Buenos Aires (Argentina), Oct 17 (AP) – The once bustling factory floor is now eerily quiet.
Luciano Galfione, walking through his textile mill in southern Buenos Aires, showcased the state-of-the-art machinery that used to operate loudly as 200 employees produced fabrics for Argentina's large middle class. On a recent afternoon, however, the Galfione Group factory was running with just a few workers handling yarn and dyeing cloth.
Nearly two years after libertarian President Javier Milei vowed to revive Argentina's beleaguered economy with severe austerity and free-market policies, businesses like Galfione's are struggling. Orders have dwindled and competition has intensified, forcing him to cut operations by 80%, lay off half his staff, and dip into personal savings to keep the 78-year-old family firm afloat.
Other businesses have simply closed down. In the past year and a half, over 17,600 companies, including 1,800 manufacturers and 380 in the textile sector, have shut their doors, as reported by Fundacion Pro Tejer, an organization representing textile manufacturers.
"The industry is in crisis, on the brink of bankruptcy," Galfione, who leads Fundacion Pro Tejer, said. "Textiles are just the first to fall, but it's not limited to them."
As Argentina approaches the October 26 midterm elections — perceived by many as a referendum on Milei's policies — Galfione's struggles mirror the larger problems facing the nation. The economy is faltering, cheap imports are undermining manufacturing, and spending has been hit hard by rising unemployment and declining wages.
Trump Offers Support Amid Argentine Suffering
The upheaval in Argentina's financial markets began after voters in the manufacturing regions around Buenos Aires, long viewed as the hub of protected national industry, expressed their discontent with Milei's leadership in a recent provincial election. The result led to a drastic peso devaluation and urgent efforts to secure $20 billion in aid from the Trump administration in the United States.
In a move that surprised both Argentines and Americans, President Donald Trump declared that the aid package was conditional on Milei's success in the upcoming legislative elections. Treasury Secretary Scott Bessent suggested additional investment funds could provide up to $40 billion to Argentina.
"Just supporting a great philosophy to succeed in a great country," Trump remarked following a meeting with Milei at the White House. However, many Argentines are growing frustrated with this ideology.
On the streets of Buenos Aires, residents expressed skepticism about international aid solving their issues. Walter Willatt, a 56-year-old newsstand owner whose son was recently laid off from a local Toyota dealership, questioned the practical impact of foreign aid. "If the economy revives, it will have to be through domestic consumption."
Milei's Reversal of Fortune
A year ago, Milei's policies were praised for reducing the previously rampant inflation. However, with inflation now under control, other economic challenges have surfaced.
Unemployment in Buenos Aires Province surged to 9.8% in the second quarter, up from 7.3% the previous year before Milei took office. Despite price stability, wages have not kept pace with inflation, and cuts to subsidies have led to increased costs for transportation, utilities, and healthcare.
"The public now assumes inflation is under control, but the economy needs growth and job creation," stated Marcelo J. García of the Horizon Engage consultancy. "I'm unsure if the government can meet these new demands."
Rodolfo Nunez, a former factory worker, described voting for Milei in 2023 with hopes of change, but faced personal economic hardship instead. His daughter's epilepsy medication became unaffordable, his retired parents struggled on a $300 pension, and he lost his job at a ceramic plant that cited the economic crisis for its closure.
Consumer Confidence in Decline
Government statistics reveal significant cutbacks in household spending, with clothing sales down 10.9% year-on-year. Alejandro Schvartz, owner of appliance company Visuar, reported a 25% drop in sales and is striving to survive with minimal production.
Policies designed to fight inflation, such as high interest rates and central bank actions to bolster the peso, have weakened the competitiveness of Argentine industries. The strong peso has encouraged consumers to spend abroad instead of domestically.
Increased Competition
Milei's removal of trade barriers has led to a surge in inexpensive imports, particularly from Chinese e-commerce giants like Temu and Shein, which avoid import duties on specific products. Meanwhile, high taxes remain for local manufacturers, resulting in higher consumer costs.
"This isn't a level playing field," noted Pablo Yeramian of Argentine textile company Norfabril, who has reduced his workforce by 20%.
Watching Milei's meeting with Trump, some Argentine manufacturers wished the similarities between their leaders extended to their industrial policies. Galfione commented on Trump's "Made in America" initiative, suggesting Argentina should emulate the U.S.'s actions rather than its advice. (AP) SKS SKS
(Only the headline of this report may have been reworked by Editorji; the rest of the content is auto-generated from a syndicated feed.)
