Tuesday, May 21, 2024

OPINION AND ANALYSIS | 13-02-2021 09:14

Suicide pacts are also consensus

Consensus might sometimes push the right buttons but there is no guarantee and it is not a virtue in itself.

Pacts might rhyme with facts linguistically but not always ontologically. A socio-economic pact (aka such lofty titles as “grand national agreement”) has long been something of a Holy Grail in Argentina eternally pursued and never attained – through to this day with this week’s sectorial talks whereby President Alberto Fernández keeps his campaign promise after a fashion and 14 months into his administration.

The apostles of consensus seem far more numerous among the press and pundits than in the electorate as a whole (with just 6.14 percent voting for a party calling itself Consenso Federal in the 2019 presidential elections). They almost invariably follow a single line of argument – after bemoaning that somebody like Roberto Lavagna is not president with consensus replacing polarisation as the name of the game, they then turn to the motherland of the national language as proof positive that socio-political pacts work economic miracles in the form of Spain’s Moncloa Pacts in 1977.

Viewing Moncloa as the trigger of Spanish take-off is one specific example of pacts not rhyming with facts. A glimpse at Spanish growth rates over the last six decades will rapidly show that Spain’s 1986 entry into the vastly expanded market of the European Union was the real catalyst (Brexiteers take note). In the decade following Moncloa, Spain’s annual growth never reached three percent (whereas it had topped five percent in all but three of the last 15 Franco years). EU entry immediately jerked it back above five percent through to 1990 with a further spurt towards the end of the century due to euro euphoria.

Enough about Spain – the focus of this column (in line with this newspaper as a whole) must always be Argentina. Returning to an Argentine context, there is a lot of lazy thinking about how much better everything would be if only consensus could replace the destructive grieta chasm. That would be good riddance indeed and consensus is fine in the abstract but the next question must necessarily be – consensus over what? 

There is no correlation between ease of consensus and the factors most favouring growth and development. Perhaps the biggest percentages of approval in Argentina would cluster around cut-price transport fares and utility billing (and who did not feel relief when on the last day of 2020 the prepaid health increase was nixed within hours of being decreed?) – many (perhaps most) pollsters will tell you that the single most important issue destroying the Mauricio Macri administration were the brutal increases updating household gas and electricity bills from a virtual freeze over the previous dozen years (and thus reviving energy production) while this year the government is shying away from anything more than single-digit increases for public services, even at the cost of perpetuating an unsustainable fiscal deficit. The virtues of wealth taxation might seem a no-brainer given the obscene income disparities in today’s world – but where will it leave the already single-digit investment percentages in Argentina? Confiscating all dollar deposits for the rapid purchase of those 30 million doses of Chinese vaccine on offer would be hard to argue against – but would domestic savings ever recover? Consensus might sometimes push the right buttons but there is no guarantee and it is not a virtue in itself.

This column was written while this week’s sectorial talks were still in progress so any conclusions would be premature. What could be questioned in advance would be a Frente de Todos president meeting sectors separately (the trade unionists and farm lobbies on Wednesday, business leaders on Thursday – divide and rule?) and defining the objective ahead of the talks instead of making it their result. Just as Henry Ford famously said: “Any colour as long as it’s black,” so President Fernández would be prepared to discuss any 2021 inflation figure so long as it is the 20121 Budget forecast of 29 percent (stoutly defended by Economy Minister Martín Guzmán, whose definition of inflation as “macro-economic … and multi-causal” might seem to leave the annual figure a hostage to fortune but who evidently trusts in the government’s ability to multiply price and currency controls as much as it takes to make his forecast stick).

Not much space left to run through the history of socio-economic pact negotiations in Argentina both within and beyond my memory but not much space needed either – if Richard Nixon’s vice-president Spiro Agnew said: “If you’ve seen one slum, you’ve seen them all,” much the same applies to these talks. Almost invariably they start off with vague appeals to national unity, only to be bogged down at the level of specifics.

If we pass over the likes of the agreement of San Nicolás (1852) preceding the 1853 Constitution, such pacts are almost exclusively concentrated in the second half of the last century – the Kirchner presidencies sporadically floated proposals of “social concertation” (most notably the Bicentennial Accord of 2010) but they never left the ground. Most of these were before my time. The first was the Productivity Agreement in the very last months of the first Peronist period in 1955 as a vain attempt to save the presidency with some realistic policies but far too late. The title “Great National Agreement” (GAN, in its Spanish acronym) was coined by the military president Agustín Lanusse in 1971 but he was never more than a stalking-horse for the third and last Juan Domingo Perón presidential term. GAN did take more concrete form then with the price freeze and collective bargaining waiver crafted by Perón’s Economy Minister José Ber Gelbard under the name of National Commitment (1973-1975) but this blew up with the Rodrigazo in 1975, as described in last Saturday ’s column on Isabel Perón.

Falling within my Buenos Aires Herald newsroom experience were the Spring Plan (1988-1989) and the socio-economic agreements accompanying the Olivos Pact of 1993 clearing the way for the 1994 constitutional reform. Unlike the more successful wage-price freeze of the 1985 Austral Plan, which was dictated by the Economy Ministry, the Raúl Alfonsín administration attempted to negotiate the Spring Plan (a similar freeze plus some privatisations) with industrial, rural and labour sectors but with scant response, ending in the hyperinflation of 1989. Underlying the socio-economic agreements (1994-1998) brokered by Peronist Carlos Menem was a consensus over convertibility so deep that it survived into the next Radical-headed administration – until everything blew up in the 2001-2002 meltdown.

The common denominator of this history seems to condemn these talks as symptomatic of an impending crisis, achieving the calm before the storm in the best of cases.  


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Michael Soltys

Michael Soltys

Michael Soltys, who first entered the Buenos Aires Herald in 1983, held various editorial posts at the newspaper from 1990 and was the lead writer of the publication’s editorials from 1987 until 2017.


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