[Marxism] Argentine economic woes
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
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
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
“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
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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