Tuesday, April 16, 2024

OP-ED | 14-05-2022 00:01

April showers without May flowers

Far from leaving his problems at home, while in Europe President Fernández took them on with a vigour almost never seen when staring him in the face at home.

Applying the most literal measure of distance, namely the geographical, the separation between President Alberto Fernández and his veep Cristina Fernández de Kirchner (the acting head of state in the past week) has only grown – if they were nearly 3,800 kilometres apart at opposite ends of the country as the first week of May closed, this distance had grown to almost 12,000 kilometres by midweek with President Fernández in Berlin. But the distance has also grown in real and personal terms.

Normally a trip abroad with so little apparent urgency as this European swing would be construed as escapism from domestic problems, perhaps headed by Thursday’s announcement of an April inflation rate of six percent but also including the tensions from Frente de Todos infighting, and many presidential critics quickly jumped to this conclusion. But far from leaving these problems at home, as the protocol of international relations might also dictate, President Fernández took them on with a vigour almost never seen when staring him in the face at home. While criticism of his predecessor Mauricio Macri is never absent from the presidential discourse, it took a back seat this time as he directly confronted the woman who handpicked him for the presidency, challenging her hostile economic and electoral pessimism and identifying flaws in her 2007-2015 administration instead of heaping all the blame on Macri as previously. The president then proceeded to threaten the ejection of any official guilty of “obstructionism,” with special reference to the updating of public service pricing (also a hot issue in the past week). If push comes to shove, President Fernández always has the option of accelerating instead of stalling the numerous court cases against his vice-president.

Meanwhile, the European swing was not as pointless or as monopolised by domestic issues as some critics contend. Opportunity has knocked for Argentina with the Ukraine war and President Fernández feels the obligation of walking through that door by marketing Argentina’s real and potential strengths in the food and energy resources now falling short worldwide with such leading suppliers as Russia and Ukraine embroiled in war. Here Germany (hitherto more dependent on Russian gas than most) was the main target with Spain more of a comfort zone – President Fernández sought to woo German investment, in particular for the gas pipeline to maximise exports of Vaca Muerta shale, perhaps hoping that his protectionist obstructionism of the free-trade agreement between Mercosur and the European Union until now might be overlooked. All this on paper anyway because there was little sign of food or energy experts on the presidential entourage (Agriculture, Fisheries & Livestock Minister Julián Domínguez stayed at home, for example). Nor was the diplomatic angle optimal in European eyes – despite a very different context, President Fernández somewhat mechanistically applied the same formula to the Ukraine war as he has done to Cuba, echoing the general international rejection while deploring sanctions. Yet better even a trip of dubious value to maintain contacts abroad than total isolationism.

But back home the Frente de Todos leader now faces the fallout from that April inflation of six percent. Perhaps that might not dim his optimism unduly while economic recovery continues but he should stop to consider that the current consumer-led growth could be more a product of inflation than its antidote with most people feeling impelled to spend their money as fast as they earn it before it loses more value. The Kirchnerite faith in consumer-led growth as a virtuous circle is premised on more pesos meaning more money but it increasingly only means more pesos. Any long-range or even medium-term compliance with the fiscal targets of the International Monetary Fund agreement seems unlikely with the brakes taken off public spending as distribution is becoming the name of the game for not only Kirchnerites but Peronism as a whole. The recent wage and pension boosters plus the permissive attitude towards collective bargaining mark the start of a wage-price race which can only fuel the inflationary spiral.

Besides inflation, President Fernández returns to the complex task of making Frente de Todos live up to its ambitious label. The split in ruling coalition ranks only encourages Juntos por el Cambio opposition leaders to think they can get away with divisions as the cracks widen in a centre-right coalition with its right pulled further right by the libertarian challenge of Javier Milei and its centre apprehensive. Solving the economic problems posed by that April inflation figure will require more than the polarisation, fragmentation and extremism of the current political scenario.


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