Wednesday, June 12, 2024

OP-ED | 15-08-2020 11:10

A crisis of diagnosis

Opposition to judicial reform is not enough – it must be accompanied by calls for state reform.

If our editorial of a fortnight ago was aghast over the government presenting judicial reform as its top priority, at the peak of the coronavirus pandemic amid economic meltdown, the days since have seen this irrelevant issue being given comparable importance by the opposition, thus compounding the original sin. Not that there's anything wrong with resisting a judicial reform which is already being rejected by various levels of the Judiciary (even if the suspicion remains that this conservative profession would also repudiate far worthier changes). But just as numerous analysts have stressed that this month’s debt settlement is a necessary but not sufficient condition for reviving the economy, so resistance to judicial reform is equally a necessary but not sufficient condition since the duty of any opposition also includes offering a constructive alternative.

The alarmism over judicial reform may well be overblown. Not only should the government rule out any support from the opposition or the Judiciary but this autistic impunity drive is also a hard sell for the general public as a whole and even for many of its own loyalists who are going to have problems understanding this priority (and not just because of pandemic and economic crisis because this week’s postponement of the legalisation of abortion will leave the numerous militant feminists in government ranks dismayed that their cause is considered less urgent than court restructuring). Any institutional reform without consensus is historically a non-starter in Argentina.

So no real reason to follow blindly the agenda set by the government, bringing us back to the constructive alternatives. Before presenting any itself, the opposition is demanding one from President Alberto Fernández – his disbelief in economic plans confessed to the Financial Times has triggered pressures that he define a strategy. Yet this is easier said than done. Can any plan seriously be expected in today’s chaotic world of the pandemic accelerating technological changes which already predated it, or in a country which in living memory has been unable even to draft a budget not written in sand and where “plan” was made a bad word by the former Federal Planning Ministry at the epicentre of many corruption trials? Not that Stalinist five-year plans did the trick even in their own century but they would be simply inconceivable today when in five years’ time half the jobs and half of today’s issues stand to be completely different.

In this sense the presidential disbelief is justified but not playing the ostrich in the face of the harshest economic crisis in Argentine history with the worst yet to come. The July inflation figure of 1.9 percent (half a percentage point below most expectations) prompted relief among some and scepticism among others but in truth neither the relief nor the disbelief is justified. Why? Because even 1.9 percent is far too high given the depth of the recession (even allowing for the absence of the winter holiday factor usually pumping up July inflation). Nor is there even the grim consolation of inflation being kept at bay by recession because only quarantine is delaying the impact of the three trillion pesos being printed this year – the problem here is not the volume (the United States is churning out money at almost twice the speed) but the velocity of circulation, which will be terrifying to behold once lockdown ends.

With the fallacies of populism plain to see after eight months in government, many experts are recycling their analyses of Argentine decline over the last three-quarters of a century and presenting their nostrums of fiscal solvency, a credible currency, market incentives to recover foreign investment, etc. Valid enough but all that might be history rather than the world of the future. Recovery in these terms might be viable or Argentina might finally run into a crisis which is anything but asymptomatic, redefining its future (something akin to the 14-plus percent plunge in Chile’s Gross Domestic Product in 1982, transforming that neighbour for the next four decades) but it is at least possible that the state will bulk larger everywhere in the post-pandemic world. Rather than pinning all hopes on the market, the opposition should have a Plan B for that possibility. This would take the form of proposing that if more state control must be accepted as inevitable, it cannot possibly come from the current bloated and rusty state machinery. In a word, opposition to judicial reform is not enough – it must be accompanied by calls for state reform.   


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