Critics of the currency-board scheme Domingo Cavallo used to give Argentina a decade of price stability quite rightly predicted that, as time went by, the inflexibility it entailed would cause serious difficulties. That was true enough, but as what came next should have reminded them, the alternative they had wanted would prove to be even worse. If Argentina’s political elite, unlike those of almost all other countries, simply could not manage affairs without devaluing the national monetary unit every so often, sooner or later inflation would be bound to spiral out of control, as it is now doing.
For an economy to function reasonably well, those in charge of it must steer a middle course between extreme monetary rigidity when it is needed, as it almost always is, and a certain degree of flexibility when it comes to tackling specific problems. The same cannot be said about a country’s political arrangements, in which too much rigidity tends to be fatal. For far too long, Argentina has been imprisoned in a presidential political system that makes it all but impossible for her to adapt to changing circumstances.
As we are repeatedly being reminded, a government that reflects the electoral preferences of late 2019 has lost much of the support it initially enjoyed but the country feels obliged to put up with it for the best part of two more years. This would not matter overmuch if the immediate future looked trouble-free; needless to say, this is far from being the case.
To govern at all effectively, President Alberto Fernández needs the votes of opposition legislators because he can no longer rely on those who obey the whims of Vice-President Cristina Fernández de Kirchner, a lady who – whether she is holed up in deepest Patagonia or in her expensive Buenos Aires flat – lets them know what she wants and what she most definitely does not. Along with the many office-holders who share her views, she despises Alberto and is more than happy to sabotage his efforts, such as they are, to get the economy back on an even keel.
She and her followers also make it impossible for the government to behave coherently on the international stage; Cristina is notoriously fond of autocrats like Nicolás Maduro, Daniel Ortega and, of course, Vladimir Putin, who have nothing against corruption. Other members of the Peronist government, like Sergio Massa, back the United States and, presumably, the Ukrainian leader Volodymyr Zelenskyy.
Some countries, such as Belgium and Switzerland, could carry on for several years without having anything resembling a proper government, but Argentina, which is immersed in a life-threatening crisis, is not one of them. She could pay a very high price if she lets the quarrelsome cranks and mediocrities who have their fingers on the levers of power continue to waste more precious time until, at long last, the date fixed by the political calendar finally arrives and they can be booted out in the constitutionally approved manner.
In last year’s legislative elections, far more people voted for opposition candidates than for those fielded by the Peronist factions which, a couple of years earlier, had coalesced briefly in order to remove Mauricio Macri from office. In a parliamentary democracy, the winners would have had to form a new government straightaway, but, of course, this could not happen because Argentina clings to the presidential system she imported from the United States where, as could become even more evident in November, it certainly does not make for administrative efficiency. This means that, unless something unexpected, and in all likelihood very unpleasant, happens in the coming months, the country will spend most of the next two years under a government much of the population sees as mendacious and utterly incompetent.
All this puts the opposition in an awkward position. Its members do not want to share responsibility for whatever Alberto’s government does because they are uncomfortably aware that appearing to support belt-tightening could cost them votes next year, but they also understand that it would not be in their interest to “inherit” a country ruined by Kirchnerite mismanagement. They must therefore watch their every step. Their game plan is to rubber-stamp measures they think could help improve economic and social prospects without having people think they are in favour of stinginess, while expressing their disapproval of others they consider would have a negative impact. Not surprisingly, the problems this ambiguous approach involves are beginning to cause splits between the fiscal hawks and the instinctively populist in the coalition which expects to sweep all before it in late 2023.
Is there any way of speeding up the transition between a discredited government which not that long ago got thrashed in nationwide elections and the more representative one that, many assume, is likely to arise in well over a year’s time? This could happen if Alberto, after coming to the conclusion that it would be worse than useless for him to continue to pretend that Cristina is on his side, decided to limit himself to ceremonial duties and persuaded the opposition to let one if its number play the role of prime minister with Congress calling the shots. He could also get his relatively moderate supporters to make common cause with the Juntos por el Cambio coalition and thereby give it a clear parliamentary majority. Among other things, this would make it possible for him, or whoever at the time happens to be really in charge, to call a snap election should one seem desirable.
Last week, Alberto came in for a lot of flak for “declaring war” on inflation after having been in office for over two years. It looked as though what opinion polls had long said was public enemy number one had only just caught his attention. Perhaps it had. Until the kerfuffle involving the International Monetary Fund came to a head, the president must have spent far more time worrying about what Cristina, whose priorities are entirely personal, thought about his performance than about the huge problems facing the country. In a parliamentary democracy, in which the men and women who run the country would have to take other matters into account, this would have been most unlikely to happen but, as Putin’s behaviour is reminding us, in places in which a president reigns supreme, he or she can easily lose contact with the rest of the world and spend far too much time grappling with problems few others think are of overwhelming importance.