The suspension of the construction of the third Argentine satellite Arsat III damaged the State in $38 million since it left with the obligation to face payments of pending contracts in dollars and euros. Irregularities are reported, such as direct hiring and benefits to related companies. Many provinces left without the expected connectivity.
Telecom Argentina accelerated its digital transformation plan with the implementation of several programs that involve both the company's operation and the necessary experience of its 29 million customers. To date, the company has invested 515 million dollars in technological platforms: Cloudification, Big Data, and open digital architecture are the enablers of this transformation.
The provinces are preparing to give up their participation in the distribution of resources with Nación: they will go from receiving 49.6% in 2019 to 48.3% in 2020 (1.3% less) and 47.3% (2.3% less) in 2021. The provinces will lose more than 200,000 million pesos ($2.6 bn) due to the lack of co-participation of the PAIS tax to the dollar. Since this tax was created, the resigned amount will accumulate until the end of next year 306,809 million pesos ($4.05 bn). The one that lost the most was Buenos Aires, with 64.075 million pesos ($845.4 mn) less.
In the last fiscal year closed in June for the wine industry, the total turnover was 18% lower than in 2015 and had similar levels to those of more than a decade ago (2007 and 2008). Forecasts agree that recovery to pre-pandemic levels will take between 18 and 24 months. There is a drop in the industry's profitability and the average investment of the sector in the last five years was 4.9% of the turnover, which is not even at the maintenance level. Grape prices are 30/40% below their equilibrium price, leading to the eradication of vineyards, which totalled 7,500 hectares in recent years. We are going to an industry of no more than 170 to 180,000 hectares of the current 200,000 and more concentrated.
With no income and with the planes on the ground, the expense account of this conglomerate of five state-owned companies with 12,000 employees is an enigma: their managers assure that they still do not have a concrete dimension of how much their losses will be during this year, although they are sure that they will be more than 700 million dollars. In 12 years, the accumulated loss is $7.3 billion.
The first eight months of 2020 result in an 11.8% drop in exports, and a more pronounced 23.8% reduction in imports, only primary products had a positive variation of 10.2%, in a context of extreme scarcity of foreign currency. Exports reached $4.94 billion and imports $3.5 billion. The commercial exchange (exports plus imports) decreased by 15.3% concerning the same period of the previous year. A surplus of $1.44 billion is not good news in this context of the economy in a deep recession. If it grows again, that surplus will reduce rapidly. The bad news added to the data of the fall of the GDP and employment in Argentina.
The costs of industrial inputs grew between 10% and 50% in dollars, according to the different sectors, affected by the drop in supply and by the coverage against devaluation pressures. A report by the Argentine Industrial Pymes group (IPA) indicates that the most affected products are plastics and steel used by manufacturers of household appliances and materials for the automotive industry. The deterioration of the purchasing power of customers caused by the exchange rate instability is of concern because it ends up affecting demand.
According to INDEC, half of the people employed in Q2 2020, received a monthly amount of up to 27,000 pesos ($355), while the average income of those occupied was 31,868 pesos ($420). Statistics show that the labour income obtained by the population increased nominally by 15% concerning the second quarter of 2019; below inflation, with a drop of almost 20% in real terms. It anticipates a sharp increase in poverty and indigence levels. Also, social income inequality has widened.
Due to the fall in the population's income, especially those with fewer resources, poverty will reach 46% of the urban population in the second quarter of the year. This figure projects to the entire country, including the rural community, which is 20.8 million people who lived with incomes below the poverty line.
Argentina's biodiesel cluster, which generated exports of more than $1.2 billion in 2017, faces the last quarter of the year with a worrying projection: it estimates that it will produce 1.4 million tons in 2020, the lowest figure in ten years, affected by the fall in exports due to the pandemic and the freezing of the formula to update the price of biofuel in the domestic market. The situation has complicated SMEs and large companies; the domestic market shows a fall of 33% and exports a fall of 36% compared to 2019.