Bread or medicine

In the heart of Buenos Aires' suburb of Merlo, a small bakery owned by Martin Pinto has become a microcosm of Argentina's economic crisis. The decision of whether to buy medicine or bread lies with an elderly woman who visits daily, her choices reflecting the broader struggles of ordinary citizens under President Javier Milei’s leadership. Milei, often described as an exception among Latin American leaders, has drawn praise from global conservatives, including Israeli Prime Minister Benjamin Netanyahu and former U.S. president Donald Trump. His economic policies have been lauded by international financial experts, yet the reality on the ground tells a different story. The bakery, located in a bustling hall filled with ovens and machinery, serves as both a place of employment and a symbol of dwindling resources. Pinto, who also serves as the local association president for bakers, explains how inflation and rising costs have forced him to make difficult decisions. Prices in his bakery have remained unchanged for ten months despite a nearly 700% increase in gas prices over the past two years. Electricity costs have risen by up to 230%. With subsidies removed, many bakers can no longer afford to operate, leading to widespread closures. Over the last two years, consumption of bread in Argentina has dropped by approximately 55%, resulting in the closure of nearly three thousand bakeries and the loss of around 17,000 jobs. Pinto has had to lay off seven workers, some of whom now work for Uber. Argentina, a largely agricultural country, faces severe food shortages. Despite Milei’s claims of reducing annual inflation from over 200% to around 30% and eliminating budget deficits, the average citizen feels little relief. According to the Organization for Economic Co-operation and Development, economic growth is projected to reach 2.8% this year, driven by agriculture, mining, and energy sectors. Milei bets heavily on the Vaca Muerta gas field in northern Patagonia, expecting export revenues to exceed $1.8 billion next year. Lithium and copper mining in the Andes are also seen as potential growth areas. However, the benefits of these developments remain limited. Economic analyst Jimena Zuniga notes that while certain industries have flourished, the overall structure of the economy remains highly uneven. “Everything is focused on competitive sectors without meaningful recovery across the entire economy,” she writes on the Bloomberg Economics platform. The disparity is evident in everyday life, where many citizens continue to struggle with basic necessities. Since taking office in December 2023, the National Pension Fund reports that approximately 330,000 regular employees have lost their jobs. The economic recovery remains elusive for most citizens. Analyst Martín Kanenguiser, writing in the journal Americas Quarterly, describes Argentina as suffering from a dual economy, where formal and informal sectors coexist without integration. This situation has deepened under Milei’s administration. Milei positioned himself as a honest alternative to the political elite, challenging established norms. Yet, corruption persists even under his governance. He has opened Argentina’s markets to foreign competition by removing tariffs, aiming to boost competitiveness. However, this move has led to the collapse of thousands of small and medium-sized businesses. Official data shows that over 27,000 companies have closed since the start of his mandate. The Argentine industry, long protected from foreign competition, now faces its second major challenge. “The Argentine industry needs a bit of protectionism,” one expert noted, highlighting the ongoing debate over economic policy and national sovereignty. As the nation grapples with these complex issues, the fate of individuals like the elderly woman who visits Pinto’s bakery continues to reflect the broader economic landscape.