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Brazil is Beset by Protests. Could Buenos Aires and Argentina be Next?

19 Dec

brazil-2-170957492_620x350As the numbers rise to millions across Brazil taking to the streets, one of the many questions arising from the widespread agitation is, could the demonstrations in Rio and Sao Paulo spread across the continent to Buenos Aires and beyond just like with the Arab Spring? Let’s look at South America’s second biggest country, Argentina.

On the football field, they possess one of the biggest rivalries in international football, but politically both Argentina and Brazil may find themselves on a similar path.

Both are ruled by women, Cristina Fernández de Kirchner in Argentina and Dilma Rousseff in Brazil.

They, and the leaders before them, have steered their countries through a time in which a great reduction in poverty has been seen. In Brazil, 40 million have entered the middle-class, in Argentina poverty has decreased from a post-2001 default high of 57% to 27% unofficially (this figure is disputed by the Argentinian Government which claims it is much lower).

According to the World Bank, South America is the most commodity-dependent region in the world and favourable world markets throughout the 2000s fuelled this mass poverty reduction, but that didn’t mean the money had to be used to help the poor. Therefore, the Kirchners and Lula were loved.

#ChangeBrazil

Politically, the adage is that Argentinian always protest, the Brazilians never do. Perhaps hence why the massive protests have engulfed Brazil so quickly and forcefully. The hashtags are #Brazilawake and #ChangeBrazil. The giant has finally awoken, they are saying.

For Argentinians mass protests are nothing new. On April 18th, nearly one million people took to the streets across Argentina to protest against the Government. Comparing the two countries sizes, Brazil with 180 million against Argentina’s 40 million, the Argentinian protests are bigger than any per head thus far taken place in Brazil.

The issues are similar. Government corruption, crime, spiralling inflation brought Argentinians out in mass. The Brazilians say they have first world stadiums but third world services, the Argentinian say the have the Pope and Messi but a corrupt Government.

Transport in Buenos Aires is not just bad, it is deadly. 51 people lost their lives in a train crash at a central station in February 2012. Two weeks ago, three people died and several hundred were injured when a train crashed on the same line.

Brazilians are enraged by inflation running above 10%. In Argentina, it is around 25%. This is the unofficial figure. The Government claims it is close to 10%, all the while giving public sector union workers increases per year of close to but never 25%.

In Brazil, the people say they have high taxes but no decent services. In Argentina, they say their high taxes subsidise overgenerous benefits to the poor unemployed. A way of buying votes as the Kirchners get most of their votes from the poorest classes.

Big Mac

Government interference in Argentina means the price of a Big Mac meal is about €2 cheaper than other meals on the menu. Why? Because ‘The Economist’ magazine measures inflation and purchasing power parity using the price of a Big Mac in McDonalds in various countries. Keep the Big Mac low, inflation is (offically) low.

But inflation is high and with the legacy of lost savings from the 2001 default, nobody wants to save in the Argentinian currency, pesos. To prevent capital flight, the Government has introduced restrictions.

No more than 1000 pesos (141 euros) can be taken out per day, you have no way of changing your pesos for dollars and if you have an Argentinian bank account, you’d can’t pop over on the boat from Buenos Aires to Uruguay and get dollars. Your bank card won’t let you.

While Brazilian officials attempted to limit investigations on public offices with a law that was later rejected by a Congress reeling from the mass protests across the country, the Argentinian Government continues to try and stifle the Judiciary and the media conglomerates. Both have seen parts of these laws introduced by Government declared unconstitutional by the Supreme Court.

Corruption

Details of corruption are rife. Every Sunday night (Link in Spanish), Argentina’s most prominent journalist, Jorge Lanata, reveals more details of how the Kirchner’s have embezzled millions of dollars in public money. The Government has responded by ordering the football association to move the weekend’s most prominent football game to directly clash with the programme. So far, it hasn’t worked. Politics has defeated football in the ratings war three weeks in a row.

So, will something like a 20 centavos rise in bus fares be a catalyst to bring about mass protests in Argentina? It’s extremely hard to tell, but the answer is probably no.

The April 18th protests against the Government brought large amounts of people, but the Government could still mobilise around 400,000 to take to the streets of Buenos Aires alone last month to celebrate ten years of the Kirchners in power.

Argentina is a divided society. For anti-Government protests, the affluent neighbourhoods of Buenos Aires are deserted as the richer parts of society protest outside Government buildings. They are sick and tired of high inflation and capital controls among much else. For the poorer classes, the Kirchners have meant better lives or at least the hope of better futures.

Of course the Brazilian protests may be drawn across the same lines. A poll at the June 18th protest in Sao Paulo said those protesting are three times more likely to hold a college degree and almost 75% are demonstrating for the first time. This suggests a young, uninhibited, confident middle-class believing they have the right to better things originally drove the protests, but which has since developed into a classless popular movement which has widespread support across swathes of the Brazilian population.

In South America, only Argentina has had a larger middle-class increase in the past decade. From 2003-2009, 24% of the population entered the middle-class compared to 22% in Brazil. This suggests, like in Brazil and in the Arab Spring countries before them, Argentina is having a massive social change which could lead to a strong protest movement.

But unlike Brazilians who can look to the future with a degree of certainty at least with regards its currency and inflation, Argentinians don’t know what awaits them year-after-year. Could a 2001-style default happen again and if so when? Such uncertainty can lead to paralysis.

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Posted by on December 19, 2013 in Uncategorized

 

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