ARGENTINA-ECONOMY: Hidden Inflation Increases Poverty

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, May 11 1997 (IPS) - In the 1980’s, when hyperinflation spurred poverty and inequity throughout Argentina, falling living conditions led to violence, and the looting of supermarkets.

The government has managed to rein in prices in the 1990’s, and the inflation rate last year ran at only 0.6 percent. Poverty, however, has continued to increase since 1992 due to other causes – firstly, high unemployment, and secondly, hidden inflation. And, just as the agressive high inflation led the poorest sectors to respond by assaulting supermarkets, now that the price increases are less open peoples’ reactions have followed suit.

The supermarkets are still robbed – not by violent mobs but silently, by individuals.

Employees in a leading supermarket chain, who asked to remain anonymous, told IPS that several trolleys full of empty packages are removed from the stores each day – including prepared foods, yogourt, biscuits, pizzas, ham and other cooked foods, eaten by hungry shoppers.

“People come to eat lunch and dinner in the supermarket,” the said, despite strict orders not to mention the problem for fear of encouraging the practice.

According to data offered by the National Institute of Statistics and Censuses, average price growth over the last 12 months was effectively 0.6 percent. But if the performance of the main products of the basic consumer basket are considered alone, inflation was actually far higher.

In the classification of basic foods, including those products needed to meet the nutritional requirements of a family, some of the products increased between 4.2 and 21.4 percent in the last year. People unable to afford this basket of goods are generally classed as indigent.

In the last year, bananas increased 21.4 percent, eggs 15.5 percent, cheese 13.8, milk 12.1, potatoes 9.3, lettuce 6.3 and apples 4.2 percent.

Local transport and communications are other areas where the increases have had a heavy impact on the poorer families. In the last year, transport costs have risen 17.4 percent and communications 63 percent.

The difficulties of access to the basic products do not only respond to this hidden inflation but also to the lack of employment. According to INDEC, 21.5 percent of the heads of household with at least one child are out of work, and 35 percent have been looking for a job for more than nine months.

Amongst the unemployed interviewed by INDEC, 30 percent confessed they can no longer go out to look for work as they cannot pay for transport. For them, the increases in transport and telephone charges have a direct impact on the increasing breach separating them from the labour market.

The Statistics Institute also indicated that in the last year, the number of poor people in the Argentine capital increased 12.5 percent, reaching 28 percent of the families living in the city. This is the highest percentage this decade.

The sociologist, Nestor Lopez, of the United Nation Childrens Fund (UNICEF), said little employment is being generated in Argentina and the jobs available need ever increasing levels of training.

Thus even shelf-fillers in supermarkets now have to have completed secondary school and when a job comes up, endless queues form outside the stores.

The president of Caritas Argentina, the Catholic Bishop, Rodolfo Rey, confirmed the causes of the increased poverty and unemployment should be looked for in the government economic programme, the same document which claimed to have detained inflation.

Towards the end of the 1980’s, poverty had reached a peak of 47 percent in the inner belt of Greater Buenos Aires, and 64 percent in the outer. Since then, with the stability achieved under the presidency of Carlos Menem, the indices took a downward pitch until 1992.

In 1992, the poverty indices in these belts fell to 15 and 25 percent respectively.

Since then, even when the economy continued to grow at a rate of seven percent per year, the number of poor people started to increase. Now, the INDEC data state there are 28 percent of poor homes in the inner belt and 42.4 in the outer.