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OP-ED | 13-02-2021 10:36

Dilemmas and defining factors

Two entirely different news items at opposite ends of the past week might well be the shape of defining factors in this year’s elections.

Two entirely different news items at opposite ends of the past week might well be the shape of defining factors in this year’s elections. It began with the femicide of Ursula Bahillo in Rojas, plunging her hometown of Rojas into an uproar, while on Thursday the INDEC national statistics bureau announced the first monthly inflation figure of 2021 as four percent – at all odds with the 29 percent annual inflation budget forecast as predefined by Economy Minister Martín Guzmán, which was the benchmark of this week’s sectorial talks.

Femicides are deplorably all too common (indeed last month a more than daily occurrence with a total of 37) and thus would normally qualify for editorial comment less often than they should. But the multiple stabbing of this teenager stands out as different because of its context.

Firstly, in this case the killer was an officer of the law – a Buenos Aires provincial policeman at precisely a time when his force is seething with unrest and on the brink of renewing last September’s pay protest, a menace which the controversial Buenos Aires Province Security Sergio Berni moved to head off by bouncing hundreds of participants in last year’s virtual mutiny.

Perhaps more importantly, this brutal murder returns crime to the political agenda, giving many people the impression of a failed state which cannot protect its citizens. Again the context of this femicide is special – it comes in the same week when Kirchnerite senators have activated clauses in the 2014 Criminal Code reform which maximise the presumption of innocence and the revision of cases to a degree which virtually eliminates the finality of any sentence. The legal system showed a deplorable laxity in not safeguarding Ursula from her killer and reform is clearly imperative but this is not helped by a government with many supporters (not including Berni) who can be considered soft on crime and which seeks to weaken the Judiciary at every turn. The government’s intentions here are clearly to benefit officials of previous administrations suspected of corruption rather than open the way to vicious killers but – “lawfare” or no “lawfare” – this is not such a noble cause as to justify such atrocious femicides in the eyes of much of the electorate.

The January inflation figure poses for the government various dilemmas whereby any outcome solves one problem and creates another. The Frente de Todos ruling coalition has already decided logically enough that austerity is a no-go strategy (as reiterated by Guzmán this week) in an electoral year, ruling out, for example, any major utility billing increases and thus adding more subsidies to the fiscal deficit, but the only other alternative for financing that deficit is inflation, which creates new problems – this aversion to spending cuts makes the optimistic budget inflation figure of 29 percent more contradictory.

That 29 percent benchmark also paints the government into a corner with the prime Peronist electoral base of organised labour. The idea is to grant workers wage increases a few percent above the magic figure so that real wages can regain some ground for the first time in three years. Everything depends on the 29 percent so challenged by last month’s inflation figure standing firm – if not and if the independent forecasts of some 50 percent are vindicated, will workers with their 32-33 percent hikes be asked to soak up more real wage punishment in an election year or will a new wage-price race start with every risk of an inflationary spiral? The latter would seem to be the government’s Plan B, given that it has ruled out any collective bargaining caps, but an anti-inflation strategy of price controls without wage restraints has indifferent chances of success.

The government began this year trusting in at least three cards to make up a winning hand – mass vaccination to vanquish the Covid-19 pandemic, positive growth rates for the first time since 2017 and an agreement with an obliging International Monetary Fund (IMF) to stabilise the financial markets, to which commodity price pick-up has since been added. Now the vaccination campaign is faltering, the IMF talks are stalled as populist allergies clash with policy needs and even the economic rebound is making an uncertain start, not helped by that January inflation figure. But do not rule out the ability of random factors like the death of a humble girl in a small provincial town of 18,000 people to complicate the electoral scenario yet further.

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