Between January 2014, when the then president of Argentina Cristina Fernández de Kirchner put into effect the first of a series of plans to combat inflation through products with sales values agreed with the industry, the consumer price index (CPI) increased 1,338%.
The program, initially called “Prices Care” (and later renamed and relaunched on several occasions), was passed from government to government, including that of the conservative Mauricio Macri, without major results.
The evidence is in sight, inflation in Argentina was 38% in 2014 (the year of launch), 25% in 2015, 40% in 2016, 25% in 2017, 48% in 2018, 52% in 2019, 36% in 2020, 52% in 2021 and, so far in 2020 (four months), it has already reached 20%.
The strategy, obviously and beyond Argentina’s recurring problems with inflation, is inefficient when it comes to avoiding widespread price increases.
The Care Prices program entered into force on January 1, 2014, including a basic basket of products marketed throughout the Argentine territory.
Mexico’s plan against inflation
The plan launched these days by the Government of Mexico has several points in common with the Argentine. It focuses on products of the basic basket that are mainly bought by the popular sectors, since it is understood that food inflation works like a tax that has a much greater impact on the economies of those who have the least, who are the ones who spend relatively more on food. meal.
the same president Andrés Manuel López Obrador knows the limitations: “It is not to say, ‘with this we solve the problem’. No, it is doing something, not staying with our arms crossed. This is going to help, you have to take other measures”, he said when he presented the strategy.
The Mexican plan focuses on 24 basic products and will last at least six months.
In Argentina, it was also released for a short period of time, but it has been around for almost a decade.
It began with a few products, such as the Mexico plan, and little by little articles were added. He got to have more than 500.
It has several problems. The most notorious: creates scarcity.
It is that these products are not a business for the companies, since the government imposes a sale price on them (although it is said that they agree), in most cases, it is below the line of expected profits.
This causes companies to produce less, because they are not profitable.
In parallel, as they are cheap in relation to the prices of the products outside the agreement, the products are in high demand, which means that the points of sale quickly run out of stock.
Almost a decade without positive results in Argentina with prices
As we explained, the reference price program continued in the presidency of the right-wing Macri (2015-2019), although its relative importance fell, since it went on to represent 15 percent of the turnover of the affected categories, to 6.9 percent. hundred.
There was also a change in the composition of the basket of products offered, which began to have second marks or “B marks”.
In the first quarter of 2019, a new price agreement was communicated with 15 companies so that 60 items in the basic basket would maintain their prices for six months. Inflation that year was 52%. It didn’t work.
In January 2020, already with the government of the Peronist Alberto Fernández, the Care Prices plan was relaunched with new products and leading brands.
In September of the same year, the program was extended to the construction sector, including almost 100 products from 15 different categories. Inflation in 2020 was 35% and in 2021, more than 52%. It was also unsuccessful.
Now read:
This is Coca-Cola’s simple solution against inflation
They call for a boycott against FEMSA for refusing to participate in AMLO’s anti-inflation plan
Tiktoker cuts power to the Oxxo store as a joke and shows the vulnerability of the stores