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OPINION AND ANALYSIS | 07-09-2019 00:55

Argentina becomes a bundle of nerves

At the end of the line the country has always faced the same trauma: more inflation, devaluation, recession and, eventually, default.

Here’s a selection of some of the stories making the headlines in Argentina this week:

– A group of oil workers attacked teachers who were blocking a road in the Patagonian province of Chubut. The teachers want back wages. The oil workers want to go to work. In reaction, the CTERA teachers’ union called a nationwide strike.

–People blocking the road to the airport in the Iguazú Falls fought with tourists trying to walk cross the picket-line to catch their planes. The demonstrators wanted lower taxes on food items.

– Apparently, there are waiting lists to get safe-deposit boxes in banks.

Argentina is in crisis, no doubt. And that isn’t news to anyone. The country is making international headlines on a daily basis thanks to an economic meltdown happening in the middle of a presidential campaign that will most likely catapult a new Peronist government into power starting December 10. But the road to that date – even the lead-up to the October 27 general elections – seems too long. Things aren’t peaceful and conflict-free, and the anxiety is trickling down into the everyday life of ordinary Argentines.

The campaign officially starts today, but who really cares? Given the unexpected and indicative result that emerged from the August 11 PASO primary, October looks like a cumbersome formality the country has to complete in order to rubberstamp an outcome foretold. This week, the electoral authorities delivered the final, final count of the primary, which showed opposition candidate Alberto Fernández leading with 47.78 percent versus President Mauricio Macri’s 31.79 percent. Not counting the blank votes as valid (as will be the case in the general election) means Fernández climbs to 49.49 percent against 32.93 for Macri. You need 45 percent, or 40 percent and a 10-point lead over your nearest rival, to score a first-round victory in Argentina.

With inflation likely to top four percent in August and September, the deteriorating state of the real economy in the coming weeks will likely further weaken the president’s chances of staging what already looks like an unlikely comeback. A poll published this week indicated that most Argentines believe Macri is to blame for the economic chaos that followed after the primary vote, in contrast to the government’s preferred narrative that says it was all about the opposition’s anti-establishment language (only 15 percent in fact blamed Fernández for the economic trouble, according to the study carried by the firm Federico González & Asociados). If that consensus stood, Macri could actually take even fewer votes in October.

The president’s mood is shaky, and no wonder. The president’s feelings dance to the tune of the foreign exchange market and the amount of US dollars in the Central Bank’s coffers. Macri is trapped in an internal battle, struggling between a president who has to sail through a storm and a candidate whose competitive instinct tells him he has to put up a fight, no matter how tough it may seem.

President Macri appeared in public some 72 hours after his government announced last Sunday a battery of currency and capital controls designed to preserve the country’s dwindling reserves. He said that he did not “like” the measures his government had taken but promised to do whatever it takes to stabilise the economy. However, the next day, in the province of Córdoba, at the end of a week of relative financial calm, he resorted back to the language of electioneering: “The election has not taken place yet… and we can still make a comeback.”

The country as a whole is anxious about how this whole economic riddle of financial controls will unfold. The historic precedents do not augur a good outcome. Argentina has never in its recent history been able to rein in a financial crisis once it had started, and at the end of the line the country has always faced the same trauma: more inflation, devaluation, recession and, eventually, default. The people in the news this week, rushing to the banks to rescue dollar-denominated deposits (which shrank around 20 percent since the August primary) or camping during a cold night outside the Social Welfare Ministry on Avenida 9 de Julio to demand more assistance, are all gripped by that collective memory of repeated tragedy.

Opposition candidate and likely next president, Fernández, meanwhile, spent the entire week in Madrid, where he gave a lecture on how to win an election, met with business leaders and was given the ‘president-elect treatment’ by the local authorities. If possible, Fernández will be on cruise control on the road towards October, hoping only to avoid unforced errors. But everything does not only depend on him. This week Juan Grabois, a picketeer who is a member of the Frente de Todos electoral front, said he wanted to discuss land reform. The anxiety of Argentina’s powerful landowners grew to unspeakable levels. Grabois was later called to order by Fernández’s campaign managers, and he kept silent then, but he did not take his words back.

In Madrid, Fernández tried to mind his own business, telling the Spanish Parliament that Argentina has “touched bottom” with Macri. Things “can only get better from there,” he added. Some Argentines do not seem so sure about that.

Marcelo J. Garcia

Marcelo J. Garcia

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