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OP-ED | 09-01-2021 08:04

A freezing summer

The government’s actions speak louder than his words – the elections above all else.

When the arrival of coronavirus and the application of lockdown forced President Alberto Fernández into a total rewrite of the 2020 road map, which he had laid down only three weeks previously in his state-of-the-nation address to Congress last March, he faced the same cruel choice as all his colleagues worldwide between sacrificing the lives of many and the economic health of an entire nation. But this 2020 dilemma did not include the factor of elections (save for the odd mayoral vote). Last year President Fernández defined his choice thus: “If the dilemma is the economy or life, I choose life … the economy can bounce back but not the dead,” but now that he faces a trilemma including elections, he is far less forthcoming about spelling out his priorities yet the government’s actions speak louder than his words – the elections above all else.

In the last month or so both sides of this dilemma have been increasingly viewed through an electoral prism and subordinated to the needs of the campaign, which has even displaced judicial reform as the top government priority. If lockdown was unquestioned last March with three dead and 134 confirmed cases of coronavirus, it has now ceased to be an absolute with going on 45,000 dead and some 1.7 million cases as some summer holiday scenes demonstrate only too clearly. Yet if the economy has been granted more freedom from lockdown, it remains far from unfettered because it must now submit its pricing to the political dictates of a populist government. If quarantine dominated the political landscape last year, an economic policy-making left much to its own devices made debt negotiations its focus with Economy Minister Martín Guzmán amiably trying to arrive at a common definition of “sustainability” with the International Monetary Fund. Yet now sustainability – very much Guzmán’s 2020 watchword – is not even mentioned as politics invades economics and electioneering drives a coach and horses through the structural reforms floated to justify debt rollover.

This process can be said to have begun as early as last August with the decree declaring telecommunications a public service, peaking (for now) at the end of the year with the suspension of maize imports so antagonising farmers. In between, a utility billing freeze has been extended but the iconic illustration of shifting tides must surely be Health Ministry Resolution 2987 reluctantly granting prepaid health schemes a seven-percent increase to meet their steeply mounting pandemic costs, only to be almost immediately nixed the same day by Resolution 2988 for no other reason than “express presidential decision.” All these moves have the common denominator of smothering prices (especially regulated prices where the government enjoys the most control) – this philosophy condemns businesses to earning in pesos subject to the ravages of inflation and within the limits defined by electoral criteria while meeting many costs in dollars as well as paying out wage increases and taxes.

All this is clear enough but what remains to be clarified is whether a high level of ambition lurks beyond curbing inflation to keep the electorate onside. The words of Vice-President Cristina Fernández de Kirchner in La Plata shortly before Christmas – “We have to move towards an integrated national health system between the public and private sectors and the union-run healthcare schemes (obras sociales) to optimise resources. The pandemic has given us the opportunity to redesign the health system in record time” – seem to point clearly enough to an aspiration towards echoing Britain’s post-war creation of the National Health Service in Argentina. On paper this would certainly be an improvement on the current ramshackle health system with all its wasteful overlaps but this would also represent a state annexation of over 10 percent of the economy (health spending accounts for 9.4 percent of the Gross Domestic Product according to pre-pandemic measurements) – given the overwhelming priority now being given to electioneering, can we entirely rule out the temptations of converting such a national health scheme into a gigantic slush fund?

Yet it is not enough to point to the dangers of such a health juggernaut or to criticise a regime of frozen prices and runaway costs imposed for electoral purposes – anybody who does not see all this as the path to a viable future also needs to provide constructive alternatives.

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