The government of Argentina says that its inflation rate is standing at just under 11 percent, but critics and private research firms have that figure pegged at 28 percent. According to indexes published by these groups, prices rose 28.4 percent in the Latin American country last year, a number that has Argentines running scared from the peso and turning to tangible assets.
Argentina President Cristina Fernández de Kirchner believed the best way to remedy its inflationary crisis was to impose price, wage and import controls. This has failed the country on many levels, especially considering that the measures were only supposed to last for only two months.
Shortages have been reported for an array of products and in all sorts of markets: salmon, prescription drugs, bananas, electrical equipment and machinery parts are just some of the items unavailable in the marketplace. One of the latest shortages is tomatoes in supermarkets as was highlighted in the Wall Street Journal early last month.
Due to the shortages of tomatoes, Economy Minister Axel Kicillof might authorize tomato imports. Government officials also say that it might permit companies to import some goods to ensure price-controlled products are stocked and available.
“If it’s necessary to import certain goods due to seasonal shortages or because the price doesn’t conform to the agreed price then the corresponding imports will be opened,” said Jorge Capitanich, the president’s cabinet chief.
In the meantime, numerous Argentines are upset that McDonald’s has run out of ketchup. A phalanx of the fast-food chain’s customers has turned to social media to vent their displeasure in the paucity of ketchup. One report claimed that there is no ketchup because they’re stuck at customs.
The company confirmed the shortage on Twitter and noted that “we’re bringing in other sauces to replace it while we try to fix the problem.”
Similar policies have been implemented elsewhere in recent times. Venezuela, for instance, has instituted price controls and production quotas, which has led to shortages of corn starch, rice, toilet paper and a wide variety of other products.
When will governments realize that they can’t micromanage the economy? When will governments realize price, wage and import controls never work? When will governments realize they do more harm than good? It’s likely never.