Argentina increases public spending on poverty, education

As the US and European nations cut government spending as part of extreme austerity measures, one Latin American country is increasing public spending. In Argentina, the spending on programs targeting poverty has revived approval ratings for the South American nation’s first woman president Cristina Fernandez de Kirchner. FSRN’s Marie Trigona reports from Buenos Aires.

TRANSCRIPT

Earlier this year, President Cristina Fernandez de Kirchner extended child benefits to the unemployed and workers in the informal job market who have children. Nearly four million children receive this universal child benefit.

Daniel Barancancho is the Secretary of the CTA Argentine Workers Central, the country’s second largest union. He says that this is one of the largest social programs implemented in Argentina’s history.

VOICE OVER DANIEL BARANCANCHO: This program has covered a severe necessity in many homes. If parents don’t have work, they don’t have an income. All children now have a guaranteed income of 60 dollars. This income has allowed many families to escape severe property and a huge progress.

Tax revenues and reserves have risen thanks to a healthy trade surplus, giving the government legroom for spending. In recent weeks Fernandez de Kirchner raised the minimum wage by 23 percent and the lower house has approved an 80 percent increase for pensions. Despite the economic crisis, regionally economies have expanded allowing them to tackle issues like poverty. However, critics say that trade surpluses are susceptible to drops in commodity prices. Corina Rodriguez Enriquez is an economist and researcher with The Interdisciplinary Centre for the Study of Public Policy

VOICE OVER CORINA RODRIGUEZ ENRIQUEZ: The increase in the international prices of agro-exports benefited Argentina. The current government raised the taxes on these exports, which has allowed Argentina to escape from the global economic crisis. This tax revenue from the trade surplus has allowed the government to carry out the current public spending programs.

The nation’s Scientific and Technical Research Council led a major study looking at the effects of social spending programs on poverty. According to the study, since the universal child benefit went into effect in 2010 poverty decreased between 13 and 30 percent. It may have longer-term effects too. More children have entered the educational system since parents must send their children to school as a requisite to receive the monthly welfare assistance.

Gloria Rodriguez is a mother of three children. Her assistance subsidy went up from 50 dollars to 180 dollars. Rodriguez, who is unemployed, says it makes a big difference.

VOICE OVER GLORIA RODRIGUEZ: Many times I don’t have enough money to buy food or shoes for my children. Before, I was getting the unemployed subsidy of 50 dollars per month per family. What can you do with that amount? Nothing. I’m not saying that now the difference is great. But in my case with three children, or mothers with four or five children, the child does help because it adds up.

However, the assistance is a far cry from Argentina’s minimum salary of 466 dollars. Nearly 14 percent of Argentina’s 40 million people are classified as poor meaning that they make below the minimum wage.

Carlos Gabetta, Director of Le Monde Diplomatic in Spanish, characterizes the current government’s policies as only slightly progressive and says the program fails to tackle the structural problems of poverty and joblessness.

VOICE OVER CARLOS GABETTA: This government when compared to former governments is a little bit better, but I don’t think it will resolve any deep-rooted social problems. It’s a charitable government. The nation’s poor need jobs. How can a family survive on 90 dollars a month, when the cost of basic needs is over 600 dollars and the parents don’t have work? The nation’s development policies are typical of an underdeveloped nation, a very underdeveloped nation.

Argentina’s economy has grown faster than the US economy in recent years. Unemployment has not risen above 10 percent since 2008. This is partly to the government offsetting joblessness with subsidies for industry to keep workers in jobs. In addition, Argentina has launched a job program for the unemployed in which more than 100,000 people receive salaries for work in cooperatives. Argentina’s spending plan has had some affect on joblessness and poverty, however public policy could backfire if the world food prices were to fall suddenly, severely affecting the trade surplus.

Marie Trigona, FSRN, Buenos Aires