How To Freak Out The IMF, An Argentine Story

- Advertisement -

- Advertisement -

The strategy of the Fernández-Fernández administration remains as ambiguous as it did in its first day in office, with the difference that its margin of mobility has been dramatically reduced.

Even after nearly two years in office, it is not entirely clear whether we should believe Alberto Fernández or how we should interpret Cristina Fernández de Kirchner’s silence and absence. This political game of leaving everyone guessing, whether intentionally or not, may in some cases work effectively, as in 2019, an impossible election to the Pan-Peronist Front de Todos Front with Mrs. Fernández de Kirchner on the ticket. allows you to win. While it hasn’t worked out a constructive relationship with the opposition coalition Juntos por el Cambio, at least not since the end of the quarantine-era collaboration, and it appears to be leading the International Monetary Fund to that point. Where there are serious doubts over whether Economy Minister Martin Guzmán will be able to seal a deal with the multilateral organization that would be acceptable to Washington DC, officials from the ruling coalition and the opposition. And one of the biggest reasons for the uncertainty is not US Treasury Secretary Janet Yellen or Buenos Aires City Mayor Horacio Rodriguez Laretta, but the vice president.

- Advertisement -

So far, President Fernández has had several excuses as to why he has not succeeded in “getting the country back on its feet”, which, in his defence, none of his recent predecessors, with the exception of Nestor Kirchner, have achieved. Is. A few years (and in terms of extremely favorable external conditions). The economic debacle inherited from the Mauricio Macri administration (which was much worse than Cristina’s, but apparently also had mediocre consequences), the global COVID-19 pandemic and the midterm elections were various reasons for officials in this administration. . To justify his poor results running the country. Lack of internal unity and opposition (and the media) are a few others. Many of them are valid, but that doesn’t excuse their long string of unexpected errors.

A new game has certainly begun. With the elections behind us and Coivd-19 being put away for now, the Fernández-Fernández administration is trying to restart its government once again. With a strong communication strategy – this time led by Catalan adviser Antoine Gutierrez-Ruby – Fronte de Todos almost balanced the election in the all-important Buenos Aires province and the “mother” of the story of victory despite a modest defeat in both. proposed. of all battles ”and nationwide. Portraying defeat as victory and shifting the debate from his plan to get Argentina out of that hole is working for him in the short term, to President Fernández disregarding Juntos por el Cambios’ tremendous election performance. Little breathing room is given. , But marketing and communications only go so far, and actions (or lack thereof) will begin to speak louder.

Which Alberto Fernandez do we trust? Who in his pre-recorded message on election night logically talked about negotiating with the IMF with the support of the opposition? Or the one that calls for “celebrating this victory” and ousts Macri and liberal economist and by-election Xavier Milli out of the National Governance Pact? The president who told the country’s leading businessmen and the minister that Christina supports a deal with the IMF? And more importantly, will they be able to hold the Vice President’s foot when he is told what is the exact extent of the budget cuts needed to secure the said deal?

Restructuring sovereign debt with the IMF is a necessary but insufficient condition to “get the country back on its feet”. IMF chief Kristalina Georgieva’s illusions of a more flexible fund vanished when she came under scrutiny at the World Bank for allegedly favoring China. Whether that’s true or not, America is now firmly in charge, with Yellen’s deputy David Lipton right in the fund. It’s hard to fathom an IMF that would make an agreement with a nation that maintains double exchange rates, price controls, relentless monetary expansion, and massive energy and utility subsidies in the context of permanent deficits and extremely high inflation. It must be said, the IMF has a long history of pushing countries to the abyss in the name of conservatism and austerity, even when its major shareholders do not actually uphold these values. Nevertheless, Argentina is unable to pay its debt and thus needs to face restructuring or default.

Taking the government at face value – a dangerous proposition – the desired result is a deal with the IMF based on a “plural” plan that will be negotiated with the opposition in Congress starting in December. The need for congressional approval was a condition placed by Guzmán during debt restructuring with private creditors, which was supported by the opposition. What will Juntos por el Cambio do now? As a coalition they delivered an impressive electoral victory, which in turn fueled personal ambitions ahead of the 2023 presidential election. Rodriguez Laretta emerged as the leading contender, but his leadership is being questioned by hardliners in the PRO party and the historic Radical Civic Union (UCR), who no longer see themselves as supporting actors within the coalition. The rise of right-wingers such as Miley and economist Jose Luis Aspert adds additional pressure, drawing voters closer to the extremes of Macri and Pro Party chairman and former security minister Patricia Bulrich.

With the rise of momentum and internal factions, Juntos Por El Cambio finds itself at a crossroads. After stripping Peronism of its quorum advantage in the Senate and limiting its ability to form a majority in the Chamber of Deputies, it must now determine the course of its actions in a significantly more complex environment. Rodriguez Laretta is facing challenges in this election from the hawkers behind the Macri-Bulrich tandem and radicals, led by neurosurgeon Facundo Manes.

This is the context for the remaining two years, with the need to secure a deal with the IMF and a nation suffering from inflation, economic collapse and rising poverty. Conditions exist for political rationality to prevail, but they seem to have generally been there. With the economy booming again and a more balanced political landscape, it is up to elected leaders to prove what they were voted for.

This Piece was originally published in Buenos Aires Times, Argentina’s only English language newspaper.


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox