Crawford School of Public Policy

The impact of COVID-19 has been felt across the globe, affecting every aspect of life, from health and economics to travel and social wellbeing. This special report is brought to you by Nicolás Martins, one of our Crawford School Alumni and covers his perspective on events in Argentina.

Argentina, like many other countries, neglected the potential risk of COVID-19 in late February, when news about the pandemic was fast spreading across the globe. The first reaction of the Minister of Health was to say that it was very difficult for COVID-19 to reach Argentina because of its sub-tropical weather and that the citizens should be more concerned about Dengue fever, a mosquito-borne tropical disease. In the meantime, airports lacked the necessary temperature controls and sanitary measures to mitigate the possible inflow of infected travelers from abroad. However, in mid-March the situation took a turn in the opposite direction. The recently elected president, Alberto Fernández, decided to implement one of the most rigid and longest quarantine periods in the world so far, named Aislamiento Social y Preventivo Obligatorio (Preventive and Compulsory Social Isolation Decree).

Since then, the situation has evolved through different stages. In the beginning, the very early weeks, the whole country strongly supported the president’s decision despite the harshness of the isolation measures and convened at their windows and balconies every night in a symbolic applause to support and empathize with the tireless labor of the health professionals. The president’s public image ranked very high in polls and the number of people infected and deceased by the virus per inhabitant was considerably low compared to most neighboring countries. It was also much lower than the rate of the more developed countries.

While deciding if the pandemic was more of a health or economic crisis, the national government in coordination with the governors of the provinces bought time to strengthen the infrastructure of basic public hospitals and purchased critical health supplies such as chinstraps, respirators and tests. They also designed a set of income-based policies aimed at mitigating extreme poverty and business crisis due to the economic downturn.

A second stage emerged after 90 days of quarantine, around mid-June when mixed results in almost every aspect mentioned above started to show. On the health side, while most of the inland provinces performed reasonably well in terms of infection and mortality rates, the metropolitan areas such as capital cities and, specifically, the city of Buenos Aires along with Greater Buenos Aires, where more than a third of the whole country’s population reside, started to see their “R0” contagiousness rate increase rapidly. From the economic perspective, there was a pronounced drop in economic activity that seriously affected small businesses, shops and small to medium-sized companies to the point of actual bankruptcy, closing or firing of workers, despite it being legally forbidden.

As for the political and social situation, a new word from the main opponents of the quarantine situation emerged, “infectadura” – a play on words between “infection” and “dictatorship”. The social discontent increased due to the slow implementation of income-based policies and the sense of “not-enough” help for many sectors. At the same time the National Government postponed Congress sessions until they finally began sometime later in a virtual format, while the judiciary system still remained practically without activity. There was an intention to nationalise a major grain-exporting company called Vincentin that entered an erratic path. The first proposals for a one-off tax on the Argentines’ biggest fortunes arose from the ruling party in order to help pay for the coronavirus response. And more recently, a government’s judicial reform suspected of delivering “impunity” for ex-Kirchnerite officials is underway. All of these paved the way for a series of protests, rallying against the government’s measures on almost every national holiday during the quarantine.

As the country is navigating the third stage of the quarantine with the beginning of opening-up in August and getting close to 180 days since its start, there are a few more up and downs that will condition the solution to exit to this labyrinth in the near future. On the positive side, the city of Buenos Aires – the capital of the Argentine Republic – among other provinces started to relax restrictions on social isolation and allowed the opening of small shops and businesses as their infection trajectory is flattening and the ICU beds occupied by COVID-19 patients did not surpass 70 per cent. Furthermore, the National Government has recently announced that Argentina and Mexico will co-produce millions of doses of a coronavirus vaccine developed by scientists at the University of Oxford and Swedish-British pharma firm AstraZeneca, and it is expected to be ready by April 2021. The National Government has also reached a debt agreement with foreign creditors after restructuring of $65 billion in foreign bonds, which will allow the country to avoid a new national debt default.

On the negative side, the number of daily infections has increased in the last month not only in the Greater Buenos Aires but also in some of the inland provinces, in particular those bordering northern countries of the region, where the virus is not controlled and the national borders are being surpassed without any kind of control by local authorities. The levels of positive rate of PCR tests that detect the genetic information of the virus, the RNA, suggest that the “Plan Detectar”, the national strategy of test and trace, has not been effective enough as the country is reaching similar rates of infections than many European countries, although the number of people deceased is still lower.

As for the economic situation, Argentina’s international reserves continue to drip out even as the government tightens controls, with a gap between the official exchange rate for the US dollar and the black market currently at 80 per cent, mainly because with a dramatic fall in revenue, the federal government has appealed to injecting liquidity, more than doubling peso emission to face all its social commitments and subsidies.

The future of Argentina in terms of health, social and economic conditions post-pandemic remains uncertain. From an initial success of an early lock-down, the country is reaching a point where people are feeling exhausted, the economy is collapsing and the political turmoil is growing, in line with the increasing number of daily confirmed new cases of COVID-19. Tightening the quarantine once again at this time could create a greater social imbalance. While many governments in the region state that the way out is through the private sector fueling the economy, the Argentine government claims it is with “more state”. At the same time, Argentina’s fiscal deficit in 2020 estimates are around 12 per cent of GDP (Gross Domestic Product). Negotiations with IMF (International Monetary Fund) restarted recently in order to replace a defunct $57 billion standby lending deal from two years ago. An “intelligent quarantine” strategy advocated by many economic sectors and political opposition has not yet been tried, since the Government pretends that there is no more quarantine at all. Argentina have to wait for the 60 measures that the National Government plans to unveil in the upcoming weeks.