informal and formal peso stabilized in the exchange rates. Since then, TWW has expanded operations to more countries to transplant these business models and provide job security in countries. One example is Nicaragua or areas hit that hurricanes hit in the U.S. while maintaining some operations in Argentina.

TWW’s work has been invaluable in stabilizing the economy and workforce. The economic difficulties that inflation and political instability caused are manageable, largely because of nongovernmental organizations like The Working World.

– Clara Mulvihill
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