Friday, July 19, 2024

OPINION AND ANALYSIS | 25-02-2022 18:00

'Stand by me'

The lyrics of ‘Stand by me,’ the song made famous​​ by Ben E. King in 1961, sum up the message from Alberto Fernández and Martín Guzmán to the IMF.

They were saying that the annoyance of the President Alberto Fernández with his Interior Minister Eduardo ‘Wado’ de Pedro was total, that there was no turning back, but the duo have seen each other again. Although, they have allowed it to be leaked, this does not necessarily signify concord, but simply a truce. Might this encounter also have been a meeting between the two Frente de Todos standard-bearers for 2023? Perhaps the president sang that classic song, ‘Stand by me,’ to Wado?

Such oscillations have come, gone and will persist until the end of Alberto’s term. Máximo Kirchner resigned as the ruling coalition’s caucus whip but continues to chair the Buenos Aires Province branch of the Justicialist (Peronist) Party. Vice-President Cristina Fernández de Kirchner remains silent, but every now and then a pawn of hers makes disturbing statements about the agreement with the International Monetary Fund. Alberto wanted the understanding to kick off in the Senate but its chief cried: “Olé” and now it will enter the Chamber of Deputies. And Wado began covering the country with two ministers loyal to Alberto: ‘Kato’ (Public Works Minister Gabriel Katopodis) and ‘Juanchi’ (Social Development Minister Juan Zabaleta). PS: PAMI head Luana Volnovich also returned and Sergio Berni left (Kirchnerism that is, but not his post as Buenos Aires Province Security minister).

What does this all mean? In his book, La Moneda en el Aire, Pablo Gerchunoff recounts a memorable phrase he heard from the lips of Fernando de la Rúa before becoming president: “The ambiguity must be maintained until it becomes unbearable.” Nothing is made clear, quite deliberately, so that the adversary does not know what to tackle, wasting time and energy reacting to contradictory actions, thus never being sure of anything – classic Sun Tzu. The problem with this is that in the conference of magicians, they all know the basic tricks so that only the outstanding conjurers come out on top.

The relationship between the two Fernández is too damaged for either of them to be easily confused although they cannot stop playing the trick for a simple question of the nature of the offices they hold and intuitive reaction. Nothing is impossible in politics, given that needs must and opportunity dictates. They have already come to an arrangement after being mortal enemies – Alberto even went to court in mid-month to testify in favour of his boss. You never know.

Nevertheless, Cristina has allowed it to be leaked that it is not that she does not want an agreement with the IMF but that this one is unenforceable and that in a few months it will need renegotiating. Hence, she reflects: why sign something which cannot stick? Who is being more reasonable, the person who signs now due to deadline desperation or the realist who waits for everything to be reformulated on other terms? Is gaining time any use or does the president just want to show off a trophy to her, Peronism, the markets and the opposition? 

It is worth pointing out that in matters of political strategy and governance, sometimes gaining time is all that can be done, whether because no idea of genius arises, because a propitious cycle is awaited to take full advantage of, or simply due to a trust in Divine Providence. Alberto might reflect: “Macri also had to request a waiver from the IMF because everybody knew that his agreement was also very difficult to honour.” The agreement whose negotiation is now being wound up would start to come into effect with 19 months to go in the presidential term. Curiously enough, almost the same time Macri had left to conclude his term. A curse might be detected there.

Over and above the permanent question of ambiguity, things are happening which are not so ambiguous. Let’s list them: the acceleration of crawling-peg devaluation, the Central Bank raising interest rates, YPF hiking fuel prices, the ‘blue dollar’ remaining stable all this month despite the shortage of reserves (with imports crippled, of course) while less money is set to be printed. It’s a drop in the ocean since the consensus of the market forecast a very difficult February. With February still not over and a month to go before the “golden quarter,” everything is somehow tied together with pins.

The main opposition coalition has already given all it could give up to here: a message of good vibes and moderation before taking a back seat. They have dismantled their most intransigent attitudes and will give quorum although probably without voting in favour. Now the problem is the president’s. As a laudable Argentine political leader said: “They did not invite me to the birthday party and now they want to invite me to the funeral.” They will not put spanners in the works, but nor will they share political costs. Not for nothing did both Alberto and Guzmán avoid making any explicit mention of the Macri government in their January 28 announcement. In a situation of weakness, something is something, but it is not enough to just sing ‘Stand by me.’

The president and his economy minister continue to think that playing it softly can calm the wrath of the Instituto Patria. That’s why Guzmán had his tug-of-war with the Central Bank’s Miguel Pesce over the level of increase in the interest rates, so as not to irritate the “monster.” The president, for his part, goes on rehearsing his gags of symbolic satisfaction, such as his statements to Vladimir Putin. Until now this strategy seems ineffective – the “sell by” date of both expired a long time ago as far as Cristina and Máximo are concerned. Neither does ‘Stand by me’ suffice here.

Everything seems to indicate that we are heading towards a new stand-by deal with the IMF. A term that’s all too familiar for the Argentine economy. One part of the bibliography believes that without major austerity (“without anaesthesia”?) none of this makes sense – that it is all feast today, famine tomorrow. Cristina curiously believes the same but thinks that the feast should be paid by concentrated capital and those who gave the loan to the Macri administration. In that framework the president and his boy wonder are seeking a diagonal that’s too hard to visualise. Paying costs is never pleasant. But paying costs without obtaining benefits is the worst of both worlds. That is what has been happening up to here.

For Alberto, the lines of ‘Stand by me’ are perfectly fitting, but dedicated to the IMF: “No, I won’t be afraid… Just as long as you stand… Stand by me.” Stand by me, IMF.

Carlos Fara

Carlos Fara

Consultor político.


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