Many members of Argentina’s political class are experts when it comes to making the most of failure
Argentina may not be the only country in which what makes good economic sense tends to be politically suicidal, and vice-versa, but few others can compete with her in this particular terrain. Sooner or later, all her presidents feel themselves obliged to choose between attempting to ensure their own survival by loosening the purse strings and that of what is still left of the economy by tightening them.
Until a couple of months ago, Mauricio Macri thought that, thanks to foreign investment, he could have it both ways. That proved to be an illusion. Some may be in the pipeline, but it has yet to make much difference and, to make matters worse, under the stewardship of Donald Trump, the United States could soon start repatriating the trillions of dollars that for a decade have made life easier for economy ministers and businessmen in “emerging” countries. So, just over a year after taking office, Macri has come to the conclusion that he would be well advised to rein in public spending before the dreaded market steps in and — after depriving him of his job — throws yet another big chunk of the population onto the scrapheap.
That, presumably, was why he told Alfonso Prat-Gay, a man who, like his predecessor Axel Kiciloff, is regarded as a “Keynesian,” whatever that may mean these days, that his presence was no longer welcome. Insiders’ gossip would have it that Prat-Gay earned his boss’ displeasure by looking down his nose at him. In any event, his replacement, the mild-mannered Nicolás Dujovne, is already under attack for his alleged desire to subject Argentina to a spot of belt-tightening.
To justify such an inhuman approach, Dujovne can tell his critics that, given the circumstances, there is no alternative, as Margaret Thatcher used to remind her many adversaries, but Argentine politicians know better. Their earnings put them in the top bracket and they take it for granted that, like their equally well-off counterparts in Europe and the US, they are entitled to demand that the government spend more money on welfare programmes.
As they made clear a month or so ago when they upped their own emoluments, they live in a country in which only a dyed-in-the-wool reactionary could imagine austerity was called for. This being the case, it would be unpatriotic for them to take into account the unfortunate fact that, according to the available statistics, Argentina is far poorer than the developed countries. That is one reason they are preparing to make life harder for Team Macri. Another is awareness that their own personal fate will be at stake in the elections scheduled to........