Riding a roller coaster

In this part of the world, people are used to big booms followed by even bigger busts, chronic high inflation punctuated by bouts of hyperinflation, and exchange rates that are almost always out of sync. Most take this for granted. Though things seem to have quietened down a bit recently, everyone knows that at any moment the economy could spring a surprise on even the most seasoned observer of its antics.

Barely a month ago, investors seemed to be getting increasingly bullish about Argentina’s economic prospects. Her country risk rating, which as well as reflecting their feelings influences them, was expected to continue falling until it reached the same level as that of her more trustworthy neighbours, but then, to the chagrin of Javier Milei and Luis Caputo, the people estimating it  suddenly started making it go up again. Many attributed this to what was happening in the rest of the world, what with new wars breaking out in oil-producing regions, the US public debt growing at an alarming pace to top US$40 trillion and huge sums of money getting pumped into the Artificial Intelligence business which some fear could turn out to be a colossal bubble or, what would be worse, a gigantic bomb. In a world buffeted by financial storms, weak countries like Argentina are liable to get boycotted by investors who are unwilling to take big risks. However, internal events are also having an effect.

Both here and abroad, people still want to get a persuasive answer to a very difficult question they has long troubled them: can Argentina change from being just about the only country on the planet that managed to go from riches to rags without getting involved in a major war, suffering a leftist revolution or being hit by an appalling natural disaster, into a socioeconomic success story in a highly competitive world? In theory, she should find this relatively easy. After all, the delayed exploitation of valuable natural resources such as gas, petrol and mineral deposits that had been neglected for decades, is already providing her with enviable amounts of money; within a couple of years, they should generate more than enough hard cash to fund social programmes designed to speed up the transition that is underway.

Nonetheless, despite such advantages, many difficulties lie ahead. The biggest is cultural, in the anthropological sense of the word.  A population that is accustomed to a certain way of doing things cannot start thinking and behaving in a different manner overnight.  For most Argentines, a version of what is now seen as Peronist corporatism – which has deep roots reaching back to beyond the colonial era – is part of the natural order of things and is defended instinctively not just by politicians and trade union bosses who prospered mightily under it but also by the Roman Catholic hierarchy, progressive intellectuals and many others.

For all these, liberal capitalism is an inhuman and therefore immoral heresy that must be fought against. Even though a succession of governments led by individuals who said they were inspired by assumptions that met the approval of the anti-capitalist elites only managed to impoverish huge numbers of families, many attribute this to their notoriously corrupt behaviour and the crass incompetence that inevitably accompanied it, not to the principles that they and large swathes of the population cleaved to.   

Milei – whose personal style is wildly populist, even though he swears by Austrian thinkers such as Friedrich August von Hayek who were of a rather aristocratic disposition – has made defeating the ideology underpinning corporatism one of his main objectives, but though attacking the political “caste” shaped by it helped him win the 2023 presidential elections, it soon became clear that both he and the people surrounding him shared far too many of the characteristics of the cliques they said they wanted to send packing. As they should have foreseen, the similarity between their own behaviour and that of their adversaries has done much to discredit them, but it does appear that a majority, or at least a large majority, of Argentines have come to the conclusion that trying to restore the order that was falling apart when Alberto Fernández, Cristina Fernández de Kirchner and Sergio Massa were calling the shots would be a very serious mistake. They may not feel enthusiastic about the economic prospects opened up by Milei, but that does not mean that most would like to go back to the recent past.

Perhaps Milei, along with his sister, his dogs, his chainsaw, his foul language, his budding friendship with Donald Trump and members of his entourage and his many eccentricities, was what the country needed three years ago and, sensing this, the electorate preferred him over Patricia Bullrich and Massa. However, this does not mean that Milei will be the best person to steer the country through the years that lie ahead. His peculiar talents proved useful when it came to begin hacking away at the obese and extraordinarily corrupt establishment that dominated the country before he was elected to office – and which, were the economy to cave in, could easily reassemble itself – but we could now be entering a phase in which consolidating the far from finished new model will require a government based on a much wider selection of individuals than is the current one, in which a few evidently capable men and women are surrounded by opportunistic schemers who want a share in the spoils that political power always makes available.

Unless another outsider, as Milei himself was before the election campaign he won got into high gear, suddenly appears on the scene, those worried by the distinct possibility that his often atrocious behaviour could lead to his defeat in next year’s elections will have to do with what is already available. This being the case, the many who are convinced that unless Argentina succeeds in becoming a genuinely capitalistic country her future will hardly bear thinking about, will probably rally behind Patricia Bullrich, Hernán Lacunza or Mauricio Macri, all of whom would, in their view, provide a safe pair of hands. Of the three, Bullrich, who has been drifting away from the Milei siblings by voicing her disapproval of matters they would rather overlook, is currently the favourite.