Who will survive the economic crisis in Argentina?

As President Alberto Fernández of Argentina ramps up restrictions to contain coronavirus transmission during a brutal wave of infections, many of the businesses that barely managed to stay afloat since the 2018 economic crisis face renewed risk. There is a legitimate fear that countless bars, restaurants, gyms, and shopping malls in capital Buenos Aires may go under, joining the already long list of bankruptcies and downsizings.

Overall, 20,000 Argentinian businesses shut up shop last year, according to consultancy firm Ecolatina. This represented some 4 percent of all firms in the country, with the rate jumping to 5 percent among non-essential sectors.

Argentina’s tightest coronavirus restrictions came at the beginning of the pandemic, leaving commerce closed from mid-March to late August. The country’s GDP slide was the region’s second-largest, surpassed only by Peru’s.

As was the case in much of the world, pandemic consumption was kept alive by state-sponsored cash transfer programs. However — due to budget limitations — this form of aid was much smaller in Argentina. With high taxes, no savings for counter-cyclical measures, and fear of printing too much money in an economy already plagued by high inflation, Economy Minister Martín Guzmán kept the purse strings as tight as possible.

The state covered a tiny portion of payrolls for businesses forced to close for months on end, while the government’s emergency aid scheme issued modest payments, suffered from successive...