It is widely believed that unless President Alberto FernÃ¡ndez’s government comes to an agreement with the International Monetary Fund very quickly, Argentina will sink much deeper into the quagmire in which it has been trapped for so many decades, with millions more of its inhabitants falling below the poverty line. and a growing number of businessmen and talented young people are moving abroad because they believe that it would be worse than no use for them to stay here. We could be on the verge of knowing if those who think this way are right or if they are just spreading fear.
The signs are worrying. When a few days ago, the Minister of the Economy, MartÃn GuzmÃ¡n, admitted that the negotiations with the IMF were going badly because the Kirchnerite brand of the economy is not properly appreciated in other parts of the world. , money markets reacted as usual by selling everything Argentina and sending the country risk index even higher than it already was.
Few are really concerned that the country is on the verge of becoming a somewhat less tropical version of Venezuela, which under a regime many Kirchnerians admire has been reduced to a miserable wasteland ravaged by famine and teeming with thugs. that drove more people into exile than did the Syrian regime and its equally brutal enemies, but it cannot be denied that Argentina’s prospects look decidedly bleak.
All of this places the Kirchnerite government in an unpleasant dilemma, one that has less to do with the well-being of the people of the country than with its own political and personal priorities. Its leaders believe they must choose between crafting a “plan” which, to be successful, would likely have to include measures that are sure to harm the millions of their supporters who rely on handouts, as well as their friends. in the crony capitalist community, and doing their best to make the most of the catastrophes that lie in wait for them by blaming them on their political enemies. Many obviously prefer the second alternative.
GuzmÃ¡n, President Alberto FernÃ¡ndez and their allies want to make it appear that, without the dogmatism of the technocrats who surround Kristalina Georgieva, it would be quite easy for them to reach a mutually satisfactory agreement with the institution that the Bulgarian lady officially heads. They argue that for the country to gradually repay the tens of billions of dollars it owes the IMF, the economy should continue to grow at a rapid rate, as it did recently after rebounding from a bad crisis. caused by Covid, which is why, in their opinion, the belt tightening measures practiced by the neoliberals would be counterproductive.
They are probably right when they say that if a lot more money was pumped into the economy Argentina could quickly extricate itself from the swamp it wandered in many years ago and it would benefit everyone. , including Georgieva and her colleagues. Unfortunately, not just for them but for a lot of other people, in this part of the world real money is desperately scarce. Given the political elite’s habit of refusing to honor the country’s debts and the government’s hostility to producers of exportable goods, the situation is unlikely to change anytime soon.
Either way, although IMF officials undoubtedly agree that it would be wonderful if Argentina somehow managed to get rich enough to pay off all of its creditors and afford the generous social programs that its politicians deem necessary, they also believe that something will really have to be done to contain inflation, which is currently soaring at more than 50% a year and is expected to go even faster in the months to come. They also insist that before giving their approval to an official economic “plan”, if it finally sees the light of day, it must have the support of most of the opposition.
These demands, which in most countries would be considered perfectly reasonable but in Kirchnerian circles are seen as outrageous, make matters much more difficult. Although GuzmÃ¡n has found inflation useful because it allows him to stealthily cut government spending, as he did by crushing retirees, he knows that if it continues to accelerate it would make the government even more unpopular than it is. ‘it isn’t already. When it comes to living with high inflation, Argentines have had more of a habit than anyone else, and unlike nervous Germans whose folk memories still include the relatively brief hyperinflationary struggle their ancestors endured nearly a hundred ago. years, they can bear a monthly rate. which elsewhere would cause panic. However, their willingness to support constantly rising prices has a limit. Opinion polls suggest inflation worries more people than coronavirus or the shoot-to-kill criminals who infest most urban slums and often seek victims in more prosperous neighborhoods.
As for the adhesion of the opposition as desired by the IMF, because it would take several years for a feasible stimulus plan to yield the expected results, it will be far from easy. Mauricio Macri, Horacio RodrÃguez Larreta, Patricia Bullrich and the others have no desire to take responsibility for the tougher times they see rushing home, which the Kirchnerites and this slippery radical leader, Gerardo Morales, think. which they more than deserve to do because, in their opinion, they were responsible for persuading the IMF to grant them the largest loan in the institution’s history.
According to the Kirchnerites, on this occasion, the IMF broke its own rules because the United States government, then headed by Donald Trump, wanted Macri to win the next election. Presumably, but only because Trump and his advisers believed that allowing Cristina FernÃ¡ndez de Kirchner to move closer to power again would be catastrophic not only for Argentina but also for Latin America as a whole.
To the obvious disappointment of Alberto and Cristina, who at one point saw Democrats as soul mates, it would appear that on this issue the men and women around Joe Biden agree with Trump, which is why the United States remains unimpressed by GuzmÃ¡n’s optimism. mumbling about what the Kirchnerite government will and will not do to secure Argentina’s liberation from the “autonomous market” where, along with countries like Lebanon, Botswana and Jamaica, she does penance and finally becomes a financially respectable member of the international community.