Tuesday, September 27, 2022

OPINION AND ANALYSIS | 21-09-2019 09:25

Argentina: running out of metaphors

rgentina is the Titanic, to some. To others, Argentina is a cow with not enough milk to feed its calves. Metaphors abound when solutions are scarce.

Metaphors won’t pay your bills. Argentina is in financial trouble and all that commentators can come up with is one metaphor after another in a bid to explain what’s going on. Argentina is the Titanic, to some. To others, Argentina is a cow with not enough milk to feed its calves. Metaphors abound when solutions are scarce.

One individual uttering the flowery talk (author of the cow metaphor) this week was Carlos Melconian, an orthodox economist who left President Mauricio Macri’s administration after quitting as head of the state-run Banco Nación early in 2017. Melconian is groomed, trained and experienced, but he oozes street credibility thanks to his working-class background. The twist is that Melcionian has been for years on good terms with Alberto Fernández, the Peronist frontrunner in the presidential election who defeated Macri convincingly in the August 11 PASO primaries.

There’s a story going round. Melconian, until recently an advisor with access to Macri’s inner circle and the president’s centre-right coalition, is suddenly behaving in public like he could get a top Cabinet job if a Peronist wins the presidency in the first round on October 27. Reports that Fernández had asked Melconian to produce a sweeping “economic plan” fuelled further speculation.

Forget all those metaphors. Here it is happening once more: enter the next economist who will save the nation. Melconian, who has been fiercely critical of Macri’s “gradualist” approach and his decision to do away with capital controls overnight after winning the presidency in 2015, made a series of television appearances and, lo and behold, it sounded like he was not entirely against the idea of becoming the economy minister of an Alberto Fernández administration.

Not only was Melconian filling a vacuum with his learned wisecracks, he was willingly playing the role of the ‘economistas-messiah,’ just when the nation’s anxiety about its economic future is peaking. Pending, after all, is a US$5.4-billion tranche of the International Monetary Fund’s loan. And there’s rife speculation that the IMF will not down the money ahead of the presidential election even though Hernán Lacunza, Macri’s new economy minister, is set to shuttle off on a mission impossible to Washington in an effort to get the money.

There was a further twist too: could Melconian be trying to convince the Frente de Todos frontrunner that what the country needs are orthodox economic policies, like fiscal discipline, labour and pension reform? In other words: could Carlos get Alberto to champion market-friendly recipes? Predictably Fernández is under increasing pressure from the establishment to embrace economic orthodoxy.

Melconian, in the television interviews, ruled out nothing. But the uproar surrounding his sudden high profile inevitably prompted Alberto Fernández to deny that he had commissioned an economic plan from the man, while still underlining that the former Banco Nación head is an authority on fiscal matters.

Metaphors can wait. Melconian can wait. Meanwhile, Argentina’s plight rolls on. Even

Fox News is paying attention, reporting this week that the country’s economy is “haemorrhaging” because a “socialist” candidate (meaning Alberto and his vote-winning running-mate, former president Cristina Fernández de Kirchner) could win the election next month. Fox News blames socialism (just when it is an issue in US domestic politics), but Alberto Fernández blames the president. “Macri is the problem,” he keeps telling the press. Polls show that the Peronist lead in the race is increasing. But then they could be wrong, as we learned quite recently, and even if they are right, Macri has little choice but to carry on regardless. And what of the president himself. This week, he posted a timid “Yes we can” tweet and the next day revealed that what he has in mind is staging 30 “marches” in 30 key locations nationwide, ahead of the election. Macri is relaunching his campaign, and why not? Somewhere deep down inside the president’s campaign team still thinks that an electoral upset is possible – the only problem is that reality seems to have other plans.

Otherwise, the week was dominated by rumours of fuel shortages. The president recently decreed a 90-day freeze on fuel prices as part of a package of measures designed to favour the middle class after the huge defeat last month. Yet the freeze is no more (amid an international crisis for the sector) – the government has allowed a four-percent increase in fuel prices in what looks like a desperate bid to avoid shortages. The backpedalling will hurt Macri’s bid. The president was trying to put out the fire by freezing prices but, when what Macri faced was being left with no petrol at all, in the middle of an economic crisis, the government had no margin to measure the electoral consequence of its decisions.

In some ways, Macri has lost so much that he seems to have nothing left to lose. Prices are put in the freezer and then defrosted. The Central Bank’s monetary policy is getting laxer, contrary to the IMF’s recipes, just when an important payment is pending. This month’s inflation rate will be punishing. Poverty will increase. Unemployment is up.

The president is constantly exposed. Macri was publicly chastised about poverty by a Catholic Church leader during a religious ceremony in Salta. Peronist Senator Miguel Ángel Pichetto, the president’s running-mate, came to his defence, declaring that the local hierarchy is overacting to impress Pope Francis. The president doesn’t need metaphors. He needs an electoral miracle. But there is one bright spot ahead. The last chance of a dramatic shift in the race could be the two looming presidential debates next month.

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Martín Gambarotta

Martín Gambarotta


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