Deliberations |Wen Qiulin.
Last Wednesday (24 January), Argentina held a 12-hour national general strike, attended by about 500,000 people who opposed the new policies enacted by Millay. **The most shouted slogan from the crowd was "The motherland cannot be sold." Because the core of Milley's new deal is to sell off a large number of Argentine state-owned assets.
In order to ease the pressure on funds, Argentina began to turn to the International Monetary Fund (IMF). On January 10, Argentina announced an agreement with the IMF to receive $4.7 billion in funding, which will be used to repay the country's debt to the IMF. However, to receive the money, Argentina must meet the demands made by the IMF. While the IMF welcomed the "ambitious stabilization plan" promoted by Milley**, they warned that the IMF would turn off the funding "tap" if it did not see "sustained and durable implementation" of fiscal adjustments.
To put it bluntly, if Milley does not boldly implement the "shock" and fails to implement the plan to become an asset, then the IMF will close the "faucet" of funds. Therefore, Millae relied on the sale of Argentine state-owned assets to solve the problem of lack of money. However, this is only a drink to quench your thirst. Even if Argentina gets out of the predicament in the short term, it will not see the future in the long run.
However, recently, voices praising Argentina's "shock **" have inexplicably appeared on the domestic Internet. In an article entitled "**Soaring** Surplus, Whose Face Did Argentina's Reform Slap?" The article said that after Milley took office, Argentina continued to rise sharply. The MSCI Argentina index has hit a record high since the implementation of economic reforms in Milley**. Argentina's Merval Index in 2023** exceeded 360%, and on January 19**11750,000 points, a record high for the second consecutive trading day.
When Argentina's economy was in shambles, what I didn't expect was that there were still people who envied Argentina. However, in this article, it is not mentioned that in just two months after Milley took office, Argentina's inflation rate in December 2023 has reached 211%, and the inflation rate has almost doubled in the past two months.
According to data, since December last year, Argentine food has almost doubled, and even the abundant beef has soared from 35 yuan a kilogram to 70 yuan a kilogram. Argentina's central bank recently released a report that expects the country's inflation rate to reach 213% in 2024, which is even higher than in 2023. There are also **and think tanks**, and the figure will be between 200% and 250%.
Thinking of Argentina**, although **in 2023** will exceed 360%, Argentina's CPI index has also more than tripled since the beginning of last year, and this is only a public price index, and the actual prices in people's daily lives have risen even more. In Argentina, the increase in the past two months has been particularly significant. This is equivalent to the fact that the prices of all commodities have doubled in two months, and then, as a capital, will naturally double due to inflation.
Argentina's chronically high inflation stems mainly from previous editions** of relying on money printing to finance spending. However, price pressures increased further in December as Milley** devalued the currency's artificially official exchange rate by 54% and allowed the pricing agreement to lapse.
To solve Argentina's problems, will "shock **" alone work? The answer is no. And forty years ago, "shock**" was carried out by Alphoncin** in Argentina and proved to be unworkable.
In 1985, Alfoncin, then the Argentine and Radical Alliance, implemented the "shock**" Ostrar plan according to the advice of American experts, which included: issuing a new currency, Ostrals, freezing wages, prices, exchange rates, etc. The plan had some initial success, but then had serious consequences. According to the World Bank, inflation in Argentina even exceeded 3,000% in 1989. Due to the resistance of the opposition, businessmen and other parties, the "shock **" finally failed.
To confirm that Argentina's reforms have been successful with a ** increase is to generalize. At present, because Argentina's reform measures have been questioned and opposed by the left and trade unions, and even 500,000 people have participated in ** activities, whether they can continue to promote it is a big question. After all, the "shock **" will cause rapid hyperinflation in Argentina, and the final result will be to exhaust the savings of ordinary people, many people will be destitute all of a sudden, most of the state-owned assets will fall into the hands of a few oligarchs, and class antagonism and social contradictions will intensify.