April 3, 2020
1. Government extends quarantine through April 12th
Through Decree 325/2020, published in the official gazette, the government extended preventative and obligatory social isolation through April 12th. The decree gives legal validity to President Alberto Fernández’s announcement on Sunday, where he confirmed that his decision is based on the prioritization of life above all else but stated that this does not mean that government will ignore the country’s long-running economic problems. Additionally, through Decree 331/2020, the country’s travel ban was extended through April 12th. The new decree establishes that Argentines abroad can enter the country by land through certain border crossings that have been determined as secure, with a limit of 500 people daily. The crossings will be open from 8am to 4pm. Moreover, those without access to these border crossings will be assisted with lodging, nutrition and other necessities through the embassies and consulates in whatever country they are in.
2. Government to relieve import duties for certain sanitary and medical items
Decree 333/2020 exempts import duties for a list of sanitary and medical items used in the campaign against the novel coronavirus in Argentina. The foreign import duties are payments made on imports not within the Mercosur common market. The measure also exempts products from the “statistical tax,” which currently stands at 3%.
3. Government extended the list of activities and services declared essential in the emergency
Government, through Administrative Decision 450/20, expanded the activities considered essential during the public health emergency.
1. Sale of building supplies and materials.
2. Activities related to production, distribution and commercialization of forestry and mining.
3. Tanneries, sawmills and wood product factories, mattress factories and road and agricultural machinery factories.
4. Activities linked to foreign trade: exports of ready-made products and imports essential for the functioning of the economy.
5. Exploration, prospecting, production, processing and commercialization of nuclear fuel.
6. Essential maintenance and fumigation services.
7. Mutual and cooperative credit societies, by means of minimum shifts, for the sole purpose of guaranteeing the operation of the credit and/or payment system.
8. Registration, identification and documentation of persons.
People covered by this Administrative Decision shall process the Single Certificate of Enabling Activity – Covid-19.
4. The bondholders suggested postponing payments for six months because of the pandemic
Economy Minister Martín Guzmán confirmed that he will continue conversations with private lenders until the end of next week. The offer includes contingent capital instruments like the voucher tied to GDP that was used in the 2005 and 2010 swaps to exit default, as long as they are “assessed” by creditors. It is worth noting that the vouchers in these operations were not attractive for investors and forced the government to pay back less to creditors. Yesterday, the most outspoken creditors rejected the guidelines presented by Argentina and expressed that the only chance of reaching an agreement rested with a six-month delay in payments until the pandemic is under control.
5. Poverty rate increases to 35.5% in 2019
A report by the Argentine statistical agency (Indec) revealed that the poverty rate increased to 35.5% in the second half of 2019, 3.5% higher than the 32% rate registered in the second half of 2018. Moreover, the homelessness rate increased by 1.3% to 8% in the same time frame. This means that of Argentina’s population of 47 million, approximately 16.4 million did not have sufficient income to obtain nutrition, basic services and clothing to remain above the poverty line. Within this figure, approximately 3.7 million are homeless, meaning incomes did not reach a level to purchase a minimum of nutritional items for sustenance.