Argentina
on strike in protest at the government’s intervention in their work and the replacement of senior INDEC officials with less qualified personnel.22 In July 2007 eight INDEC employees who worked on inflation statistics presented a letter stating that the new methods and procedures for collecting data and calculating inflation were arbitrary and inconsistent. The results, they said, did not reflect reality.23 News sources later stated that at least fourteen INDEC employees had been reassigned from the statistics office to the Economy Ministry following their testimony against the government’s manipulation of INDEC data.24
underestimating cost-of-living indicators, governments can manage to keep official poverty rates down. In mid-May 2008 INDEC announced that the incidence of poverty had decreased to 20.6 per cent, down almost three percentage points from early 2007.28 This figure clashed with other estimates drawn from universities, private consultancies and social organisations, which found that poverty levels approached 30 per cent during the same period.29 Deflated inflation rates also have the effect of lowering Argentina’s US$129 billion debt,30 some 40 per cent of which is made up of bonds that are linked to the inflation rate.31
Despite suggestions that Fernández de Kirchner’s government would work to restore public trust in INDEC by removing controversial officials,25 the opposite proved true. Shortly after President Fernández de Kirchner took office, the Greater Buenos Aires consumer price index, considered to be a reliable gauge of inflation, was officially deemed to have risen by 8.5 per cent in 2007. Frustrated INDEC employees contested these findings, estimating instead that inflation actually stood at over 20 per cent for that year.26 Half a year into Fernández de Kirchner’s term, such disparities between official and independent estimates remained. In May 2008 analysts estimated that the real rate of inflation was at least two or three times the official rate.27
While critics stop short of suggesting that manipulation of the inflation rate is illegal, the behaviour nevertheless raises serious doubts among Argentinians and international observers. In early 2008 the International Monetary Fund (IMF) sent a letter to INDEC requesting an explanation of its methodology.32 Later that year the IMF included INDEC’s statistics in its October 2008 World Economic Outlook report only after making clear that analysts doubted the official rate.33 The World Bank likewise suggested that the INDEC figures were problematic and pushed the government to restore public confidence in the statistics institute.34 The reluctance of the Fernández de Kirchner administration to come clean on its statistical methods may also be contributing to the president’s plummeting approval ratings. In May 2008 positive opinions of Fernández de Kirchner fell to 26 per cent,
The unrealistic alteration of official inflation figures carries far-reaching consequences. By 22 23 24 25 26 27 28 29 30 31 32 33 34
La Nación (Argentina), 13 June 2007; 24 August 2007. La Nación (Argentina), 5 July 2007. Dow Jones International News (US), 30 January 2008; Bolsonweb.com (Argentina), 5 December 2007. Economist Intelligence Unit (UK), 15 October 2007. Dow Jones International News (US), 30 January 2008. Latin American Economic and Business Report (UK), 29 May 2008; El País (Spain), 23 May 2008. Agencia EFE (Spain), 22 May 2008. El País (Spain), 23 May 2008; Agencia EFE (Spain), 22 May 2008. Soitu.es (Spain), 20 September 2008. Reuters (UK), 18 September 2008. Dow Jones International News (US), 10 April 2008. Reuters (UK), 18 September 2008; IMF, World Economic Outlook (Washington, DC: IMF, 2008). Clarín (Argentina), 27 September 2008.
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