Silvina Batakis has only been at the head of the Economy Ministry since last Monday, but has already avoided hitting bottom in at least one respect as she faces the impossible crisis prompting all other economists to offer the job. to avoid it – she won’t go down in history as the shortest of 111 ministerial names since 1854 because she already outlasted Miguel Roig, minister for just five days in July 1989 before the heavy smoker (seven packets per day) did not succumb to a heart attack during the reception of the bicentenary of July 14 also in the presence of this columnist (ignoring anything else), as well as a few other ministers for less than a week in 1975- 1976. Although at the level of trivial detail, it could be pointed out that her entry into the Cabinet brings her Hellenic component to 10%, joining Public Works Minister Gabriel Katopodis – the same percentage as his female component until last Monday, when women represented 52.83 percent of Argentina’s population according to last May census estimates while less than 0.1 percent of the ethnic mosaic is of Greek origin.
Moving on to more important questions, this column does not propose to delve into a crisis as impossible to predict as to emerge – my 2017-2018 series of 64 “Economic Questions” columns have given me plenty of experience of the perils of the midweek write-up for the weekend release on an economy as volatile as Argentina. Rather than writing in the sand about the future or even the present, the perspective here will be comparison with the past.
Martín Guzmán already belongs at least to the past and deserves an epitaph. Starting with longevity, his 935 days put him in sixth place of the 27 ministers since the start of my career as a journalist in 1983, ranking him behind Domingo Cavallo (2,249 days), Juan Sourrouille (1,501 days), Roberto Lavagna (1,310 days), Roque Fernández (1,229 days) and Nicolás Dujovne (959 days). Following this quantitative measurement, what would be the qualitative?
A surprise pick for the job (which wasn’t even mentioned until six weeks before President Alberto Fernández named his cabinet with also-dropped productive development colleague Matías Kulfas and Cecilia Todesca the frontrunners), he was widely criticized for being a debt minister in keeping with his Columbia University expertise rather than an economic czar and even in his specialization in sovereign debt restructuring he has been questioned. While reaching a deal with private bondholders at relative speed in the first half of 2020, critics repeatedly blamed him for failing with haircuts and overstating the grace period, n ‘offering nothing more than US$300 million in 2023 for $66 billion in debt and nothing on principal until 2026. What seems true is that he won the battle and lost the war playing debt hard with a pandemic overkill offering lockdown as the perfect excuse – clinching its rollover at the cost of excluding future credit leaving the impression of a government unwilling rather than unable to pay as the problem of Argentina has always been liquidity more than solvency. Nor has Guzmán offered any plans to convince the outside world beyond programs negotiated with the International Monetary Fund. On the latter, the increasingly shaky deal only came at the start of this year, when experts say it should have preceded settlement with private bondholders.
Recommended by Lavagna to President Fernández as having “the necessary dose of heterodoxy and the indispensable dose of orthodoxy”, Guzmán was ultimately deemed insufficient on both counts, the latter front being more fatal. While his academic background should have endeared him to Vice-President Cristina Fernández de Kirchner in many ways (notably having the 2001 Nobel laureate in economics Joseph Stiglitz as his mentor, while the title of his thesis of the University of La Plata “Pro-Cyclical Fiscal Policies in Volatile Contexts” may sound very Kirchnerian), his presidential alignment and his rejection of CFK’s maximalist approach in negotiations with the IMF had already placed him at the top of his death list several months ago – a hostility for which the timing of his resignation last Saturday would decimate media coverage of his speech in the newspapers last Sunday may be insufficient revenge.
Depending on what happens in the remaining 17 months of the fractured Frente de Todos coalition government and this year’s final inflation figure, history might be kinder to Guzmán in hindsight. Ranking sixth in longevity since 1983, he wouldn’t necessarily rank lower qualitatively – he certainly wasn’t a super-minister but only Cavallo (banning inflation with convertibility and modernizing the economy) and Lavagna (bringing back the Argentina from the crisis of 2001-2002 to twin surpluses and “Chinese” growth rates) are in this league during this period. Similarly, only the downfalls of these two ministers (due to presidential jealousy rather than economic failure in either case) marked any substantial change, even though the departure of Sourrouille probably precipitated the hyperinflation of 1989 – Cavallo’s exit was a symptom of Carlos Menem’s intolerance of everything Criticism of corruption and his insistence on making everything subordinate to seeking a third term while abandoning Lavagna stemmed from Néstor Kirchner’s determination to free himself from IMF surveillance and its belief that the twin surpluses were autopilots. Guzmán’s resignation does not enter this league but is something more than a footnote in history – how much remains to be seen. His departure obviously weakens an already devalued presidency but that weakness dates back to the day Fernández was nominated by the bottom half of the presidential ticket.
And Batakis? A hitherto second-rate economic official in the midst of an essentially political crisis seems to lack margin. If she’s going to be a vehicle for Cristina’s proposal for a universal basic income, perhaps Virgil’s “beware of Greeks giving gifts” is as good advice as any.