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OPINION AND ANALYSIS | 09-07-2022 07:30

Drifting towards a black hole

Hyperinflation looms; Argentina is flat broke, but the people who wield most political power think the only way to solve problems is to throw freshly-printed money at them.

Some countries do not really need a full-fledged government. Between May 2018 and October 2020, Belgium did well enough without one; the bureaucracy went about its business as usual and stability seemed to be guaranteed by membership of the European Union. But Argentina does not boast many competent bureaucrats and cannot be propped up by her neighbours. She cannot muddle through unless she has a government that can stop the economy and much else from unravelling by withstanding pressures from greedy interest groups.

Right now, the country is falling apart because President Alberto Fernández is a talkative weakling who thinks like an ambulance-chasing lawyer and apparently enjoys getting henpecked by Cristina Fernández de Kirchner, a lady with wacky ideas who openly despises him not because, having known him for decades, she has his measure, but because he has failed to persuade the Judiciary to drop the many charges against her which could land her in jail.

Strange as it may seem to many, Argentina’s plight is being made worse by the country’s strong attachment to democracy which, as far as most politicians are concerned, means sticking to the letter of the Constitution, come what may. Unfortunately, the one it has is based on that of the United States in which an elected government has to complete its allotted term even if the entire population would much prefer to see it depart. In a parliamentary democracy, the increasingly idiotic Alberto and Cristina show – which quickly degenerated into something akin to mud-wrestling – would have given its final performance over half a year ago but, as the country is saddled with a US-style presidential system, it is supposed to continue running until December 2023. 

For this to change, Alberto would have to resign, get impeached or be unseated by a legislative assembly convened for the purpose of getting rid of him. Were that to happen, Cristina would be next in line, but it would appear that she does not fancy being on the bridge when the good ship Argentina sinks below the waves. Should she step aside, it would be the turn of Senator Claudia Abdala de Zamora, the wife of Santiago de Estero Province’s autocratic governor, followed by the speaker of the Lower House, a certain Sergio Massa, and then by the chief justice of the Supreme Court, Horacio Rossati. With more and more people coming to the conclusion that Alberto is unlikely to survive in office for almost a year and a half more, the constitutional line of succession is something those who are worried about what could happen in the coming months must take into account.

Battered by an onrushing economic crisis, a growing number of people would like to see the entire “political class” sent packing. Of late, even opposition figures such as Horacio Rodríguez Larreta, Patricia Bullrich and the wild libertarian Javier Milei have seen their approval ratings decline, though they have some way to go before they become as low as those of Alberto, Cristina and Sergio. This raises the prospect of a repeat of what happened in the aftermath of the collapse of the currency-board scheme in the final days of 2001, when angry crowds roamed the streets looking for political pros they thought deserved to be lynched though, as luck would have it, none of them were. 

Many opposition politicians fear that a black hole big enough to swallow up not only the Kirchnerites and other Peronists, but also Radicals and supporters of Mauricio Macri, is fast opening up. This makes them very nervous. After doing so well in last year’s legislative elections, they assumed it would be best for them to bide their time, do nothing that could be mistaken for coup-mongering and wait patiently for the government to fall into their hands, but they are now aware that such caution is hurting them. Naturally enough, people who are getting battered by an out-of-control crisis that threatens to impoverish millions more suspect that opposition leaders suspect that they too lack what it would take to save the country from the disaster they see thundering towards it, picking up speed with every day that passes.

They have good reason to feel alarmed. The economy is going from bad to worse. Hyperinflation looms; Argentina is flat broke, but the people who wield most political power think the only way to solve problems is to throw freshly-printed money at them. This is what the new economy minister, Silvina Batakis, has been hired to do. Though she has been typecast as a Kirchnerite true-believer who is willing to do Cristina’s bidding, she makes out she is aware that it would be dangerous to put the government’s expansionary monetary policy on steroids in a desperate effort to outrun inflation.

Exactly how she will manage to square this particular circle is anybody’s guess. Proud as Batakis evidently is of her Greek heritage, she might ask Yanis Varoufakis – a well-known economist who, as she did, earned some of his academic credentials in the United Kingdom and is much-admired by progressives impressed by his willingness to take on those who wanted the Greek government to go easy on spending in order to save Greece from getting booted out of the Eurozone – to give her some tips.

In any case, few think Batakis will be around for that long. Her predecessor, Martín Guzmán, called it quits and stormed out because, thanks largely to Cristina, he lacked the power he would have needed to get anything useful done. Despite his evident inability to rein in inflation, opposition leaders regarded him as a relatively “rational” and presumably honest bloke who had the bad luck to be surrounded by a bunch of cranks and opportunists. Of the latter, the most formidable is Massa who tried to take advantage of Guzmán’s resignation by offering to take over everything connected with the economy and, while about it, the national cabinet.

Had Alberto been willing to stand up to Cristina, who has good reason to be afraid of Massa, the ploy might have worked, but after he let himself be inveigled into talking matters over with his political boss, things returned to what here passes for normal, with the economy ministry entrusted to someone who – like Guzmán until he finally realised his chances of achieving anything worthwhile were less than zero – can be expected to try and steer a middle course between two spiteful individuals who have never shown much interest in economic matters.

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James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).

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