Tuesday, July 23, 2024

OPINION AND ANALYSIS | 29-10-2021 22:09

The Tom and Jerry show takes an ugly turn

For well over half a century, the International Monetary Fund and Argentina’s populist establishment have been playing cat and mouse with each other. Though the IMF comes equipped with very sharp teeth and claws, all its attempts to corner Argentina have failed.

For well over half a century, the International Monetary Fund and Argentina’s populist establishment have been playing cat and mouse with each other. They are rather like the North American cartoon characters Tom and Jerry. Though the IMF enjoys the backing of the world’s richest and most powerful countries and therefore comes equipped with very sharp teeth and claws, all its attempts to corner Argentina have failed.

Instead of agreeing to do its bidding in exchange for soft loans designed to make it easier for them to put the national economy in some kind of order, the country’s rulers have regularly refused to risk anything they think could cost them votes. As even talking about belt-tightening, let alone “austerity,” provokes howls of rage in this part of the world, their willingness to pander to the electorate by trying to spend their way out of whatever difficulties they confront has had disastrous consequences, especially for the people they say they want to protect. What is more, while in other countries nationalists justify harsh measures by going on about the need to put the national interest first, in Argentina, their counterparts do the precise opposite. In their view, letting things slide is patriotic.

With parliamentary elections just a couple of weeks away, the Kirchnerites are sticking to the traditional script. According to them, the IMF, in cahoots with Mauricio Macri, is almost entirely responsible for Argentina’s plight and should therefore pay through the nose to keep her, and their branch of the Peronist movement, afloat. As has happened so many times in the past, the government has put “resistance” to take IMF suggestions seriously at the core of its policy statements. Its leading lights have taken to firing up bussed-in crowds by stridently telling them they will never bow to the outrageous demands that are now being made on them. One such is asking them to come up with something resembling a coherent economic plan. 

Over the years, Peronists, Radicals and leftists have staged hundreds of big protest rallies in an effort to persuade themselves that it was not their fault that the country continued to go downhill. Though the street-theatre performances they are fond of organising make headlines at home, they do not impress financiers who are looking for places in which to invest the large sums of money they manage. For their own sinister reasons, they tend to steer clear of government-sponsored mobs which shout insults at them and wave posters decorated with the face of Che Guevara.

Nonetheless, the Kirchnerites are not entirely wrong when they say that the IMF deserves to shoulder much of the blame for the unhappy situation Argentina now finds herself in after having wasted almost three-quarters of a century looking for an alternative to the way things are done elsewhere. It could well be that the very existence of the IMF, which stands between indebted countries and the markets, has made the problems facing Argentina far worse than would otherwise have been the case.

Unlike the faceless financial markets, the IMF is represented by recognisable human beings who have fairly clear views about what should be done to rein in inflation, balance the budget and the like, which means they can be accused of having it in for those politicians with different ideological preferences who happen to disagree with them. This allows the Kirchnerites and many others to strike a defiant posture and make out they are defending Argentina against a bunch of foreign technocrats who, according to them, are determined to impoverish the entire population.

As a result, the IMF faces an unpleasant dilemma. Even if the men and women in charge of it were as cold-hearted as populist demagogues say they are, they would still have to convince public opinion in the rich countries that they have no desire to make anyone suffer. However, by adopting a soft approach, they give Argentine politicians an additional excuse for declining to put into effect the kind of measures most of them presumably know would be necessary to prevent the economy from falling over the cliff towards which it is now hurtling at breakneck speed.

This sort of thing has been going on for decades and no doubt there are many local politicians who take it for granted that yet another meltdown would be as tolerable for them as were the previous ones, which left most of them not merely unscathed but even better off than they had been before. Unfortunately, the endgame is already in sight and it looks anything but pretty. While optimists tall us that Argentina simply cannot become a sub-tropical version of Venezuela because her economy does not depend on a single commodity like oil and, in any event, most of the population is dead against anything which smacks of Chavismo, the wretched conditions prevailing in the Buenos Aires Province slum-belt which holds the Federal Capital in its clammy grip could well be providing us with a glimpse of what the future has in store for the entire country.

The Kirchnerites – among them President Alberto Fernández who may not be fully on board with the creed peddled by Cristina Fernández de Kirchner and her more excitable acolytes but evidently feels he should bend over backwards in order to appease them – are letting it be known that, because they are fearless patriots, they are prepared to tell the IMF to get lost. Economists warn them that such a course would be suicidal because the country is flat broke and, as far as serious investors are concerned, is a pariah they would be well-advised to boycott, but it could be that Cristina and her son, Máximo Kirchner, whose overriding priority is to stay out of jail, would rather see Argentina descend into chaos than run the risks they would face were the opposition, allied with the many Peronists who loathe them, to decide it would be in their interest to sacrifice the pair of them on the altar of the “fight against corruption” good old Joe Biden would like all Latin American governments to undertake.

For most political movements, getting rid of an inconvenient leader whose time has passed can be a bit awkward but it usually entails little more than some hurt feelings. However, for Cristina there is far more at stake than her personal pride. Deprived of the political power she has accumulated, she would find it desperately hard to escape the unfriendly attention of a host of prosecutors, judges and others who have more than enough evidence to put her, and Máximo, inside for a great many years, a fate which, understandably enough, she will go to almost any length to avoid. ​

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James Neilson

James Neilson

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


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