Most people appear rational and well-intentioned, once you get them into a conversation. That’s the case for the political class as well, both within the ruling Frente de Todos coalition and the opposition under the Juntos por el Cambio banner. It even counts for the Argentine brand of liberals led by economists José Luis Espert and Javier Millei, and for representatives from the left and leaders of the social movements such as Juan Grabois. Yet, when observed from outside as they try to govern the indomitable Republic of Argentina, it seems as if some of the decisions are absolutely irrational. More often than not, these apparent self-inflicted wounds are ascribed to ideological positions or political convenience. Yet, and while those cannot and should not be discarded, the immediacy of the urgent many times takes priority over the long-term necessities that our poor and embattled nation requires, if indeed the underlying conditions are there for a prosperous future.
After bathing his ego with the praise of global leaders in the international arena a few months ago, President Alberto Fernández probably felt replenished. Even if the confines of protocol and diplomacy are partially responsible for the kind words he received from the likes of Emmanuel Macron and Pope Francis, Alberto needed to build some self-esteem after a tough 18 months in charge of the hectic, bureaucratic and inefficient Argentine state. Not to mention that added pressure of the global Covid-19 pandemic, which teams up with the eternal Argentine economic crisis that probably weighs down on any president’s soul, or at least has since the return of democracy.
His return to the Pampas came as the second (or third) wave of the novel coronavirus continued to pummel the country, giving the president and his team a new opportunity to reach agreements with governors and his main political antagonist, Buenos Aires City Mayor Horacio Rodríguez Larreta, and look presidential. That didn’t really happen.
Fernández is known as a man who tells everyone what they want to hear and many, from the outside, believe he’s constantly trying to speak to his vice-president, Cristina Fernández de Kirchner, through his actions. After his European trip, he kicked off his work routine noting that his top priority was tackling the issue of rising prices within the Argentine economy. On previous occasions, Alberto had noted that his number one “priority” was poverty, the pandemic, education, at one point it was even making sure that actors got back to work. While some could accuse him of being a charlatan, his consistent use of the concept of a “top priority” to tackle any problem put in front of him could respond to his necessity to deal with the urgent, coupled with an incapacity to be able to take a longer-term approach. Part of this probably has to do with the president’s own personality, and partly with the difficulties posed by this country.
Fernández went on to dust off the old Kirchnerite playbook, announcing a ban on meat exports for 30 days in order to put a lid on prices in May. Indeed, according to the latest inflation figures released by the INDEC national statistics bureau, prices rose 3.3 percent in the month of May, with food and beverage costs gaining 3.1 percent in the month. On an annual basis, food prices have jumped 49.9 percent, slightly above overall inflation. While the government recently indicated its plan to open up to exports again, the damage to the sector and global importers has been done.
Interestingly, Agriculture Minister Luis Basterra wasn’t informed or even consulted on the move, which he was later forced to sign up to. Embattled Economy Minister Martín Guzmán received the courtesy of a last-minute phone call, where he reportedly distanced himself from the decision yet did not confront it. It’s important to remember that Guzmán had put his job on the line in order to fire a third-level official within his portfolio, Energy Undersecretary Federico Basualdo, who held on to his job in what can only be read as a direct humiliation of his supposed boss. Productive Development Minister Matías Kulfas – who had advocated for dialogue with the agricultural sector – was also ignored. In his 2016 book Los tres kirchnerismos, Kulfas was explicit about these kinds of measures, noting: “Interventions in the [meat] industry, whose objective was to avoid an increase in prices, generated problems for the sector […such as ] stagnation, the closing of mass beef producers, and, even worse, the price of beef kept on rising.” Basterra, Guzmán and Kulfas all signed the decree that was published in the Official Gazette.
It is difficult to properly ascertain what the actual impact of meat exports is on domestic prices. Yet, if the past can be used to analyze the present, Kirchnerite restrictions on exports, both through an alright ban and through the use of export licences, led to a drop of some 12 million heads of cattle, equivalent to the whole of Uruguay’s stock, according to Perfil’s Lorena Rodríguez, a former editor of SuperCampo magazine. Furthermore, prices surged from US$2.70 a kilo in 2006 to US$8 in 2012, while Argentina’s share of the global market fell. A long-term ban on exports could put pressure on the US$3 billion in hard currency expected to come in this year, while lower supply could lead to higher prices in the medium-term. According to the Argentine Rural Confederations (CRA), only “high-quality” cuts such as lomo and bife de chorizo are exported, along with older animals and parts that aren’t consumed in Argentine, while ‘asado cuts’ supply the domestic market.
Leaving aside the effectiveness of the measure — Internal Trade Secretary Paula Español, one of Axel Kicillof’s protégés, has been trying to contain inflation through price freezes at least since October — the government’s current policies appear absolutely focused on the immediate. Many see the hand of Fernández de Kirchner and her favorite, Axel Kicillof: capping electricity and gas prices; suggesting that Argentina shouldn’t restructure its loans with the International Monetary Fund and just default; going on a full charge against the Judiciary and especially the Supreme Court – these are all are guaranteed ways to deeply antagonize the opposition. As, of course, is banning meat exports. All of these appear as policies aimed at earning points in opinion polls among specific sections of the electorate more closely aligned with Cristina, which constitutes the main base of popular support for this government.
And what of the impact of these measures, and of the opposition’s consistent picking up of the glove, on the rest of us? Guess we can deal with that after the election?