Wednesday, April 17, 2024

OPINION AND ANALYSIS | 07-08-2021 11:31

Journey to an unknown destination

If mere facts are anything to go by, Argentina is heading for yet another almighty crash.

If mere facts are anything to go by, Argentina is heading for yet another almighty crash, one from which she – or what is left of her – will find it extremely hard to recover. According to the official statistics, almost 40 percent of the population has already fallen below a very austere poverty line; many more are likely to follow them before many more months are out. Inflation is running at about 50 percent a year; Emmanuel Álvarez Agis, who was deputy to Axel Kiciloff when he served as economy minister in Cristina Fernández de Kirchner’s government, says this means that we will soon be using as wallpaper those orange thousand-peso banknotes picturing a glum-looking hornero bird (for ornithologists, furnarius rufus), because they will be worth less than the stuff produced for that specific purpose. We are also told that big companies such as Toyota are unable to find the workers they need because most jobseekers barely know how to read and therefore cannot make sense of written instructions.

And if all this were not bad enough, the much feared Delta variant of the coronavirus seems likely to start its rampage here well before most of the population has been fully vaccinated. Though it has just been confirmed that the Sputnik V vaccine can be topped off with shots of AstraZeneca’s or Moderna’s, the inability of the Russians to deliver on time sufficient quantities of the necessary supplement has put many lives at risk. Many who dislike the government blame this on Cristina’s desire to please Vladimir Putin and show the Yankee imperialists and the greedy capitalists of Big Pharma that Argentina did not need them.

Meanwhile, the politicians who are in charge of all this are busy electioneering, an activity which, they have been happy to learn, does not oblige them to make detailed policy statements. Perhaps some will surprise us by coming up with clear-cut practical proposals which could offer a way out of the mess they or their predecessors have done so much to create, but up to now most have limited themselves to squabbling over things the more loquacious of their rivals have said or their alleged links with disreputable individuals.

Though most politicians are more interested in buttering up whoever can get them a place on one of the closed lists of candidates than in anything else, there must be some who would like to help save Argentina from ending up on the scrap heap alongside Venezuela, but who are uncomfortably aware that to say what they think should be done to prevent this from happening could cost them the votes they need in order to stay in business. As far as they are concerned, until the votes are counted it would be better to remain silent about certain matters.

Some observers have taken note of the widening gap which separates the political class from the rest of the population and warn that it could have exceedingly unpleasant consequences. They fear that, sooner rather than later, a sizable proportion of the country’s inhabitants will come to the conclusion they have been betrayed by the political elite and will rebel violently against it. They could be right, but so far the majority has reacted with remarkable stoicism to the rapid decline in living standards and, what is even more important, to the darkening of the prospects facing them and their children. Like the proverbial frog (specialists in anuran behaviour say it is a myth), in a slowly heated pot who refuses to hop out in time to avoid being cooked to death, they have adapted resignedly to the changing circumstances. Not only the ruling Kirchnerites but also many of their foes pray that they continue to put up with the crass mismanagement of the country’s affairs for the foreseeable future.

All democracies are in some degree “populist” because people everywhere are reluctant to vote for politicians who support measures they have good reason to suspect would hurt them. This is why Argentina has been unable to break away from the arrangements which were put in place almost three-quarters of a century ago even after it had become plain that they were incompatible with economic growth.

As the years passed, the difficulties involved in doing so increased and the changes deemed necessary looked less and less appealing to the electorate. It is easy to say that the millions of people who depend on handouts should work for a living, but, as Toyota has reminded us, large numbers of them are virtually unemployable, so depriving them all of what they have grown accustomed to getting would be certain to prove disastrous. Not only elected governments, but also military dictatorships were afraid to give anything like it a try for fear of setting off a “social explosion.”

Argentina could well be approaching the end of the road she took when the then-colonel Juan Domingo Perón put together his own relatively tame and, as luck would have it, less warlike version of Benito Mussolini’s Fascist new order. There is simply not enough money available to pay for what the government wants to do. Despite their outstanding efficiency, the country’s farmers are unable to meet its ever more onerous demands. Credit has dried up; the old trick of borrowing huge amounts of cash and then refusing to pay it back for humanitarian reasons no longer works. All that remains is the printing press, but the more cash it churns out, the higher will be the inflation rate in the months ahead. Although some members of Alberto Fernández’s government seem to believe inflation is not a monetary phenomenon but something more “structural,” what they are looking for is the economic equivalent of that elusive perpetual motion machine.

Will democracy be able survive an enormous collective failure like the one rushing towards Argentina? The chances of it surviving the ordeal that has already begun would be greater if almost all the country’s politicians were not only determined to stick to the rules but also to face up to the huge problems raised by poverty on a huge scale, a broken-backed and terribly unproductive economy and widespread corruption. Unfortunately, plenty of them care little for the democratic niceties, are keener on making the most of the coming economic meltdown than on trying to avert it and have no desire to fight corruption because that would entail making sure that Cristina and her cronies – whose misconduct when she was in office is well documented – got their just desserts, an eventuality which, for Kirchnerite loyalists, does not bear thinking about.

The outlook facing Argentina, then, looks decidedly bleak. Perhaps she really does possess the human resources required for her to emerge in fair shape from the hole into which she has dug herself, but to judge from her performance over the years, she is congenitally incapable of making good use of them.

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James Neilson

James Neilson

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


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