Argentina is ready to extend its sweeping coronavirus lockdown, after a week dominated by calls from business and trade union leaders to relax controls in favour of the economy.
The pace of coronavirus cases here is roughly 80 to 100 a day and concern about the economy has started to dominate the national conversation. Have the lobbyists managed to convince President Alberto Fernández? Speculation is rife that the lockdown would be “relaxed” when it was scheduled to expire tomorrow – but only if you asked the lobbies. The president met with business and trade union leaders, who are concerned about the impact of the restrictions on the halted construction sector and factories. But what actually surfaced is that the authorities are reluctant to allow millions to climb onto public transportation in the big cities and shuttle themselves to work. For now, schools will stay closed and kids will still have to take their lessons online.
On Wednesday, the president met with provincial governors and it became evident that the lobbying by businesses had not done the trick. The insistent prodding of the presidential shoulder sheds light on the way the president chooses to run the country. Arguably, unlike many of his predecessors, it seems Fernández really does take a day or two to hear out the governors, business leaders and the Peronist trade unions (his allies, lest we forget). Then the doctors have the last say. And the doctors do not want a laxer lockdown.
The president’s approach means that an anxious uncertainty is beginning to grip the nation, at least until he finally makes up his mind. The landscape is constantly shifting under him.
What should also concern the government is that this temporary vacuum at times unleashes havoc. Thousands of pensioners flocked to banks last Friday after the government decided to open them for the first time since the lockdown, in order for customers to collect money. Pensioners were exposed to the virus and forced to form long lines in what were often chaotic scenes.
The fumble came after meetings with big bankers and also the pro-government bank clerks’ union, which reportedly had tried to convince officials that banks are not an essential service and should therefore remain closed. Somebody, however, forgot about the retirees who – not used to electronic banking – were unable to collect their pensions, pending from a month back. They rushed to the banks to get that money before it is gobbled up by the system. The uproar, surrounding what looked like an avoidable mess, has dented the president’s credibility when public opinion polls are showing that he is still popular.
The banking controversy arrived accompanied by accusations, against the president and his ministers, that charged officials were dragging their heels in granting soft loans to small companies struggling to pay salaries. To add to the mayhem, at least nine million people are trying to collect an emergency family payment of 10,000 pesos, designed by the government to rescue informal workers who have no way of making a living while staying at home. (The payment could effectively be Argentina’s first experiment at putting in place universal income.)
In the midst of this financial uncertainty, Economy Minister Martín Guzmán announced Monday that bond payments worth more than US$8 billion issued under Argentine law, due this year, will now be postponed until 2021. Is this a selective default? Maybe. But is anybody paying attention to Argentina’s debt drama with the entire world economy hurting so badly from a virus?
Another scandal hit this week when it emerged that the Social Development Ministry had overpaid for a massive purchase of pasta, rice and cooking oil to distribute to canteens. The situation was especially embarrassing because the government is trying to cap food prices in the middle of the coronavirus crisis. The news wrong-footed Social Development Minister Daniel Arroyo, a prestigious expert respected by the opposition and generally not suspected of corruption.
Arroyo – a moderate Peronist who used to report to Lower House Speaker Sergio Massa – was forced to face the press when negative headlines began piling up. Eventually the crisis reached the president, who vowed not to pay if foul play was involved. He had no choice but to scramble to control the uproar because here was the government paying more for tons of spaghetti than the price it had supposedly fixed at your local supermarket.
Later in the week, Arroyo announced the sacking of 15 officials at the key Social Development Ministry, where many factions of the ruling Frente de Todos coalition are involved. The president has since announced that no food by the government can be purchased above the set market price and that he was readying a decree to give municipal governments the power to control food prices at stores. Effectively, here was the head of state giving ambitious mayors (who are always hungry for power, especially in Greater Buenos Aires) some extra muscle to police beef and vegetable prices.
President Fernández, meanwhile, continues to grant many media interviews – he has used his latest appearances to oppose calls for politicians and public administration officials to take pay cuts in the middle of the epidemic. The pot-banging protests have fizzled out, but demands for trimmed salaries continue on social media. Supreme Court justices announced this week that they would be donating part of their salary to the healthcare system, but the president has held his ground and said that the idea of a pay cut for politicos was “demagoguery.”
Instead, the Peronist leader has leant his weight to calls demanding a bill to tax the very rich, initially sponsored by lawmaker Máximo Kirchner (Vice-President Cristina Fernández de Kirchner’s son). The Santa Cruz Province deputy also announced plans to cap supermarket profits and to tax lawmakers with properties worth 20 million pesos or over. The president backed the idea but underlined that extraordinary taxes have to be approved by Congress, which is having difficulties holding sessions during the quarantine, and that repatriated whitewashed funds during the Macri administration can’t be included. Talk of a windfall tax bill – legislation that would hit Argentina’s billionaires club – came after the government had clashed with steel giant Techint over the dismissal of 1,400 construction workers. A plan to tax billionaires (which is bound to further ruffle expensive feathers that have the power to lobby) is also a reaction to lobbying to lower public administration salaries.
The fleeting pot-banging protests (half an hour after the thundering nightly 9pm applause for health workers) appeared to prompt a rift in the opposition centre-right Juntos por el Cambio coalition, which includes former president Mauricio Macri. The front seems to be divided between those who hold office, like Buenos Aires City Mayor Horacio Rodríguez Larreta, and the more hawkish former Macri administration officials, who favour loud protests and cuts. What about the ruling coalition? Will granting more power to municipalities, especially in the Peronist bastion Greater Buenos Aires, upset the balance of power with Buenos Aires Governor Axel Kicillof?
The virus is not political. But those who are fighting it are.
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