For Cristina Kirchner and yours, everything is very simple: you have to ensure by any means that the opposition pays a large part of the political costs of the adjustment that, unless Alberto Fernandez choose to throw in the towel, your own government will have to administer. You will have to do it not because the International Monetary Fund is twisting his arm but because the economy itself demands it. Although it is possible that some Kirchnerists, such as the former head of the bloc of pro-government deputies who, emulating his mother, justified his behavior in letters, are sincerely convinced that nothing needs to be adjusted and that if it weren’t for the IMF the country would grow at a speed that would astonish even the Chinese, the saner ones will understand that it would be convenient to take into account the unfortunate economic reality and desist from trying to cure all social ills with increasing doses of inflation. However, there are many government supporters who are so committed to the extravagant narrative that has been fabricated that common sense seems unbearably reactionary to them.
By resigning from the position he held just because he was Cristina’s first-born, the billionaire rentier Maximo Kirchner He positioned himself to fulfill the role of champion of those affected by the cuts that will surely come. It happens that, as things are shaping up, there are many Kirchnerists who would like the opposition to take charge of the damned economic crisis so that they can take advantage of it by throwing stones at Congress and organizing massive protest marches. Needless to say they would love that Alberto will try to expand his cracked base of support replacing Cristina’s stalwarts with members of Together for Change in an effort to form a “government of national unity.” In view of the prevailing situation, such a maneuver would be logical, but the opposition leaders prefer to remain on the opposite path. Like Alberto, they are prisoners of the rigid presidential system inspired by the dysfunctional North American scheme that has contributed so much to the country’s decline.
The big problem that Argentina faces is not the debt but the fact that, with the eventual exception of some financial speculators and geopolitical adventurers, no one in their right mind wants to lend a penny to the national state. Were it not for the distrust that so many feel, public debt would not pose too many difficulties; according to available figures, it is approximately 100 percent of the gross product, while that of the United States is close to 140 percent, that of Spain is 120 percent and that of Japan, the world champion in the field, exceeds 260 percent. Since such countries are considered solvent, they are in a position to manage their respective debts.
So the key question is: will the fuzzy pre-agreement help with the IMF celebrated by Alberto and his collaborators restore confidence in the country’s future? Unfortunately, there is not much reason to believe it. If it is as innocuous as the official spokesmen say, it will only have served to postpone for a few months the catastrophe that seemed imminent just a week ago or, perhaps, to let Argentina continue to float indefinitely in limbo. And yes, as the number two of the IMF, Gita Gopinath, implies, it is somewhat more demanding than the government would like us to think and includes a commitment to raise energy tariffs in areas that are politically sensitive, the abyss that separates the relatively pragmatists Martín Guzmán and Alberto of the ideologues Kheaded by Máximo’s mother, who subordinate absolutely everything to their favorite abstractions and fantasize about a dramatic break with the developed world which, despite them, is and will continue to be capitalist.
Needless to say, any serious plan, program, roadmap or project will have to be based on the awareness that the Argentine economy suffers from very serious structural deficiencies. As it is, pretending to be convinced that these are just some minor distortions that could be corrected without unfriendly measures is worse than useless. It is thanks to the refusal to assume the dimensions of the disaster that it was the protagonist of that Argentina is one of the few countries that has managed to impoverish itself in recent decades. As tempting as easy or, if you prefer, gradualism has been for many governments, the sad reality is that, by postponing a genuine effort to resolve certain fundamental problems in the hope that the opposition of the day will end up paying all the foreseeable costs politicians, has only ensured that more people fell into misery.
For him IMF -that is, in effect, “the world”-, Argentina is like a supposedly talented but wayward student who, for reasons that perplex the psychologists consulted, refuses to learn. When internationally accredited pedagogues try to teach him something, he reacts furiously, insisting that he already knows everything and therefore the knowledge accumulated by other countries does not interest him. In the most prestigious foreign media, including The Economist, which sees Argentina as a great madhouse dominated by delusions, and The Washington Post, which takes it for someone else’s money addict, with the IMF in the role of a narco friend, who is capable of snatching any dollar that is on the loose without having the slightest intention of returning it, they treat it as a neither-nor country that, just as a growing proportion of its young inhabitants neither study nor work. Such analyzes may be malevolent, dismissive, and overlook the unfairness of stereotyping everyone, but the frustration they reflect is understandable. For the rest of the world, the Argentine case is an alarming warning of the risks run by self-indulgent societies that allow themselves to be governed by characters reluctant to make decisions that could harm them politically.
Is this unworthy tradition nearing its end? It will depend on the willingness of the most conspicuous government supporters and opponents to accept that there will be no easy way out of the slimy swamp the country got into much more than half a century ago. To continue wing members allegedly rational of the government treating the IMF like an enemy that for circumstantial reasons they are forced to appease, they will try to find excuses not to keep their promises, betting that others will be in charge of doing so if, as expected, the state of the economy continues to deteriorate.
Such a strategy would make sense if the only thing that mattered was “the fight” with the IMF, but it happens to be a minor issue compared to the gigantic challenge posed by the economy itself. Even if the organism’s cosmopolitan technicians were subjects as execrably malignant and clueless as they suppose Cristina and her admirers, this would not mean that to punish them and teach them that their recipes are perverse it would be worth allowing the country to go bankrupt. Rather, the best way to put them in their place would be to undertake a reform program that is much tougher than the one hinted at in the memorandum of understanding that the government signed.
The priority of the IMF is to prevent the slow-motion implosion of Argentina cause further damage to the ailing global financial system. It will have been partly for that reason, and partly because Kristalina Georgiev and the technicians that surround it do not like to be accused of impoverishing countries in trouble, that their authorities have resigned themselves to signing a pre-agreement as toothless as the one achieved by the president and the economy minister. Like his interlocutors, hehe IMF officials chose to prolong the status quo, perhaps in the hope that the reality represented by inflation and genuine resource scarcity will prove more persuasive than their own claims. After all, in other latitudes, governments adjust not because certain “orthodox” theorists believe that it is good to do so, but because they know very well that refusing to reduce state spending would have decidedly dire consequences.
In general terms, there are two options for the country. Albert’s government could try to promote some urgent economic reforms because I believe they are essential, although I would say that this is what the IMF, hoping that in 2023 he will be supported by a grateful electorate or, in the event that an opponent wins, he would have the satisfaction of knowing that it will be his turn to do the “dirty work”. Needless to say, a genuine reformist program would further anger the staunch supporters of Christina that the pre-agreement that bothered Máximo so much, but at least it would make it possible for the country to begin to recover from its self-inflicted wounds. On the other hand, more of the same, with a lot of sarasa and we are seeing, it would only serve to deepen the ailments that keep Argentina prostrate, in addition to entailing the risk that a social convulsion radically modifies the scenario well before the electoral days that the politicians already have in their sights because, from the point of view of too many, the power that emanates from the ballot box is the only thing that really matters.
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