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OP-ED | 29-08-2020 09:31

Method in the madness?

One of the oldest tricks in the book in Argentina is to sneak through some controversial or predatory decree on the brink of the weekend. Let us take a closer look at that telecommunications decree.

In the hope that it will be forgotten by Monday. This rarely works entirely but the abrupt rebranding of telecommunications as a public service in the last hours of the third week of August – with implications far too momentous to be perceived over the next few days – could be the exception which proves the rule. And not just because weekends have become somewhat relative in this pandemic. That pandemic alone justifiably draws away attention with this week’s horrendous and increasingly nationwide data of daily cases of coronavirus contagion entering into five digits, while the death toll now topping 8,000 already overtook last year’s road accident fatalities (totalling 6,627) last weekend. Further (and less justifiable) distractions were the future of football superstar Lionel Messi and the curious spectacle of the government’s judicial reform clearing the Senate despite being disowned by its main driving force who also dominates that chamber.

But this judicial reform is a non-starter going nowhere fast (or slowly) while the international experience of this pandemic year is showing state action to be crucial but also increasingly irrelevant – strict quarantines become unenforceable while when controls are too lax, much of the general public shows more responsibility than its leaders. So let us take a closer look at that telecommunications decree.

This move has points in common with the Vicentin soy-crusher expropriation bid earlier this year but the target has an altogether different dimension this time. We are talking about nothing less than the defining sector of this century, the creator of a bigger and better but also uglier world. Uglier because of a growing inequality often described as “the rich getting richer and the poor poorer,” although the first half of that cliché is the main basis of that inequality – the obscene fortunes accruing to those driving the technological revolution. To imagine that this global sector fuelled by multi-billion private risk investments requiring constant renewal can be neatly pigeonholed into a public service by an overnight presidential decree seems to carry hubris to its rashest extremes. Wonderful if the government can pull it off and tame the monster with populist pricing perhaps, but to express the problem briefly in down-to-earth terms, the sector is being asked to invest in dollars and collect in pesos as defined by a Kirchnerite government.

The implications are impossible to calculate at this stage but we can already analyse the motives for this bold move. Is this yet another example of short-term populism oblivious of the broader impact or is there method in the madness?

In favour of the former interpretation, perhaps the immediate objective of freezing mobile telephone, Internet and cable television charges for the rest of this year should be taken at face value with the tail wagging the dog – given the increases imminent in these services (which are more vital than ever in the pandemic) and the threat posed to the inflation data by a bloated money supply, did the government simply declare telecommunications a public service as a necessary companion of a freeze without thinking through the implications any further? Some analysts, especially conspiracy theorists, reduce this initiative to a renewal of Kirchnerism’s old conflict with the Clarín Group (an important local participant within the sector) and it is entirely possible that the Frente de Todos government has picked this battleground.

Yet this move could also respond to a more ambitious, longer-term strategy and nor would this be simply greed – the urge to annex a cash cow implicit in the bid to grab Vicentin as a state wedge within the lucrative grain export sector. If there is ambition, its level would remain to be seen – would it be simply control without responsibility as in gas and electricity (owned by regulated private utilities) or is the aspiration to a more complete state monopoly like Aerolíneas Argentinas or YPF oil?

But the government might also be going ahead while fully aware of the risks for two possible motives. One would be deliberate sabotage of a globalised future out of nationalist protectionism to preserve the labour-intensive import substitution industries of almost a century in the spirit of “Stop the world, I want to off.” And the other would be that they can kiss goodbye to future investment in digital revolution because something is cooking with China to cover all needs. All puzzling but not to be ignored.

 

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