Monday, March 4, 2024

OP-ED | 02-02-2024 14:46

An omnibus not for everybody

Uncertainty is by no means limited to the final outcome of Javier Milei's bill in Congress.

Impossible to tell at press time when, where and how the ongoing marathon Congress session over the omnibus reform bill would end but it is already worth questioning whether it will do much to clear the waters anyway. The bill has already been emasculated by concessions to the libertarian government’s moderate allies with over half of its 664 articles eliminated, including the slashing of the core fiscal chapter with the battle for a balanced budget set to continue on other fronts. But this does not make the mega-package entirely toothless with the delegation of parliamentary prerogatives to the executive branch (perhaps now the bill’s main battleground) serving up presidential superpowers more than sufficient to ensure that Argentina remains – the previous administration apart – an ultra-presidential democracy.

Yet the uncertainty is by no means limited to the final outcome in Congress any more than the Javier Milei Presidency’s problems of governance are limited to its parliamentary minority. If it took Alberto Fernández 11 months to dump his first minister (Housing Minister María Eugenia Bielsa) despite a Cabinet more than double the size, it has taken Milei less than seven weeks. Nor has there been any clarity in explaining the exit of Infrastructure Minister Guillermo Ferraro – neither a Cabinet meeting leak nor infighting with Cabinet Chief Nicolás sound convincing but rather the impossibility of honouring his portfolio’s name in the face of a blanket ban on public works (unlikely to be relaxed after the fiscal chapter’s withdrawal on the same day as Ferraro’s resignation).

But even if the minister has not been the only official to go in these few weeks, the problem runs deeper. Unlike the two previous administrations, there is no formal coalition with the libertarian government alternating its outreach between Mauricio Macri loyalists and non-Kirchnerite Peronists, two factions tending to regard each other as mutually exclusive and hence no basis for any solid alliance. The sway exerted by Miguel Ángel Pichetto’s Hacemos Coalición Federal in the lower house battle over the omnibus bill shows the follies of such an approach.

Yet aside from the deep uncertainty and an incipient instability, the government’s erratic path often in contradiction with its own ends is causing confusion. In many aspects Milei’s exit route from Kirchnerism follows even more Kirchnerite ways. Inheriting 15 years of export duty folly, this government has no better idea than to increase this levy in its drive towards zero deficit. Kirchnerism always smiled on negative interest rates as steering people away from saving and towards consumer-led growth but the Milei government has taken this negativity to new depths with single-digit interest rates for months of 20-plus percent inflation – the logic here is to melt the Leliq snowball by reversing its ever higher interest rates. History is replete with examples of going one better (or rather worse) than the enemy to ensure victory – Oliver Cromwell’s defence of Parliament against royal absolutism led him to dissolve it altogether for five years, the French Revolution’s crusade against royal tyranny produced the far more ferociously tyrannical Reign of Terror, in order to defeat Nazism Britain installed a state control of the economy which would be the envy of many totalitarian regimes, etc. etc. – and Milei is following this road in many ways to add to the confusion.

Argentina’s new libertarian government is also extremely raw with a steep learning curve ahead of it. As such it has a dogmatism natural to novices but it should have the humility to listen to other voices which do not always respond to corporate self-interest but recall past experiences. Thus those moderate opposition deputies insisting on a Congress filter for each and every privatisation instead of blanket approval are mindful of the recklessly corrupt Carlos Menem experience three decades ago. And those seeking limits on contracting public debt in foreign currency doubtless have the far more recent memory of Macri’s US$44-billion loan from the International Monetary Fund (IMF) in 2018 whose continuing consequences also dog the Milei Presidency. Dogmatism further leads to libertarian deputies placing specific business problems in the same bag as CGT self-interest as a protectionist aversion to competition when not all playing-fields are level. There is also something distinctly cruel about the bid to postpone updating pensions until April, given current rates of inflation – all in the name of zero deficit. Yet this dogmatism of a simplistic philosophy confronting a complex crisis is not only being diluted by reality, as evident from the omnibus bill, but also the numerous opportunists entering government ranks.

But if the Milei term were a football match, his team would still be in the third minute – the last word no more belongs here than to the omnibus bill.    ​


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