Pot-Banging, Reloaded. Opposition: The Return

Argentina is awake again.

Mrs. President, Please listen to the people. No president, democratically elected or not, has done well without listening to the people (who put them there in the first place!).

What started 97 days ago as a tax revolt has turned into a situation of absolute political upheaval. Not only, as we mentioned before, has the Government succeeded in creating a neew and very popular political figure by the name of Eduardo de Angeli, but they also apparently awoke the slumbering opposition.

Eduardo Duhalde, the storm-riding president in charge of the devaluation and pesification of the economy back in 2002, has returned from the land of the politically dead. He was Kirchner's main sponsor in the 2003 election (eager to beat Menem), only to realize that his political protegé discarded him as soon as he humanly could. To make matters worse, Cristina K humiliated Chiche Duhalde, Eduardo's wife, at local legislative elections in the province of Buenos Aires.

What does he want? Simply put, he wants to fill the void that the K Clan has created between themselves, their court-jesters (many are named Fernández, also) and the people who elected them.

Why does he think he can succeed? Cristina and Néstor Kirchner's public image has falled at record lows; maybe even past the point of no-political-return. A couple of years ago, Duhalde chose to go out silently, and lurk in the shadows until the time was right.

Guess what? The time is right. He is gathering strong opposition voices - from within the hsitorical Peronist party, which Kirchner leads but from which he has ideologically digressed - and could form an interesting coalition for 2009's legislative elections.

I only have one - very premature - doubt in my mind at this point. History has proven that the Peronist party has been the only party that could finish their terms since the return of democracy (Alfonsín, 1989; De La Rúa, 2001). If that is a fact, and if it is also a fact that Mauricio Macri (PRO's recently elected Buenos Aires Mayor) is the strongest pre-presidential candidate for 2011 - where will they find common ground to join forces? Will they? Could Macri run for office without a national party infrastructure? Can Duhalde win without a popular candidate?

I grin with anticipation. Politics is the art of the possible - and the unexpected.

Creating a New Blumberg

With its attack on farmers, the government has once again generated the proper atmosphere for the emergence of what I like to call "situational leaders". Juan Carlos Blumberg, the father of a kidnapped and murdered teenager, became the flagship of the fight that society led against insecurity during Nestor Kirchner's government.

Alfredo de Angelis, a rural director for the Argentine Agricultural Federation (FAA), has jumped to stardom due to the government conflict with his sector. He was quite outspoken about another lockout once the fragile negotiation period with the government is over, and the want to see him behind bars. He says that his powers that be. He says that the campo put him where he is, much like Blumberg blamed his stardom on his son's murder - quite regretfully. De Angeli has been defended by the opposing parties, who are trying to avoid the conflict from turning more sour than it currently is.

The main issue is that the government, with its unpopular measures, in a way has set the stage for the emergence of these accidental heroes. Blumberg came onto the scene a few years ago promising he would not run for office, even though he was courted and enticed by many, and was successful for as long as he stayed independent, representing a claim society considered genuine and truthful. He had the credibility the government lacked and showed the frustration and pain only someone who has been there could. As soon as he accepted a candidacy, he was doomed; his fake engineer title was investigated and he was ridiculized publicly for not being what he said he was. His credibility was lost and so was his appeal to the masses.

De Angelis' appearance is quite different: he appears in an already heavily politicized environment and was outwardly attacked by the ruling party. He is being victimized and could be a possible scapegoat for the failure to properly address the export tax conflict. His protagonism could turn to shreds in the upcoming days or - if the government gets its way - his incarceration could be seen as the martyrdom needed to truly become a political actor in the rural scene (as well as in the union scene, where he already has his place).

Be it how it may, the government has once again planted the seeds of its undoing. By heavily antagonizing a large sector of society and miscalculating the popular reaction to its measures, it has allowed figure as De Angelis and Blumberg to steal protagonism, even if it may only be for their 15 minutes of fame.

The headache for the government for sure will last longer than that.

To Build a Future We Must Put Our Past Behind

Our 200th anniversary as a Nation is approaching, and we will be missing a unique chance to reinvent ourselves. It is a true academic case-study how Argentina has fallen from one of the sweet spots in the country development grid to a below-average country, with inflation, instability, political uncertainty, a restricted and introverted economy and questionable friends. Chile, Mexico and Brazil have taken the long and painful way, and we thought we could take the shortcut to regain our status (1 to 1 convertibility) and now an iron fist rule to keep everyone in line (3 to 1 convertibility).

Never has the country had such favorable external conditions; since 2003, the world has smiled to Argentina and given us a chance to shine again. However, our political leaders have once and again decided to shrug away from that and preferred an isolationist approach (much like their more famous political ancestor, Juan Domingo Perón) and the debt has not paid off. In these past five years, Argentina has "gotten back up", much like a sick person does after being in bed for a month. We have never really gotten out of the hospital, though. And both Nestor and Cristina Kirchner would rather have a country isolated from the outside world, safe among ourselves and indifferent to the rest. To their credit, they learnt that Menem's overtly zealous external policies might have caused some harm - our indebtedness and vulnerability to financial markets made us a sitting duck during any crisis. As it usually happens, the pendulum has swung all the way to the opposite end; and there is no sign anyone is looking to find convenient middle ground for our aspirations to become a serious nation Again.

President Cristina Fernández, right before the elections, generated some positive expectations as someone whose priorities would be to reinsert Argentina in the world while being a more moderate peronist ruler. She has proved everyone wrong is just 100 days, and has quickly but surely dilapidated a large amount of political capital that not only she but also her husband spent 5 years to build. To nobody's surprise, the farming conflict - still unresolved - has stirred criticisms right and left but, more importantly, and a side effect nobody expected, has awakened voiced of dissent from within the ruling party. Suddenly, some province governors speak out against the excessive accumulation of power from the central government. Suddenly, "has been" politicians feel safer to speak out and regain ground in the political arena. What if they got organized and form an opposing coalition for next elections?

This seems like a far off dream. Argentina has no solid national oppostion, and the only one to gain is the President and her husband, who want to alternate in power until retirement (or until son or daughter enter the political world). The Kirchners have a habit of ruling with an iron fist in the Province of Santa Cruz. Argentina is not the Province of Santa Cruz, as Mme. President has learnt the hard way, and the will not stand by to watch her boss everyone around, pointing fingers and uncovering imaginary plots to destabilize her.

She is playing with fire when she refers to recent public manifestations as reminders of the 1976 military coup. She is very vindictive and constantly reminds us that she in on the side of the montoneros who stood up to the military and the Abuelas de Plaza de Mayo who saw their sons fight and lose a dirty guerilla war. It would be of much help for Mme. President to look around and see how Mexico, Chile and Brazil have dealt with similar issues. Constant reminders the way to go. Forgetting is not an option either. Again, a middle ground is always preferred under such nerve-racking issues: assume our history, make sure we don't make the same mistake again and move on.

It is the only way to regain lost ground. No more proud speeches. No more threats. No more obstacles to growth and no more illegitimate taxes. Less fiction would help us build a better reality.

photo: courtesy of the web!

Excellent Video (in Spanish) : Argentina is Definitely Fiction

Public vs Private, Round 2

Ahh ... the conflict continues. Yesterday the government called for a very large public gathering in the historic Plaza de Mayo - "Support for the National Government" or something of the sort. As can be expected, these was not a "spontaneous" show of love for the government; I heard several people say that they were offering money to unemployed to come to the act in officially paid buses. None of this, of course, can be proven, but it exists and the peronist governments have always had this "attraction power" (one can only wonder what the infamous U$S 800 k from the Venezuelan suitcase were for ...).


Anyhow, the president spoke (again, people are getting kind of tired of the barricade speeches) for 26 uninterrupted minutes, with all of the ministers watching and her husband in the shadows, carefully assessing the situation. Needless to say, CGT's leader Moyano and Piquetero Luis d'Elia were among the celebrities who assisted to the VIP spots.

I think the president still has not grasped the essence of the situation, which sge tries to describe as follows:
- Those evil farmers want to leave uus without food
- Those evil farmers want to grab all of the wealth
- Those evil farmers are just a few large landowners, the "common" farmer in fact likes the government
- No democratically elected president in Argentina has been as attacked as she has been in the first 100 days
- She is convinced part of the reason this is happening is because she is a woman (?)
- We will not allow Argentina to go back to the past (?)
- Help me unite the country

The two last points, besides the government's clear meddling into private affairs and private sector profitability, are the two that worry me the most. Mme President has indirectly pointed to the farmers and compared them to the military coup from 1976. What on earth do they have to do with one another? No one knows ... what we do know, is that she is holding on to her president chair and sending out a preemptive message to anyone trying to destabilize her: she fill fight tooth and fang. The farmers do not want to take over the power, they just want to be able to carry out their activities as free from Government intervention as possible (the debate could go on for hours, since the high exchange rate which favors them is also generated by official policy ...).

The last point seems hypocritical at best. With her March 25th speech, she was the first to disrupt peace and separate the country. Since then, it took her 3 more speeches to tone down her fervor and passion, and we can still see that she is unwilling to negotiate what was described by vice-president Cobos as "somewhat rash" (the March 12th announcement of increasing soybean export taxes).

My point is this: people did not come out to the streets last week to support the farmers in its entirety; they came out to protest against the government's attitude and to defend the freedom of the private over the public. Until Mme President understands thatm she will have a very hard time managing the country, because this is bound to happen again.

As for the first 100 days, a short analysis and comparison between her first 100 days and her husband's are under way. Stay tuned!

Hope

For some obscure reason, I want to be hopeful about Argentina. We have had our most recent crises in 1976, 1983, 1989, 1995 (mild) and 2001. Statistically speaking, we are far ahead in the pregnancy of our next crisis. I am really hoping for a miscarriage.

There are Reasons why Public does not equal Private

A few minutes ago I watched how Alberto Fernandez, Chief of Cabinet, informed the press how negotiations with the campo had gone. Sitting besides a speechless Lousteau (who looked a lot like Messi did when he did not get to play in the last World Cup game), he mentioned how everything had gone fine and how after fixing each parties position he had heard the campo's requests. Obviously there was no negotiation on the export taxes, which is what the campo unionists were there for in the first place ... Fernandez did mention a couple of things which will, IMHO, add to the already existing noise: He mentioned they would work on a plan to assure small ruralists a fair profit according to their activity.

I've just got 2 questions: (1). What happens with the mid and large ruralists? (2). How does the government get to determine how much profil any ruralist will make?

A countless amount of questions appear once you start thinking about the first two. Since it's very late and I am very tired, I will just say this: there is a reason why there is a clear separation between the private and the public. Argentinean politicians seem to believe there is no line in the sand, and trespassing is a mere attribution that the State has.

Dear sir, that is wrong. Not only should the State not determine profitability of any sector; it should not intervene at all, except to set clear rules for it not to have to meddle. Then we ask ourselves - how come we are losing ground in Foreign Investment? How come our business climate is far from optimal?

When the state starts taking care of the state - which means finding ways to run more efficiently and therefore need less taxes to run bigger - we will all be better off. Until then, we will continue to be a forever-emerging country run by simple-minded control freaks.

The Story Thus Far ...

I have spent quite some time reflecting upon the inminent socio-political conflict bubbling in Argentina. Needless to say, my findings are not so optimistic - tonight I'll explore recent causes for the turbulence (I leave for later some of the more philosophical reasoning behind it all).

The infamous campo did not start their complaint last night: Mme President's speech was just the drop which made the glass overflow. The relationship between the Argentinean commodity sector and the gov't has been strained since the devaluation. After several years of "thin cows" and suffering continuous losses, the sector suddenly faced devaluated costs and dollar-denominated prices. For some time, it seemed like heaven, and profitability sky-rocketed (however, that does not mean that it was enought to revert years of losses and unrecovered investments!).

The gov't of course quickly realized that the favorable conditions were not only the rising international commodity prices but the new peso-dollar parity of 3 to 1 assured the hacienda and ganado farmers high returns. Enter the export taxes, which effectively drive down the "real dollar" for commodity exports. More violent still, there was even a 6 month export ban on meat, for a similar conflict.

At the same time, an old arch-enemy also started to show her face: inflation. As nominal salaries rose, existing capacity was exhausted, employment rose and industrial capacity did not expand (due to investments), prices started to react. One after the other, internal prices and salaries started a race which is currently ongoing (I would say, at a "fast strolling" pace and not running or sprinting yet).

To conclude, if you inflate costs and reduce by 44% the exchange rate for exports, farmers are left with economic conditions similar or worse than the end of the 90's ... which is precisely where this protest has put us - hitting our pots & pans, when we should be banging our heads for having forgotten our past - and therefore reliving it.

PS -tongiht's and last night's pictures from the internet, not mine!

Pots & Pans have Awaken me from my Slumber

Yeah, yeah, I know: it's been a while. I took a "writing hiatus" mostly for personal reasons: I had a lovely daughter and, quite frankly, there was almost never any time to spare. But tonight, something awoke me from my long slumber.

It happened near 8pm, when I heard a neighbor (a couple of buildings away) hit her pots & pans in the balcony. A couple of moments before I was washed away by the excessive pride shown by Madame President in her speech, directed at the agribusiness who have halted activities since almost 2 weeks ago to protest gov't intromission into their value chain. Our diaper-carrying economy Minister announced 2 weeks ago the increase of export taxes to soybean (Argentina´s main cultive), to ~42%. Yes, you read right: 42 out of every 100 dollars would go to the gov't pocket (and trust me, this is not Sweden - people get nothing from that increase - no more hospitals, no more security, no better education).


So, people said enough: much like a 2001 flashback, people started banging (quite loudly, I must say) their pots and pans in the middle of the street, in their balconies, supporting the agro sector and asking the gov't to reflect on its mistakes. However, it is now almost midnight and we are as far as possible from a peaceful reconciliation: people have gathered at the historical Plaza de Mayo and so have some gov´t-supporting piqueteros. Nothing good can come out of that explosive cocktail.



In the middle of it all, the most important question is related to the Role of the State: ¿Will the gov't reserve the right to determine how much is "enough profit" in the private activities? ¿Is that not a very communist thing to do, and, if so, can they think of ever attracting Foreign Investment this way? (Argentina's economic model, of course, makes sense WITHOUT investment, which would otherwise force the gov't to buy more dollars to maintain the devaluation ...).

This type of thing never happened to Mr Kirchner; except for 2 or 3 occasions when Mr Blumberg - the father of an express kidnapping victim - filled the Plaza to ask for more security. People now gathered with a genuine request to the President: review the economic measures affecting the agribusiness (which suffered great losses during 1997-2002, and has been booming since 2003). The gov't response was, apparently, to send in the piqueteros and take back the Plaza.

These were ordinary people telling the gov't to listen. The gov't loves to speak and to give orders. Argentineans have, in the past and despite continuous episodes when the state appropriated their savings, been docile. Maybe that time is over. Maybe everyone is fed up with someone - be it a he or a she from the K dinasty - bossing them around. This was fine during a crisis, when a strong personality and leadership were needed to emerge as unscathed as possible. Now, the worst seems to be over and the world is giving us a chance to stand up: maybe, and just maybe, people are realizing that they do not want to be so docile or supportive of a President asking for too much and giving too little. Maybe, and just maybe, this opens an enormous door for the opposition to build upon. They have not been able to do so in the past; I trust they have learned from their mistakes and will do so in time for 2011.

If not, we run the risk of attention-grabbing, photolog-loving-teenager Florencia K (aka Florkey) to run for office ... God forbid!

About 2008 and Fresh Starts

For some odd reason, I think 2008 is going to be very different, in more ways than one. First, because I am days away from having my firstborn - a little girl. Second, because I have been taking the last few weeks to reflect upon my blogging activity and think about what I need to do to take it to the next level. Not that I am unsatisfied; quite the opposite in fact.

Too many things are going on in the country without us knowing; and the media are having an active role in showing the general population a certain aspect of the country that does not necessarily match the reality of it all. I have been thinking precisely about this: how to best shorten the distance between the reader and reality in this wonderful country.

Anyhow, this means there will probably be some changes to the blog in the upcoming weeks as I decide how it's best to see it through the year, and as I "merge it" with the Observador de Medios content (see links). Thanks for the patience, and tune in soon for more soon!