[Marxism] Argentine economic woes

Louis Proyect lnp3 at panix.com
Sat Feb 1 08:40:05 MST 2014


NY Times, Feb. 1 2014
As Argentine Peso Falters, President Keeps a Low Profile
By SIMON ROMERO and JONATHAN GILBERT

BUENOS AIRES — As Argentines stew over a currency crisis that has shaken 
markets around the world, many residents here are asking the same 
question: Where is the president?

President Cristina Fernández de Kirchner spoke in public just once in 
the six weeks before the currency plunge last week that set off global 
concerns about the fragility of developing economies. As her country’s 
currency began its slide, she spoke about a subsidy for schoolchildren 
instead.

Then, after the steepest drop in the Argentine peso since the country’s 
economy collapsed over a decade ago, Mrs. Kirchner steered clear of the 
turmoil yet again, flying to Cuba for a summit meeting. Once there, she 
avoided mentioning the simmering crisis almost entirely, opting to send 
Twitter messages about meeting Fidel Castro’s grandchildren. Only later 
did she post a few Twitter messages attributing Argentina’s market 
upheaval to “speculative pressures” by unnamed economic groups and banks.

“The president does not feel she owes any explanation to the citizenry 
as a whole,” said Federico Finchelstein, an Argentine historian at the 
New School for Social Research in New York.

The problems in Argentina have quickly turned it into a symbol of the 
economic pressures building on developing countries, stirring fears that 
the trouble could spread if global demand for commodities wanes and 
investors look for better bets in the United States.

The peso plunged 15 percent on Jan. 22 and 23, from around 6.9 pesos to 
the dollar to 8 pesos, according to Bloomberg News, and has since 
stablized. It closed on Friday at 8 pesos to the dollar. It weakened by 
a total of 19 percent in January.

Many economists say that the trouble here stems from the decisions Mrs. 
Kirchner and her government have championed for years.  She describes 
her politics as “national and popular,” referring to efforts to promote 
national interests and industry, and to put in place policies that reach 
out to the masses.

Generous social spending after the economic collapse, like freezing 
household electricity rates, has widened Argentina’s budget deficit, 
encouraged energy consumption and increased the country’s dependence on 
energy imports, eroding the central bank’s hard currency reserves. 
Inflation is so high that it has become a heated political issue, with 
economists saying it exceeded 28 percent in 2013 and officials insisting 
it was 10.9 percent.

Now Mrs. Kirchner’s recent absences from Argentina’s political scene 
have left her without much of a public defense and fueled a debate over 
whether a power vacuum is emerging — a striking contrast to her strong 
presence during the rest of her presidency. Until recently, Argentines 
have grown accustomed to her appearing extensively around the country, 
speaking regularly on television and expressing herself prolifically on 
Twitter about everything from the quality of Argentine beef to the 
importance of asserting influence in Antarctica.

“It’s at this time when a strong presence is needed, but presidential 
communication is in a stage of strategic retreat,” said Marcelo J. 
García, a political communications researcher at the Society for 
International Development here, which studies global development.

In a barrage of more than 20 Twitter messages early on Friday morning, 
Mrs. Kirchner again stayed away from the turmoil in Argentina’s currency 
markets, striking out instead at influential news organizations that 
have criticized the infrequency of her public appearances in recent 
weeks. Then on Friday night, she appeared in televised images greeting 
Prince Akishino of Japan in the presidential palace here.

Mrs. Kirchner, 60, whose office did not respond to several requests for 
comment, began to withdraw from the public eye last October when she 
underwent surgery here to drain a blood clot near her brain, the result 
of a head injury that was never fully explained by the president, her 
doctors or her advisers.

Later in October, voters dealt a blow to any ambitions that she might 
have had of running for a third consecutive term by giving new momentum 
to her opposition in midterm legislative elections. Her party, the Front 
for Victory, fell far short of the two-thirds majority it needed in 
Congress to amend the Constitution to allow her to run again.

Mrs. Kirchner seemed to recover well from her surgery, but Argentina’s 
economy came under greater stress. With inflation soaring, she 
overhauled her economic team in November, thrusting two young officials 
into prominent roles.

With Mrs. Kirchner largely avoiding the public eye and leaving 
explanations of the abrupt economic policy shifts to her aides, many 
Argentines are fuming.

“She puts the blame on everybody else, but she’s the one running the 
country,” said Iván Orozco, 53, a travel agent. “She sees a reality that 
doesn’t exist.”
Launch media viewer
There was little other activity on Friday as a woman walked through the 
Salon de Los Patriotas Latinoamericanos in the presidential palace in 
Buenos Aires. Anibal Adrian Greco for The New York Times

Even before the currency tumult, polls showed support for Mrs. Kirchner 
falling sharply. Her approval rating plunged to 27 percent in January, 
from 42 percent in November, according to a nationwide survey by 
Management and Fit, a polling company that interviewed 1,600 people 
across Argentina shortly before the peso tumbled against the dollar.

“This is this government’s most important crisis,” said María Casullo, 
an expert on populist politics at the University of Buenos Aires.

Mrs. Kirchner took office in 2007 and still draws support from her base, 
including many poor voters who have benefited from social welfare 
programs that she and her husband, Néstor Kirchner, who preceded her in 
the presidency and died in 2010, put into effect after the financial 
collapse of 2001 and 2002. Her supporters, who point out that 
Argentina’s economy is still expected to grow modestly this year, have 
also assembled an array of pro-government news organizations in an 
attempt improve perceptions of her in a highly critical media landscape.

Cynthia García, a panelist on 678, a pro-government news debate program, 
rejected the notion that Mrs. Kirchner was avoiding discussing the 
currency crisis.

“If she doesn’t use the words that represent neoliberal interests, they 
say she’s silent,” Ms. García said, referring to the market-oriented 
economic policies that prevailed here in the 1990s. “But she is by no 
means a coward.”

The decline in economic growth from the boom years until 2011 is also 
exposing Mrs. Kirchner to greater criticism about her own wealth, which 
has skyrocketed since 2003, the year her husband came to power, 
according to sworn declarations presented to the federal anticorruption 
office.

The Kirchners were worth about $2.3 million a decade ago, largely the 
result of property dealings in Patagonia, their political bastion. In 
2010, their fortune had grown to approximately $18 million, including 
debt, according to Mrs. Kirchner’s sworn declaration, during a period in 
which she was a senator before her election as president.

It is thought that Mrs. Kirchner inherited half of Mr. Kirchner’s 
estate, with the other half going to their two children. Subsequently, 
in 2011, her declared wealth dropped to about $9.4 million before 
growing again to about $10.5 million in 2012, according to her most 
recent submission of documents to the anti-corruption office.

She declared 25 percent and 50 percent ownership stakes in 26 properties 
in Buenos Aires and the Patagonian province of Santa Cruz, where Mr. 
Kirchner was governor for over a decade.

When a student asked her about the rise in her wealth after a televised 
speech at Harvard University in 2012, Mrs. Kirchner said that judicial 
investigations had not revealed any irregularities. “We had, and I have, 
a certain economic position, which is the product of the fact I have 
worked my whole life and I have been a very successful lawyer,” she 
said. “Now, I’m also a successful president.”

As many Argentines resort to buying dollars in the black market here, 
her expanding wealth and near silence as the currency tumult unfolds are 
opening Mrs. Kirchner to greater criticism.

“She used to speak every day and now it’s once every 45 days,” said José 
Fernández Montero, 65, a baker. “She’s looking out for her own 
interests, her own money. The country is going backward.”

Still, the crisis has not fazed her staunchest supporters. “She’s a 
capable lady, an honest lady,” said Jacinta Giménez, 68, a retired 
saleswoman. “I’d vote for her until the very end.”





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