Currency crisis, runaway inflation, recession and an IMF deal heads a less than stellar economic year. A landmark vote on abortion fails (for now?), the ‘Chocobar’ doctrine resets the rules of engagement, the ARA San Juan is finally found. A successful G20 summit tops off a stellar year for international diplomacy, as a social awakening brings an end to the year.
Michael Soltys, who first entered the Buenos Aires Herald in 1983, held various editorial posts at the newspaper from 1990 and was the lead writer of the publication’s editorials from 1987 until 2017.
The Buenos Aires Times is now completing the first full year of its existence but its 18th edition 12 months ago already carried a complete annual review of 2017, extending the Buenos Aires Herald’s tradition of chronicling years entirely on the basis of Englishlanguage journalism in Argentina (thanks to using the Herald to cover the first seven months, or the last seven months for that daily of 14 decades already reduced to a weekly, of 2017).
We now offer our second “The Year That Was” with the difference that it is entirely based on the pages of the Times, thus making this annual review also a first.
Summer as the silly season of no news, with everybody taking long holidays on the coast, whether ‘Punta’ or ‘Mardel’, has become a distant memory but there is something of a revival in the early weeks of this year – helped by continued economic growth and a static dollar (a combo encouraging imports with the trade balance already starting to become a worry) although businessmen moan about 28-percent interest rates (if only they knew what was coming). Calm also reigns politically with a fragmented and demoralised opposition still recovering from its midterm frustrations only a couple of months back (while not averse to an idle summer either).
Nonetheless, Labour Minister Jorge Triaca’s days are already numbered when he is exposed by an ex-housekeeper as having made his own personal contribution to the informally employed third of the workforce.
Abroad United States President Donald Trump names Texan circuit judge Edward Prado as his choice for the US Embassy here (with Fernando Oris de Roa almost simultaneously picked to be his opposite number in Washington) while US Secretary of State Rex Tillerson stops by on a somewhat pointless visit just a few weeks before Trump tells him: “You’re fired!” (“Worst Rex I ever had” are the words placed in The Donald’s mouth).
Pope Francis pays an unhappy visit to Chile (but not to his homeland here) where he challenges those accusing a major clergy figure of covering up an abuser to provide evidence, accusing them of slander. The trip marks something of a watershed for the scandal – as the year progresses he finally recognises his missteps and vows to tackle the crisis.
Meanwhile, President Mauricio Macri attends the World Economic Forum in Davos, Switzerland, via Russia and France, beginning a stellar year for Argentina in terms of international diplomacy.
If politics and the economy are not generating major issues, there is always crime: on the first day of the month (the same day public transport fares are hiked), Macri controversially welcomes to Government House the Buenos Aires provincial policeman Luis Chocobar after the latter had gunned down a mugger in La Boca who had just stabbed a US tourist in circumstances leaving it unclear as to whether the constable is a police hero or a trigger-happy cop. By prejudging this case, Macri thus has the Executive branch trespassing into the judicial – fishing for lawand-order votes?
Exactly a week later Macri marks his 59th birthday with 20 green candles on the cake because that day the dollar breaks the psychological 20-peso mark, thus sparking a minor devaluation panic (when today there would be nostalgia for that exchange rate). Food for thought at the Chapadmalal spiritual retreat two weekends later, one might have thought, but no road map emerges – instead the beach huddle is overshadowed by deputy presidential chief-of-staff Valentín Díaz Gilligan’s resignation over his offshore hoard.
In labour news, legally harassed teamster Hugo Moyano heads a protest strong in turnout (around quarter of a million) but weak in impact while the pay dispute with Buenos Aires teachers remains as unresolved as ever as the return to school draws closer.
Norwegian Airlines open a new chapter of low-cost air travel here when its maiden flight from Gatwick lands in Ezeiza.
Finally, two contrasting deaths are in the news – journalist-politician Débora Pérez Volpin from apparent hospital malpractice at just 50 and former Third Army Corps commander Luciano Benjamín Menéndez (with a record 13 life sentences for human rights violations during the 1976-83 military dictatorship) of natural causes at 90.
As in any year, under any government, this month begins with the presidential state-ofthe-nation speech to open Congress.
With gradualism still very much the name of the game and with a bullish view of the economy as expressed by such phrases as “the worst is over” and the curious concept of “invisible growth” (even if unemployment falling from 9.3 to 7.2 percent and poverty from a 2016 peak of 32.2 percent to 25.7 percent might seem visible enough), Macri steers clear of the economy and indeed most of the usual mainstream issues – instead his biggest splash is to anticipate International Women’s Day the following week (when over 300,000 women take to the streets) by launching a debate on abortion. This is accompanied by a variety of other issues usually off the beaten track and crossing party lines – child obesity, paternity leave, national parks, etc. The speech is perhaps more striking for its omissions – little or nothing on fiscal, pension or labour reform, the key relationships with the trade unions or the provinces and even foreign policy being strangely absent for this year’s G20 host. Yet this economic complacency clashes with the February inflation figure of 2.4 percent for the shortest month of the year already threatening the official 2018 inflation target of 15 percent – as from mid-month Federico Sturzenegger’s Central Bank starts selling often hundreds of millions of dollars daily to defend the exchange rate. Not to mention growing signs of a summer drought leading to a disastrous harvest.
Worldwide Argentina looms as the most exposed emerging market after Turkey when the Federal Reserve begins to tighten money while Trump starts to escalate his protectionism with his “heavy metal” tariffs (even if Argentina is temporarily exempted).
Former 1982-3 military president Reynaldo Bignone dies just eight days after Menéndez, also aged 90.
In the last week of the month over 200 relatives of the 1982 war dead could for the first time remember their loved ones at 90 newly identified graves in Darwin Cemetery on the disputed islands.
As summer turns in autumn, various problems only deepen – more weeks of drought make its damage irreversible (to the degree of importing soy from the US), inflation shows little sign of slowing with 2.3 percent posted for March and Buenos Aires province teachers remain on the strike warpath.
Macri attends the 8th Summit of the Americas in Lima (hosted by a caretaker president after the Odebrecht scandal across the region toppled the elected government) but not Trump or most “Bolivarian” leaders (Raúl Castro leaves the Cuban presidency the same month, thus ending almost six decades of that surname at the helm, although continuing to head the Communist Party) – the summit is preceded by what turns out to be a farewell visit by Spanish premier Mariano Rajoy.
The abortion debate begins in Congress – with much less fanfare the government presents a bill to empower shantytown residents by expropriating over 4,000 villas and then distributing the land to the 3.5 million occupants via property deeds.
Peronist politics take a bizarre new twist when Federal Judge María Servini de Cubría ousts Justicialist Party chairman José Luis Gioja (a former San Juan governor), replacing him with controversial trade unionist Luis Barrionuevo.
The Book Fair opens in Palermo in the last week of the month amid protests.
One of the quieter May Days on record in terms of labour protest with many union leaders apparently more worried about Brazil’s Luiz Inácio Lula da Silva going to jail than local grievances. Yet the country still has its most torrid time of the year so far as in the first week of May as the dollar surges through the 20-peso ceiling of the last three months to peak at 23.30 pesos (a perfect storm with a Lebac redemption and a new financial levy coming into effect the same week, both accelerating the dollar stampede) but as the week ends, the Central Bank inches it down a peso at the price of 40 percent interest rates. But neither this nor Treasury Minister Nicolás Dujovne’s announcement of multi-billion public works cuts bringing Argentina closer to zero deficit serve to stop the rot for long.
The second week of the month sees Macri already scurrying to the International Monetary Fund (IMF) in an overreaction which makes the crisis seem worse than it is – most countries turn to the IMF when on the brink of default, not facing a run on the currency with reserves initially topping US$50 billion (many squandered on interventions only swelling a relatively tiny dollar market). But then again, IMF also offers the cheapest credit in a world of rising interest rates.
Cue apocalyptic voices from all sides, not least Domingo Cavallo (economy minister at both the birth and death of convertibility). However, Congress swims against the tide in the opposite direction, passing a bill to roll back all utility bill and transport hikes of the last six months, thus restoring the subsidy mountain (vetoed by Macri on the last day of the month following Senate passage).
In a calmer third week of the month Macri proclaims “the crisis is over” as he awaits the outcome of Washington negotiations with the IMF – Sturzenegger’s Central Bank calls the market’s bluff at an early stage in the week by offering US$5 billion.
The brief respite from crisis does not necessarily make things easier – with the pressure temporarily off, the government is no closer to a road map for an exit strategy. The stability (now at a 25-peso ceiling) continues more or less through the May 25 nationhood public holiday but no sooner is there calm on one front than another acts up – huge protests on the day itself and a wave of strikes both above and below ground from teachers and subway workers among others.
British Foreign Secretary Boris Johnson is among the G20 foreign ministers in town that week (shortly before his exit, just like Tillerson).
The first week of the month sees the IMF and the government reach stand-by loan agreement on a nice round ballpark figure of US$50 billion, roughly doubling the initial expectations – the IMF seems to feel that a G20 host is too big to fail, especially when the region’s great white hope against populism.
Two dramatic news items on the very eve of the supreme distraction of the World Cup in Russia – Sturzenegger is bounced from the Central Bank and replaced by Finance Minister Luis Caputo (whose portfolio is absorbed by Dujovne’s Ministry), while the Lower House approves the abortion bill by a 129-125 vote which had all the makings of an equally narrow defeat until a handful of mostly inland Peronist deputies made a last-minute switch. Handing over the Central Bank to the cousin of Macri’s best friend might not be the best way to convince the world of the independence of monetary policy. In the same month Raúl Alfonsín’s foreign minister Dante Caputo (a very distant relation of Macri’s Caputos) dies at 75.
Macri attends the G7 summit in the small Québec town of Charlevoix wearing his G20 hat. Inflation eases off slightly (a May figure of 2.1 percent). Dutch Queen Máxima’s youngest sister Inés Zorreguieta commits suicide in the World Cup prelude.
In the end the World Cup does not distract the nation for long – a humiliating 3-0 thrashing by Croatia obliges Lionel Messi’s team to play against eventual champions France in the next round and the 4-3 defeat on the last day of the month is a less equal match than the score might suggest.
Nor does the World Cup interrupt Cabinet overhaul – Ministers Juan José Aranguren (Energy) and Francisco Cabrera (Production) are respectively replaced by Javier Iguacel and Dante Sica. Dumping Aranguren is not a good fiscal message with Congress challenging subsidy withdrawals the previous month. The CGT also treats workers to a long weekend via a general strike to start the last week of the month, perhaps with the added motive of having another day off to watch football.
Flag Day comes gift-wrapped with Argentina’s elevation to emerging from frontier market status by MSCI (Morgan Stanley Capital International) – as from this promotion Argentina seems to go sinking without trace ever since. Yet this does save the peso from devaluing to the brink of the 30-peso mark less than two months after bursting through the 20-peso ceiling.
As 2018 reaches its midpoint, nobody catches Macri talking about the “second half” this year.
A nation stunned by recurrent currency crisis and World Cup elimination (national team coach Jorge Sampaoli is unceremoniously and expensively dumped at the end of the tournament) makes a relatively quiet start to the year’s second half – Congress passage of the organ donation law (automatic unless explicitly expressed otherwise) by 202 of the 203 deputies present is almost the only item of note through to the Independence Day public holiday (July 9).
Military coups are mercifully a distant memory but Argentina perhaps comes the closest to mutinies in almost three decades when, in the name of austerity, the Armed Forces are offered a paltry eight percent pay increase (criticised even by the Trotskyist Workers Party) – bumping the offer up to 20 percent eases the unrest after soldiers boycott the traditional Independence Day military parade. Later in the month Macri seeks to restore military selfrespect by giving them a role in domestic security with Decree 683/18, sparking protests by human rights organisations.
After over 30 months in office Buenos Aires province Governor María Eugenia Vidal, the country’s most popular politician, has her first brush with scandal when bogus 2015 and 2017 campaign contributions are exposed.
One of the year’s three main G20 summits – for finance ministers and central bank governors, the other two being September’s trade conclave in Mar del Plata and the recent World Leaders’ Summit – is held with global trade conflicts the dominant theme rather than a strictly fiscal and monetary agenda while IMF Managing Director Christine Lagarde steals the show from all the heavyweight economic and monetary czars.
Partial recovery extends also to inflation with a shocking 3.7 percent posted for June with core inflation even higher at 4.1 percent (Lagarde takes note) – stagflation because negative growth of -5.8 percent is also posted for May. Macri ends the month in South Africa for the BRICS summit.
The month begins explosively with the cuadernos exposé of Kirchnerite kickbacks in the pages of La Nación – a reference to eight notebooks by a former Federal Planning Ministry chauffeur painstakingly chronicling his bribe transfers throughout a decade, thus spelling out in detail what everybody more or less knew. A triumph for the increasingly neglected and underfunded art of investigative journalism.
Although some businessmen start confessing almost immediately to paying bribes during the Kirchner years, Kirchnerism rejects the scandal as a fabrication and “political persecution” but there is no obvious political advantage for Macri because his predecessor Senator Cristina Fernández de Kirchner is the best possible rival for a run-off victory next year. Will this logic prevail to keep CFK free or is she the next Lula, many people start asking? After an initial refusal the Senate drops its objections to a search warrant against her properties but she stays out of jail. The following week former vice-president Amado Boudou is sentenced to a 70-month prison term for graft and malfeasance related to the Ciccone money-printing firm.
Nor does the theory of a distraction from economic woes hold much water because the destructive impact of these scandals on the entire public works sector (not to mention prospects for PPP public private partnerships) is out of all proportion, making the crisis much worse.
Following unexpected passage in the Lower House (a widely forecast narrow defeat turning into a four-vote margin of approval at almost the last minute), there are no surprises in the more conservative Senate (where 66 of the 72 senators represent inland provinces) as the abortion bill founders by a 38-31 vote, despite huge demonstrations – the more traditional Saint Cajetan’s Day march for “bread, peace and work” (featuring both images of Pope Francis and Marxist slogans) drawing some 200,000 people the previous day thus makes the second week of August stand out for big crowds.
Turkey’s entry into crisis despite almost a decade of strong growth raises questions as what it would take for Argentina to end its vulnerability. In its desperation to close the fiscal deficit (while avoiding cuts which would antagonise provincial governors), the Macri administration contradicts its own premises of export-led growth by restoring export duties across the board when Argentine exports are little more than twothirds of their levels at the start of the decade. Not only do Buenos Aires province teachers continue to reject all pay offers, escalating to three-day strikes, but they are now joined by university lecturers nationwide.
On the 20th of the month, María ‘Chicha’ Mariani, 94, the human rights activist and co-founder of the Grandmothers of the Plaza de May, dies of a stroke.
Toward the end of the month the Supreme Court rules the Uber app-based transport service (the target of numerous taxi-driver protests in recent times) to be legal. If the dollar challenged the 20-peso barrier in February and the 30-peso ceiling in May, it moves past 40 pesos (up from 33 to 41 pesos in a single day) as the Central Bank jacks up interest rates to 60 percent, the highest in the world – neither a greater supply of dollars (courtesy of the IMF) nor a higher price serve to tame demand.
Nothing as dramatic here at the start of the month as the stabbing of Brazilian electoral frontrunner Jair Bolsonaro but Macri halves his Cabinet overnight in a new austerity package (including new and “temporary” export duties) while warning the country of a “long and painful” recession – meanwhile newly promoted Economy Minister Dujovne is already busy with new IMF negotiations in Washington (upon his return he is briefly hospitalised with chest pains). August inflation accelerates to 3.9 percent while the White House’s Larry Kudlow urges a return to convertibility (or even total dollarisation like Ecuador) – Argentina is already technically in hyperinflation according to certain accountancy criteria.
The second week sees the first change of Supreme Court helm in over a decade – Carlos Rosenkrantz (the most pro-government of the five justices) replaces Ricardo Lorenzetti after 11 years to become Argentina’s first Jewish chief justice. Two massive protests in the same week bring this city to a halt. Mapuche activist Facundo Jones Huala is extradited to Chile. Senator Fernández de Kirchner is formally accused of having headed an “illegal association” during her 2007-15 presidency.
José Manuel de la Sota, former sentaor and governor of Córdoba dies in a traffic collision aged 68.
The second half of the month sees Macri attending the annual United Nations General Assembly in New York, thus missing a general strike fuelled by a 9.6 percent unemployment figure for mid-2018 – a predictably successful stoppage given a total transport shutdown. His brief 10-minute UN address includes a call for “the Venezuelan dictatorship’s crimes against humanity” to be taken before the International Criminal Court, thus singling out perhaps the only South American country in deeper crisis than his own. Macri’s New York presence coincides with agreement on an enlarged IMF bailout of US$ 57.1 billion and also with a new Central Bank chief with Caputo resigning on the day of his General Assembly address, to be replaced with Guido Sandleris – the latter might look like bad timing but is linked to the former, which includes a money supply freeze until mid-2019 and a managed float for the currency (with the Central Bank selling dollars above 44 pesos and buying below 34). With his protégé Sandleris at the monetary helm, Dujovne is no longer shadowed from the now-defunct Finance Ministry or the Central Bank for the first time. Back home OCA couriers (controlled by Hugo Moyano) is placed under court trusteeship and INDEC statistics bureau reports a poverty figure of 27.3 percent for the first half of 2018.
The abrasive Bolsonaro’s overwhelming Brazilian firstround vote of 46 percent on the first day (confirmed at the other end of the month by a run-off win with 55 percent) tends to overshadow local news in the first week, especially with the latest IMF agreement restoring calm for the time being (and at least one gain from devaluation with the first trade surplus with Brazil in four years). Yet inflation is worse than ever with 6.5 percent posted for September later in the month and core inflation again even higher at 7.6 percent, taking 2018 projections ever closer to 50 percent, while it takes interest rates nigh on 80 percent to keep money tight.
The always unpredictable ruling coalition maverick Elisa Carrió (without Lorenzetti as a target any more) rocks the boat by calling for the impeachment of Justice Minister Germán Garavano for allegedly soft-pedalling cases against Kirchnerite graft, although later backtracking. While less confrontational, Vidal is perhaps firmer in pushing for 19 billion pesos in order to compensate for the 2019 budget’s failure to update the Greater Buenos Aires Fund to inflation (although she has no support from colleagues). An embarrassing U-turn over retroactive gas bill increases in the losing battle to correct relative price disarray adds to government confusion. But Peronist Loyalty Day on October 17, celebrated at half a dozen different major events, shows opposition unity to be even more distant. The B20 and W20 summits for businessmen and women respectively are held.
Hugo Moyano pulls his man Juan Carlos Schmid out of the CGT labour umbrella troika while his son Pablo browbeats his way out of arrest on corruption charges. Cartoon great Hermenegildo ‘Menchi’ Sabat dies at 85. Friend and former Buenos Aires Herald editor Robert Cox pays tribute in these pages, writing that “Sabat’s legacy, for Argentine society and for journalists specifically, is the value of personal integrity.”
De Vido receives a 68-month prison sentence for the 2012 52-death Once rail tragedy.
The success of the Youth Olympics brings a bright note to a grim year – all the glory for athletes born in this century when almost all Argentina’s problems are inherited from the previous century.
Late in the month the Lower House approves the 2019 Budget by a 138-103 vote, despite ferocious anti-IMF demonstrations outside Congress with 27 arrests (the government and the Kirchnerites blame each other for the incidents) – the staunch support of inland Peronist governors (carefully squared in advance with strategic concessions trending the tax burden upward for the first time in three years) ensures a minority government a comfortable margin. Around the same time the IMF board of directors approves the September agreement while inching the sum down to US$ 56.3 billion. The IDEA business symposium in Mar del Plata shows the business world to be far from happy with Macri to the extent of background muttering about replacing him with Vidal as next year’s presidential candidate. The corruption trial of former Kirchnerite tycoon Lázaro Báez begins.
While negative growth for 2018 has looked increasingly inevitable since the first third of the year, the double-digit fall in the September figures for industrial activity shows the slump to be worse than ever. Since galloping inflation is also taking this year’s loss of purchasing-power well into double digits, the Macri administration orders the private sector to pay a bonus of 5,000 pesos to its workers while paying between 3,000 and 6,000 to state employees, thus heading off yet another CGT general strike – the imminent G20 summit makes the government less inclined to wait for Christmas. October inflation of 5.4 percent (hardly better than September) helps workers to feel the pinch. Aerolíneas Argentinas suffers at least four strikes in the month grounding tens of thousands of passengers. Macri reaffirms his intention to run for re-election.
The centenary of Armistice Day ending the First World War in 1918 is marked by a Poppy (and Bleuet) Day service in Chacarita with reconciliation to the fore as a gate is opened in the wall dividing the British and German Cemeteries.
The Senate passes the 2019 budget by a 45-24 margin, almost a two-thirds majority in a chamber where the government commands little more than a third of seats – the highly federal nature of the Upper House (66 of the 72 senators represent inland provinces, as we have seen with the abortion bill) make the understanding reached with most Peronist governors (some of them perhaps calculating that this austerity budget could be political suicide for Macri) even more decisive here. The Peronists muster enough unity in Congress to pick two of the three deputies for the Magistrates Council, an advantage previously enjoyed by the ruling coalition. Labour Secretary Triaca (demoted from minister when the Cabinet was halved in September) announces his exit after the G20 Summit, which is preceded by two minor anarchist bomb attacks.
Just one day after a solemnly marked anniversary of the disappearance of the submarine ARA San Juan, its wreckage is found 600 kilometres east of Comodoro Rivadavia. Its discovery, some 900 metres below sea level, sparks discussion over whether the country has the resources or the technology to raise the vessel from depths.
Hooligans stoning the Boca Juniors bus approaching River Plate stadium frustrate completion of the Libertadores Cup final after a 2-2 draw in the first leg.
On the Tuesday before the summit Techint multinational CEO Paolo Rocca is indicted for having bribed Kirchnerite officials to ease a steel plant’s situation in Venezuela and the Supreme Court finally accepts taxation of the judiciary. On the last day of the month the G20 Leaders Summit begins amid tight security.
December opens with the aforementioned summit (and a special stand-alone edition of the Times on newsstands). With much at stake, President Mauricio Macri manages to pull off a communique and get world leaders (with the notable exception of Trump) to commit themselves again to multilateralism, several bilateral meetings and a series of highprofile one-on-ones with fellow leaders. While international journalists find themselves focused on Saudi Arabia (after the death of a journalist in a Saudi consulate in Turkey), Russia and the US-China trade war, Macri settles in for the ride and enjoys himself hugely (especially the lack of security threats and violence at any protests). As his government secures deeper backing from China, signing more than 30 agreements, it all becomes too for him at the Teatro Colón, with Macri breaking into tears as performers onstage chant ‘Argentina! Argentina!’
Emboldened by the successful summit (and more importantly, a successful security operation), the Security Minsitry moves to loosen the rules of engagement for federal forces, a move which coatlition rebel Carrió denounces as a violation of “fundamental human rights.”
Meanwhile, thousands gather in cities across the country to protest the acquittal of three men for the rape and femicide of 16-year-old teenager Lucía Pérez in Mar del Plata in 2016 (and an outrageously worded ruling), as women’s rights and gender violence returns to national stage. In the same week the 24-year-old son of a Lomas de Zamora prosecutor, Rodrigo Eguillor, finds notoriety with an appalling Instagram video, after being accused of sexual assault.
UNICEF releases a new report, measuring poverty in a multi-dimensional way that finds that 48 percent of Argentina’s children are living in poverty. One week later, a report from UCA finds that more than a third of all Argentines are now living below the poverty line as inflation for the year (minus the last month) rises close to 45 percent. Later in the month, the recessin is officially confirmed and the Supreme Court hands down a ruling that offers relief to thousands of pensioners.
As Congress approves the creation of two huge new oceanic parks, totalling some 101 square kilometres, the cuadernos probe creeps dangerously close to the president, as Mauricio Macri’s brother and father are summoned to testify. A week later, an appeals court shoots down CFK’s attempts to prevent herself being sent to trial for heading a “criminal association” of bribery, kickbacks and illegal campaign payments.
The Copa Libertadores final finally ends (in Madrid) as River see off Boca in a suitably epic clash. Unfortunately for the Millo, they crash out of the Club World Cup soon after.
As the City government outlaws trapitos and windscreen washers, storms slam the capital and the courts hand down an historic ruling against former Ford employees for crimes committed during the last military dictatorship.
As the year draws to a close, economic announcements (disappointing data, transport tariff rises) dominate but one story, above all others, seizes the national agenda: actress Thelma Fardin’s explosive rape allegation against actor Juan Darthés. The impact of the moment cannot be underestimated: as hundreds of thousands rush to show their solidarity with Fardin, sex abuse allegations flood into the public sphere as Argentina’s very own version of the #MeToo movement emerges, with thousands posting four simple words: ‘Mirá como nos ponemos.’
The closing hours of the year may still offer more developments, but for now, that was the year that was.