La Rioja, Argentina: A Province’s Desperation and the Birth of a New Currency
The Left-wing governor of La Rioja, a province of Argentina, has found a solution to the province’s financial woes. It’s called "chachos," a new emergency currency used solely in the province.
The name "chacho" in Spanish typically refers to "a little boy," but in Riojas province, it is also the nickname of a local hero. The chacho is a simple solution to the province’s economic crisis, which was caused by decades of budget-busting populism.
The Birth of a New Currency
In August, the La Rioja government approved plans to issue 22.5 billion pesos worth of chachos to help cover up to 30% of public sector salaries. The chachos are issued in denominations ranging from 1,000 to 50,000 and can only be used within the province of La Rioja.
Using Chachos
The chachos can be used to pay for goods and services, as well as to pay taxes and utility bills. The local government promises to exchange chachos for pesos at an equal rate. However, there is a downside to using chachos. They can only be used within La Rioja and only registered businesses can trade chachos for pesos at specific government exchange locations.
History of the Chacho
The chacho is not a new concept in Argentina. In the 19th century, the country experienced a severe financial crisis, and several provinces printed their own parallel currencies. However, in 2001, the government put an end to the chaos by redeeming these currencies for pesos.
The Current Crisis
La Rioja is one of the 23 provinces of Argentina, and it is facing a severe financial crisis. The public payroll accounts for two-thirds of registered workers, and the federal government’s redistributed taxes cover some 90% of the provincial budget. The province’s poverty rate is 66%, and the average income is below $200 per month.
The Idea of Chachos
The idea of chachos was proposed by Governor Ricardo Quintela, an ambitious power broker in the long-dominant Peronist movement. He argued that it was a daring stand against the austerity measures imposed by the central government. However, others see it as a repeat of the same old habits of overspending.
Conclusion
The chacho is a desperate attempt to address La Rioja’s financial crisis, but it is not a sustainable solution. The province’s poverty rate is among the highest in the country, and the average income is low. The chacho is a stopgap measure that will not address the underlying issues.
FAQs
Q: What is the chacho?
A: The chacho is a new emergency currency used solely in La Rioja, a province of Argentina.
Q: What is the value of the chacho?
A: The value of the chacho is equal to the Argentine peso, and it can be exchanged for pesos at an equal rate.
Q: Can I use the chacho outside of La Rioja?
A: No, the chacho can only be used within La Rioja and only registered businesses can trade chachos for pesos at specific government exchange locations.
Q: Is the chacho a new concept in Argentina?
A: No, the concept of parallel currencies has been used in the past in Argentina, but it is not a new concept.