Tuesday, May 28, 2024

OPINION AND ANALYSIS | 09-07-2022 07:30

From Gooseman to Batgirl?

Recommended to President Fernández as having “the necessary dose of heterodoxy and the indispensable dose of orthodoxy,” Guzmán was eventually found wanting on both counts with the latter front more fatal.

Silvina Batakis has only been heading the Economy Ministry since last Monday but has already avoided hitting rock bottom in at least one respect as she confronts the impossible crisis prompting every other economist offered the post to shun it – she will not go down in history as the shortest-lived of the 111 ministerial names since 1854 because she has already outlasted Miguel Roig, minister for just five days in the July of 1989 before the heavy smoker (seven packs a day) succumbed to a heart attack at the Bastille Day bicentennial reception also attended by this columnist (unaware of anything amiss, however), as well as a couple of other ministers lasting less than a week in 1975-1976. While at the level of trivial detail, it might be pointed out that her entry into the Cabinet takes its Hellenic component up to 10 percent, joining Public Works Minister Gabriel Katopodis – the same percentage as its female component until last Monday when women account for 52.83 percent of the Argentine population according to last May’s census estimates whereas less than 0.1 percent of the ethnic mosaic is of Greek origin. 

Turning to more important issues, this column does not propose to delve into a crisis as impossible to forecast as it is to exit – my 2017-2018 series of 64 “Economic Questions” columns gave me plenty of experience of the perils of writing in midweek for weekend publication on such a volatile economy as the Argentine. Rather than writing in sand about the future or even present, the perspective here will be comparison with the past.

Martín Guzmán at least already belongs to the past and warrants some epitaph. Starting with longevity, his 935 days place him in sixth place of the 27 ministers since the start of my journalistic career in 1983, ranking him behind Domingo Cavallo (2,249 days), Juan Sourrouille (1,501 days), Roberto Lavagna (1,310 days), Roque Fernández (1,229 days) and Nicolás Dujovne (959 days). Following this quantitative measure, what would be the qualitative?

A surprise choice for the post (not even mentioned until six weeks before President Alberto Fernández named his Cabinet with his also dumped Productive Development colleague Matías Kulfas and Cecilia Todesca the frontrunners) he was widely criticised for being a debt minister in keeping with his Columbia University expertise rather than an economic czar and even within his specialisation of restructuring sovereign debt he was questioned. While reaching agreement with private bondholders with relative speed in the first half of 2020, critics variously faulted him for falling short with the haircuts and overdoing the grace period, offering nothing more than US$300 million in 2023 for US$66 billion of debt and nothing on principal until 2026. What does seem true is that he won the battle and lost the war by playing debt hardball with pandemic overkill offering lockdown as the perfect excuse – clinching his rollover at the cost of ruling out future credit by leaving the impression of a government unwilling rather than unable to pay when Argentina’s problem has always been liquidity more than solvency. Nor did Guzmán offer any plans to convince the outside world beyond the programmes negotiated with the International Monetary Fund. Regarding the latter, the increasingly precarious agreement did not come until early this year when experts argue that this should have preceded the settlement with the private bondholders.

Recommended by Lavagna to President Fernández as having “the necessary dose of heterodoxy and the indispensable dose of orthodoxy,” Guzmán was eventually found wanting on both counts with the latter front more fatal. While his academic background should have endeared him to Vice-President Cristina Fernández de Kirchner in many ways (notably having the 2001 Nobel Prize for Economics winner Joseph Stiglitz as his mentor while the title of his La Plata University thesis “Pro-cyclical fiscal policies in volatile contexts” might sound highly Kirchnerite), his presidential alignment and his rejection of CFK’s maximalist approach to IMF negotiations had already placed him at the top of her death list many months ago – a hostility for which timing his resignation for last Saturday to decimate coverage of her speech in last Sunday’s newspapers might be insufficient revenge.

Depending on what happens in the remaining 17 months of the fractured Frente de Todos coalition government and the final figure for this year’s inflation, history might be kinder to Guzmán in hindsight. Ranking sixth in longevity since 1983, he would not necessarily rank lower qualitatively – he was certainly no super-minister but only Cavallo (banishing inflation with convertibility and modernising the economy) and Lavagna (taking Argentina from the 2001-2002 meltdown to twin surpluses and “Chinese” growth rates) are in that league in that period. By the same token only the downfalls of those two ministers (due to presidential jealousy rather than economic failure in both cases) marked any substantial change, even if Sourrouille’s departure probably hastened the 1989 hyperinflation – Cavallo’s exit was a symptom of Carlos Menem’s intolerance of any corruption critique and his insistence on subordinating everything to seeking a third term while dumping Lavagna stemmed from Néstor Kirchner’s determination to break free from IMF monitoring and his belief that twin surpluses were automatic pilot. Guzmán’s resignation does not enter that league but is something more than a footnote in history – how much more remains to be seen. His departure obviously weakens an already devalued presidency but that weakness dates back to the day Fernández was nominated by the bottom half of the presidential ticket.

And Batakis? A hitherto second-line economic official in the midst of an essentially political crisis seems to lack any margin. If she is going to be a vehicle for Cristina’s proposal of a basic universal income, perhaps Virgil’s “beware of Greeks bearing gifts” is as good advice as any.

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Michael Soltys

Michael Soltys

Michael Soltys, who first entered the Buenos Aires Herald in 1983, held various editorial posts at the newspaper from 1990 and was the lead writer of the publication’s editorials from 1987 until 2017.


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