While many political pundits opted to focus their attention on the presidential onslaught against the Supreme Court or to engage in geopolitical speculations against the backdrop of the ongoing negotiations with the International Monetary Fund and prospective government trips abroad (or holidays, as the case may be, with the misadventures in Australia of the tennis superstar recently renamed ‘Novac Djocovid’ also fascinating many), many or perhaps even most of our readers would unhesitatingly name last Tuesday’s massive blackout in a quarter of this city as their dominant memory of this week, Omicron notwithstanding. A one-off consequence of freak temperatures, it could reasonably be argued (although let us not forget climate change), and yet this episode also dovetails into a broader political and even geopolitical context.
Not least the IMF negotiations, because the government’s continuing reluctance to bite the bullet on updating electricity billing makes any fiscal deficit below five percent of Gross Domestic Product extremely uphill, experts have estimated (especially if such 2021 windfalls as near-record commodity prices, IMF special drawing rights and the wealth tax do not continue into the new year and if the drought – another adverse consequence of the current scorching temperatures – persists). Ex-president Mauricio Macri was gratuitously opportunistic in jumping on the power cuts to pressure the government, which was quick to remind him of the even more massive Father’s Day blackout of 2019 – any chance of using this emergency to seek mature and rational responses to a problem spanning most of this century thus quickly degenerated into partisan cheap shots. In this particular exchange both sides were wrong. The ex-president was throwing stones from a glass house but in linking the 2019 blackout to massive billing hikes, the government forgets that it happened two months after Macri had frozen all public services for almost the rest of the year as an electioneering strategy – both power cuts were thus preceded by the same policy, whatever the rosettes of the administration at that time.
That common denominator shows that populist energy pricing is an easy way out which then becomes extremely hard to exit for governments facing elections every two years. But only when presented as an either/or proposition in a context of political polarisation. Segmented billing has long been aired, even reaching the desk of a far from disapproving Economy Minister Martín Guzmán. The upmarket neighbourhoods worst hit by Tuesday’s power cuts, in part due to their concentration of energy-guzzling air-conditioning, only confirm that the populism of subsidies mostly favours the wealthier and technological advance can only accentuate that trend in direct proportion to the digital gap. A majority of the population (although not of consumption) would still be in line for subsidies in an increasingly impoverished country but the dense fabric of welfare benefits would provide ample data to identify the potential recipients of “social tariffs.”
If the government cannot scale back the subsidy mountain for billing which is a virtual invitation to squander energy, an IMF agreement will be an even longer shot than it seems now – a deadlock where both the problem and its solution is increasingly seen as “geopolitical.” While on the one hand Washington’s resistance to the government programme is seen as a leading obstacle to a debt agreement, a bailout from China (with reserves totalling almost US$4 trillion) is seen as an optimal Plan B in the default of an IMF agreement, especially among Kirchnerite circles. Contact with both superpowers is due in a very immediate future – next week Foreign Minister Santiago Cafiero will be in Washington meeting his United States counterpart Antony Blinken (with the presence of Argentine Ambassador to Managua Daniel Capitanich at the inauguration of Nicaragua’s authoritarian President Daniel Ortega hardly the best calling card) while President Alberto Fernández is planning a trip to China for the Winter Olympics opening just a fortnight later. Some analysts like to project the domestic political polarisation to the global confrontation between China and the United States but turning this into an either/or proposition would be obviously ridiculous and not even seriously expected by either Washington or Beijing.
Global geopolitics is all very fascinating but to bring it down to earth, what is at stake in the IMF talks is a debt of US$44 billion, not the future of the world, while to bring it even more down to earth, many people will be more worried about when the next power cut is coming. Like charity, power begins at home.