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OPINION AND ANALYSIS | 19-10-2019 13:36

Crunch time is about to arrive

For most of the country’s political leaders, trade unionists, businessmen and other influential personalities, the traditional way of doing things is perfectly natural and the ideas they cling to are only common sense.

Whoever wins the upcoming elections will find himself in charge of a country which is flat-broke and unable to borrow money from anyone apart from the International Monetary Fund (IMF), an institution whose administrators clearly have their doubts about the wisdom of continuing to bankroll a thoroughly untrustworthy political establishment whose leading lights are all too prone to put their own personal interests first, adventurous loan sharks who like taking big risks in the hope of making a packet and, perhaps, China’s rulers, hard men who use the large sums of money they have piled up to advance their ambitious geopolitical endeavours.

The IMF’s evident reluctance to commit itself to handing over more cash until the elections are over and done with is understandable. Neither Mauricio Macri nor Alberto Fernández seem to have much idea about what would have to be done to prevent Argentina from going belly-up. If they have drawn up realistic emergency plans, both are keeping them under lock and key. Given the circumstances, they have little choice; telling people tough times are on the way would not help either of them to garner that many votes.

However, once these have been counted, the winner will have to come clean. To make matters worse, the international outlook appears to be getting grimmer by the day. The IMF’s new boss, Kristalina Georgieva, has taken to warning us that the world economy could well be on the brink of a major downturn, what with trade wars raging, global debt levels climbing ever higher and more and more countries nearing the brink of nobody knows quite what. China is slowing down, Germany is in recession, Japan remains in the doldrums, Italy is sinking, the United Kingdom and even the United States could soon be in trouble. This means that financial operators will be far less willing than before to lend money to poorer countries, especially when they are notorious deadbeats like Argentina whose willingness, let alone ability, to honour their debts is questionable.

Hardly anyone denies that to have a chance of getting out of the hole into which she has dug herself, Argentina will have to change her ways, but beyond this there is little agreement. Most here take it for granted that, while they themselves and their cronies have always done their bit for the common good and should therefore carry on as before, others have behaved appallingly and ought to be called to order. So far, all attempts to reach a worthwhile consensus like the ones that allowed countries such as Chile and Israel to escape from the inflationary swamp into which they had wandered and then move briskly forward have failed miserably. There is no reason to think the backroom talks currently going on between the representatives of different corporatist sectors will be any more fruitful than the previous ones. For that to happen, the country’s plight would have to be even worse than it already is and its rulers would have to suffer along with the rest.

The situation Argentina is in would be less depressing if, as Fernández loudly insists, Macri were to blame for absolutely everything that has gone wrong. Repairing the damage done by a single government in a four-year stint in office would be relatively easy. Unfortunately, this is not the case. Argentina has been on the sick list for so many years that her ruling class has acquired the mental habits of the chronically bed-ridden who have forgotten what it is like to live an active life.

For most of the country’s political leaders, trade unionists, businessmen and other influential personalities, the traditional way of doing things is perfectly natural and the ideas they cling to are only common sense. When told that unless they rewire their minds and do what others have done, Argentina will never recover from her many self-inflicted wounds, they react with bewilderment. One might as well ask them to start talking in Chinese. As few of them have much to complain about, they assume that others are to blame for the country’s apparently unstoppable decline.

Just when Argentina began sliding downhill is a question many are asking. Some, impressed by statistics concerning poverty and the size of the middle class, assume that until the middle of the 1960s everything was going splendidly. They forget that by then it was generally accepted that some sweeping reforms were long overdue. Others think Juan Domingo Perón’s fascistic regime, which was voted into power soon after World War II, was the one that put Argentina on the road to perdition. But perhaps the rot set in far earlier, when the notion that, thanks to a benevolent deity, the country was rich enough to afford luxuries denied to others, was considered to be beyond dispute.

Since then, few governments, if any, have resisted the temptation to spend far more money that was prudent, printing huge amounts of it when it was in short supply, hence the apparently incurable addiction to inflation that is still very much with us. In September prices rose 5.9 percent; most countries would need three or four years to achieve that.

Having had many decades of practice, members of the bloated political establishment and other top people are used to being left unscathed by the foreseeable disasters with which, time and time again, they have made life harder for large swathes of the population. A favourite way of doing this is to go on and on about the heartfelt sympathy they feel for the “structural” poor and the folk who are getting jettisoned from the rapidly shrinking middle-class. By making out that they share other people’s pain and are determined to alleviate it, they deflect attention from their own enviable situation; the gap between the incomes of professional politicians and that of the overwhelming majority of their compatriots is far wider than in much richer democracies.

There are also far too many of them. In Italy, where the political culture has much in common with Argentina’s, the Five-Star Movement has just forced its partners in the new government to vote for a motion, which was duly passed, reducing the number of deputies from 630 to 400 and of senators from 315 to 200. Something similar could happen here in the not too distant future. With cost-cutting now an evident priority, politicians, who are responsible for so much, should feel morally obliged to tighten their own belts as well as those of almost everybody else.

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James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).


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