Daniel Scioli: 'Don’t underestimate Alberto Fernández'

One of the most delicate points of the Alberto Fernández presidency is the relationship with Brazil and the Jair Bolsonaro government. Daniel Scioli – one of the members of Frente de Todos coalition with the greatest capacity for dialogue with those who do not think alike – was the man hand-picked for this mission. 

In a feature-length interview, Argentina’s current envoy to Brazil explains his role as ambassador, a key post for keeping Mercosur going without taking his eyes off Argentine politics. 

Scioli, who lost the 2015 presidential election to Mauricio Macri, maintains that the ruling coalition will win in the November midterms because “the people do not wish to regress.”

 

In an interview in this series, Daniel Artana said: “Before we professional economists used to argue over whether we should be more or less  fiscally orthodox. Now we’re all agreed over criticising the Instituto Patria.” Are there differences between your outlook and that of Instituto Patria?

I like [Economy Minister] Martín Guzmán’s work a lot, valuing his human and professional qualities highly. I’m absolutely sure that we are advancing towards a reduction of inflation – it will be under two percent by the last quarter of the year. Nor do I have any doubt that there will be a responsible agreement with the International Monetary Fund (IMF) while economic recovery will be vigorous. He has a marvellous concept: to calm the economy down. That’s the road ahead.

 

So will the domestic problems be solved by empathy?

I have no doubts. Alberto Fernández has that capacity and experience, a tenacity which is being put to the test. He is finding the synthesis of the diversity of all sectors, including Cristina Fernández de Kirchner’s. He is seeking the best path for this country. He has something which some people want to turn into a criticism and which I see as a virtue – the capacity to listen to diversity and make decisions. 

People in the street tell me I was right in 2015. I was Tourism secretary at a very difficult time, in 2002 under Eduardo Duhalde when there was uncertainty and despair. I covered Argentina from North to South, even going to the Antarctic. My message to the president was that we were putting the country on the move again. 

 

So your analysis is a turnaround in Argentina’s economic crisis, is it?

I am totally sure of it. I see what’s happening in industry, the number of new businesses opening, the resurgence of the productive sectors. Re-industrialisation is on the march. There is a new economic organisation and financial system aiming towards that. 

Last month bilateral trade with Brazil increased 133 percent when compared to the previous May. The auto industry is undergoing a sustained recovery, as is agriculture. I see that in every province I go to. I was in Santa Fe where the Marco Polo factory manufactures double-decker buses previously imported; I see it in the Randon chassis and in BiPap: I’ve seen it in Mar del Plata with the trawlers, thanks to the new Brazilian market I opened up for them. 

Banish all doubt. I’m not campaigning, my responsibility is Brazil where I can best collaborate at the moment. The president is a great motivator. He gave me confidence and freedom of action. He told me: “We have to get on well with Brazil.” When I arrived, Brazil was no longer Argentina’s leading partner but now it is again. Over and above the ideological differences, all the objectives I proposed with Jair Bolsonaro, everything I asked him for, has been achieved. Now I have a major objective within the relationship with Brazil – trying to prevent the thinking of Economy Minister Paulo Guedes from breaking up Mercosur.

 

In this same series of interviews, former vice-president Julio Cobos said that Alberto Fernández had been more empowered as Cabinet chief than he is now as president.

Don’t underestimate him. In the next few months we’re going to arrive at over 70 percent of the population vaccinated, which will trigger a public health impact in the first place. We’re going to come out of this nightmare and a great Argentina will begin to emerge. That’s what putting the country back on its feet means in synthesis. The ideas, the road ahead and what it means to have Martín Guzmán as economy minister will then be fully seen. The titanic task will go forward. You cannot kick problems ahead.

 

Has Alberto Fernández convinced Kirchnerism that he is moving in the right direction?

There are obviously tensions in the government agenda with these levels of debt, with vaccines, with Covid-19, situations of stress with people living in daily uncertainty. Alberto is receptive to different viewpoints, demonstrating a great capacity to carry forward this diversity while containing everybody with a high sense of responsibility. Somehow much the same has happened to me. Some people have been sowing discord and dissent all the time. 

 

You’ve always been famous as something of a Teflon man, somebody who could resolve any problem or situation without taking it down to the wire but Alberto Fernández is defined as ‘hot-tempered.’ Why is he having to swallow his pride so much recently?

Because he gives priority to the important things. He doesn’t get entangled in quarrels, no matter how much trouble they stir up. He just thinks of the best for Argentina, which means responsibility and solidity. He has what it takes to shoulder this country and take it forward, to put it in common language. 

 

Does it take courage to swallow your pride at certain times without reacting?

I don’t feel any pride has been swallowed but it tests the fibre of a leader. It’s happened to me – that’s the sense of responsibility. We have seen how the fights between governors and presidents have carried consequences for [Buenos Aires] Province and the country. At that time when they were trying to provoke me into an angry reaction, it was all about having an elevated sense of responsibility and carrying BA Province forward. That’s why the people recognised me for this and why I was a re-elected governor with the most votes in history. 

I’m sure that’s the road. People sometimes listen to silence, they’re very wise in interpreting some issues. I’m sure that at the moment of truth the people will recognise all the efforts made to sustain and reconstruct the public health system and the economy while gearing the financial system to production. The elections are a yes or no to the administration. The people will perceive at that time that the worst is already behind us, that we are more than halfway across the river. We won’t return to the politics of the past which have led us to this crippling reality. I talk to people every day. I’ve been in the industrial park of Morón and I know what’s going on but I transmit very good expectations as to what is to come.

 

Both you and Alberto speak very highly of Raúl Alfonsín.

I had a touching relationship with him due to his friendship with my father. The other day I was recalling him with [Brazilian] ex-president José Sarney, whom I went to see. It’s marvellous listening to him at his age of 91. At some point they said: “Enough with confrontations and mistrust, we must integrate Brazil and Argentina,” setting aside the differences and laying the foundations for Mercosur. Such was the thinking of Don Raúl Alfonsín. For such things to happen did not only depend on him but on the goodwill of all the political sectors, an example of maturity which we also saw when the first part of the debt was settled. That was supported by the governors, the opposition and Congress. 

We have to return to the things which unite us. The battle against the pandemic just has to unite us, as does confronting the debt and inflation. Then there will always be shades of difference but within state policies of consensus.

 

Do you rule out running in Buenos Aires Province in these November midterms? 

The Frente de Todos helm will define the electoral strategy and the candidates. I’m more useful to the country doing this job in Brazil. I’m working for the Argentines, bringing in investments and genuine dollars. I’m at a personal stage where I can deploy everything I have learned. It wasn’t easy reconstructing dialogue with Bolsonaro. Visiting 12 states of Brazil and their governors wasn’t easy either. Also meetings with 10 binational chambers of commerce and with ex-presidents Lula, Fernando Henrique Cardoso and Sarney, all in order to defend Mercosur.

 

Has Joe Biden’s triumph in the United States modified the balance of power in Latin America? Does it boost Alberto Fernández? 

He pays more attention to Latin America with a very great affinity. We see him as sharing the central ideas of Alberto Fernández when it comes to the role of the state.

 

Does Donald Trump not being re-elected increase the specific weight of progressive sectors in Brazil? 

Two things happened for that – Trump lost the election and [ex-president Luiz Inácio] Lula [da Silva] recovered his political rights.

 

Are both things related?

It sent the political scenario rocking and reeling. There was a great empathy, a great alignment. Donald Trump was also in denial over Covid-19 at the start.

 

An attitude similar to Jair Bolsonaro.

I said to Bolsonaro: “Watch out. Look what happened to your friend Trump. Watch out and get vaccination going.” 

The best thing which could happen to us is that Brazil does well. If Brazil grows, our exports grow. I do not give priority to ideological questions. I told him to reinstall emergency assistance on the lines of Argentina’s IFE benefit. I’m not saying that I’m the one responsible for Brazil now entering a stage of mass vaccination. Bolsonaro himself referred to the incorporation of 100 million vaccines. As the year advances, we will find much of the Brazilian population immunised. I have travelled in the inland states of Brazil and I love going to the supermarkets. I seek opportunities for my country, I talk to businessmen and consumers. I see their preferences and tastes. They perceive the quality of Argentine brands and they are interested. It was there I saw the importance of emergency assistance.

 

Which was double the value of the IFE benefit.

To be exact, 600 reals or US$120. 

 

For people whose wages were, on average, lower than in Argentina.

Absolutely. I spoke to Bolsonaro in total confidence, telling him that orthodox liberal economics is OK. I asked him to put in a word for Argentina with the IMF, to back the negotiations. “I’ll talk to [Economy Minister Paulo] Guedes,” he answered me. I explained to him that it was not an economic but a geopolitical issue. Argentina’s stability is very good for Brazil. Argentina is its third trade partner. I explained to him the loan which had been given to his friend [ex-president Mauricio] Macri to be repaid over the next four years: US$45 billion which we are trying to fix. I asked him to come to the Buenos Aires summit, despite what all his advisors were telling him. The president told me that he would be given every guarantee. His answer was: “I will say that I’m going to Buenos Aires and that I back Argentina’s negotiation with the IMF.” And so he did, surprising everybody. Now we are discussing the future of Mercosur.

 

The question was whether Biden’s triumph instead of Trump’s re-election modified in some way the political climate in Brazil, thus causing society and the Supreme Court to take a more benevolent view of Lula’s trials and permitting changes in the political chessboard.

As the ruling itself said, the recovery of Lula’s political rights was due to the evidence exposing that Sérgio Moro had not acted with legal objectivity but with political intentions. 

 

The new ruling quashed the jurisdiction of the Curitiba court, which the same Supreme Court had upheld in the past as valid. It changed its perspective.

I have no doubts about the independence of that Supreme Court. It is a great protagonist of Brazilian politics. 

 

Brazilians know the names of the 11 Supreme Court justices more than the 11 players of the national football team. 

What they did to Lula was very crass, the famous ‘lawfare.’ Both the investigation and the evidence were improved in the initial sentence, which afterwards was upheld by a broad majority of the Supreme Court justices. That Lula has recovered his rights does not mean that Bolsonaro does not stand a chance. He should never be underestimated. Political scenarios can change. He is putting a great effort into vaccination and economic recovery. In these first five months of 2021 the economy has grown 1.2 percent with perspectives of growing five percent by the end of the year. It’s very dynamic. Lula is also interpreting what is being done. 

 

Before the 2015 elections, when you were the Peronist presidential candidate, Lula was in Buenos Aires and asked you to come and see him.

He greeted me seated on the bed of his hotel room in his dressing-gown.

 

How do you see Lula today?

That was in Brasilia. His people got in touch with me and asked me if I was ready to see him. I like to talk to everybody and especially to him, being grateful for his attitude in my 2015 campaign. Lula is very special, very lovable. It seems to me interesting to listen to ex-presidents, especially in this context and also given his friendship with Alberto Fernández, which is public knowledge. I told Bolsonaro that I was going to see him. I found him strong after everything which had happened to him. The last time I had seen him was in his trade union offices in 2017 or 2018.

 

Is Lula the same person as in 2015?

I found him with great vitality. At 75, he may be perceived as a very determined and lucid man with the attitudes of a peacemaker. That’s why he’s making the rounds with Brazil’s leading figures, meeting up with Fernando Henrique Cardoso. He is seeking calm.

 

But Lula was always something of a Gandhi. Thus he maintained the economic policies of Fernando Henrique Cardoso and his Central Bank governor. 

He’s a man with those characteristics.

 

Which are now ignited? 

Yes. That has to do with what’s going on inside him. He is interpreting the demands of the Brazilian people when faced with a leadership like Bolsonaro. I did not find a euphoric man, I found him cautious. He has his own diagnosis and perception of reality. I saw him as very conciliatory with the press, which was very harsh with him. He talks a lot to the middle class, the middle ground and we should do so too since that percentage of undecided or independent centrist voters defines elections with great impact. We should talk to the PyMEs [small and medium-sized companies] and to the middle class in general. I saw Lula with that attitude. We spoke about my job. I gave him a graph showing that in 2010, when he stepped down from the presidency, the bilateral trade between Argentina and Brazil peaked at US$44 billion. I told him that we had to work on recouping the trade deficit and that the president’s mandate was to give priority to the interests of my country, not buying more from but selling more to Brazil. There were 49 trade disputes in the agricultural sector. In the next few days I’ve been invited by San Juan Governor Sergio Uñac because we freed up their grapes. Ditto for La Rioja’s garlic and the fisheries in ports like Mar de Plata, Bahía Blanca, Puerto Madryn or Trelew. His [Lula’s] answer was that we had to work on that. We can change that matrix of Argentina’s deficit with Brazil when the project of the Vaca Muerta gas pipeline to southern Brazil comes on stream. Billions of dollars there with Brazil needing to import for its gas and electricity grids.

 

Is Brazil a more protectionist economy, even with a minister like Pablo Guedes?

I concur totally with what you’ve just said.

 

It’s been a very particular year with many deaths and not just from coronavirus. You had a very close relationship with two people who died recently, Carlos Menem and Miguel Bein, who would have been your economy minister [if elected president in 2015] or main economic advisor. 

How did you experience this past year in relation to death, coronavirus and the risk of dying? 

It’s been very heavy for all Argentines, especially those of us who were very close to loved ones who marked out our lives. 

Carlos Menem was the first person to trust in me, not as a sportsman but for my upbeat attitude. He pushed me to take my first step up the political ladder in a Federal Capital primary. We were never out of contact. I was very fond of him, especially for his human qualities, without confusing this with other issues because in 2003 I ended up confronting him. He understood that perfectly, as he let me know when I went to visit him upon becoming head of the Senate [as vice-president]. I knocked on the door of his office and [his secretary] Ramón Hernández answered and I asked if I could greet him. I could not believe it. I addressed him as “Dear President” and his answer was: “Be yourself, the same as ever.” I was always very grateful to him and very close to his family until the last. He was the president for 10 years with his successes and his errors, a testimony of struggle and democratic commitment.

As for Miguel Bein, at that time I had to generate very clear signals. Together with Mario Blejer, he was one of the two fundamental pillars for the development agenda which I proposed to Argentines to solve their pending problems. If there was one thing which characterised Miguel, it was his sense of humour, along with his simple manner of explaining things. During the campaign it was a constant apprenticeship.

 

Jaime Durán Barba, Macri’s own spin doctor, said that if he had been president during the pandemic, the situation would have been unmanageable. How would Argentina have been in 2019 if Daniel Scioli had won in 2015 with the ideas of Bein and other economists?

There would have been a different way of solving the problems. There were two roads: the mega-austerity applied by Macri or the agenda of development, generating certainty and confidence by placing the focus on the productive machinery and bringing in investments while in no way organising the economy around such toxic financial speculation. 

Macri did not take advantage of the huge opportunity of a country without debt, running up debt instead and mainly in dollars. Without leaving behind a better infrastructure or progress of any kind. 

 

Macri says that at least half the money borrowed was to pay previous debt. What would you have done to pay it?

I would have sought an agreement like Alberto Fernández is doing right now. With responsibility, not kicking the ball ahead, and seeking sustainability for Argentina while letting the dynamics of growth provide the genuine revenues. 

 

Would you have settled with the holdouts? 

Yes, but not any old how. That was one of the pending issues. The other was the export duties levied on regional economies. I would have removed them immediately since those economies were losing their competitiveness and their export possibilities.

 

Would you have lifted capital controls immediately?

Gradually. Macri said that he was not going to devalue and look what he did. Not to mention utility bills. Between freezing them and increasing them 3,000 percent there were other ways.

 

What did you think when Alberto Fernández said: “We Argentines would not have had to undergo the hardships of these past four years if Scioli had won”? 

We would have had a more orderly Argentina. Devaluation hits the most vulnerable sectors. Argentina had managed to have the highest salaries in Latin America. The reserves would have been responsibly managed. There would have been very aggressive policies to bring in genuine dollars via investments and more exports, not debt. That’s what I did. The Buenos Aires Provincial Bank when I was governor was a lever for the economic development of the PyMEs.

 

How would you have solved the issue of updating utility bills?

By segmenting them, not with a general increase devastating the purchasing-power of workers and companies.

 

And the fiscal deficit inherited from Cristina Fernández de Kirchner? 

Not via austerity but growth.

 

Was that possible?

Gradually, yes. There are no magic solutions, as proposed by Macri – he arrived and would solve every problem all of a sudden by sheer confidence. At some point the people cannot take it anymore.

 

What role would Cristina have had? Would [your running-mate] Carlos Zannini have played a role analogous to hers now?

They also said that about [former Buenos Aires Province lieutenant-governor] Gabriel Mariotto. We began with difficulties and afterwards we had a good relationship. That’s my personality. They also said that Brazil with Jair Bolsonaro would be impossible. I took over the relationship between Brazil and Argentina at the worst time in the last 40 years and now the scenario is completely different. 

To construct power, you do not need to demonise your predecessor, something I never did. I took over as minister of tourism and sports without attacking Hernán Lombardi and even told many of his team to stay on. When I took over as BA Province governor, nobody heard a word of criticism from me for Felipe Solá. 

Power is constructed by how people perceive your governance and how they accompany you.