Determination displaced prudence: Argentina was inevitably destined to be a power, given its natural resources, its regional importance, and a depopulation that made it a fertile land to receive qualified immigrants.
Those times, although distant, persist in all Argentines who wonder why the country “was not Australia, the United States or Canada” when, it is supposed, it had the conditions to be. Exploring the historical validity of that question and the answers that have been proposed over the years has already occupied entire books and, although the task provides us with tools to think about the present, it does not fully resolve the main dilemma: What is and will be the role of the country in this chaotic world, of changes in leadership and of risks and opportunities that are continually armed and disarmed?
“That the world was and will be crap, I already know”
The pessimists will focus their attention on certain problems that Argentina has been dragging for decades and, by virtue of their long history, are almost considered unsolvable and natural. On the economic side, until the beginning of the latest global inflationary trends deepened by the war in Ukraine, Argentina was part of a small group of countries in which “inflation” is a concept discussed at the daily table and not just a rare term. theoretical manuals.
While the ruling coalition (whose bases usually attribute inflation to economic concentration) and the opposition (which usually blames the current fiscal policy for the phenomenon) opt for accusations of different tenors, the truth is that from 1975 to this date no government could consistently and lastingly eradicate the structural increase in prices (the only immediately successful experiment, the Convertibility of 1991, finally proved fragile and unsustainable).
The current context of rising global prices for production and trade makes it more difficult for the current government, which seeks to show prudence within the framework of its agreement with the IMF, to curb the pre-existing inflationary inertia. In this sense, it is also often argued that socio-political volatility is added to the recurring economic volatility in Argentina. The confrontation between Peronism and anti-Peronism, which in the first years of the restored democracy assumed a clearly bipartisan form, gradually mutated towards a politics of coalitions that in practice ended up looking a lot like parliamentary systems.
The Frente de Todos represents a formula that, although it was extremely effective in winning the 2019 general elections, once in office it suffered from the internal heterogeneity that was its electoral virtue.
The opposition coalition is not graced with a different situation, and a bid is waged within itself (although in recent internal meetings it seems to have acquired a certain order) to determine which sector will lead the front facing the general elections next year.
In a political system that was accustomed to a more determined presidentialism, this new “coalitionalist” dynamic has recently been slowing down political times: they are usually provided as examples, especially in the form of criticism of the ruling coalition, the non- -expropriation of the agro-industrial company “Vicentin”, the delay in the legislation of the so-called “tax on large fortunes”, or the lack of a clearer judgment on the responsibilities of the previous government in the taking of foreign debt.
So, Added to the structural problems is a growing difficulty in generating stable political capital, a regional trend that is repeated in several countries (Peru being the clearest example, to which we could add Chile and Ecuador) and that probably only López Obrador in Mexico has been able to overcome efficiently.
“It takes time to arrive, and in the end, is there a reward?”
Even so, as anticipated from the start, Argentina is a paradox: along with the negative factors described, which could push us to lose all optimism about the national future, the attentive eye can see how month after month there are openings of new economic opportunities that, with the wind in their favor (or at least with a slight headwind), allow one to get excited about the long term.
In this sense, the current government has the virtue of being the one that most clearly (or perhaps the only one in recent decades) raised the urgency represented by the basic economic problem of Argentina: external restriction; in Creole, “the country needs dollars.” What may seem obvious in any other place, in Argentina is a greater obviousness because the general population looks to the dollar for savings, and as a result of the fact that the national industry was never able to complete its development towards a functioning less dependent on imports. .
Regarding this diagnosis, the government has not only spared no policies that take care of the existing dollars (even if they were extremely unpopular policies, such as tax limits and surcharges on the acquisition of currency or purchases with cards), but it has also concentrated efforts to attract investments that could represent important sources of dollars, both in terms of income and savings of existing ones.
In this way, The mega-investment by the Australian company Fortescue to produce green hydrogen has made headlines in national and international media in recent months.
In the same way, the deposit Dead cow It has been counting on a growing development in its production of hydrocarbons (oil and gas), resources that in this international context are at their apogee of valorization without any immediate depreciation.
Likewise, the mining It has been developing vigorously in the western provinces of the country, where the extraction of lithium, a mineral of which Argentina is the fourth largest producer in the world, stands out above all with a view to the medium and long term.
However, not everything is extractivism within the optimistic projections of the country: despite its long-standing macroeconomic problems, Argentina continues to have high-quality higher education, with the University of Buenos Aires standing out as the Ibero-American institution that it is today by seven consecutive years the best positioned in the QS Ranking.
As much as it sounds like a campaign speech (which, in fact, it usually is), the truth is that Argentina has quality human resources that, although it is hard to admit, are very cheap in dollars for foreign companies (in effect, the young search for jobs that pay directly in dollars has been growing). IT services, as well as other sectors of qualified work, have been growing modestly but steadily in recent years thanks to this.
One plan to divide them all
Up to this point, it seems that the Argentine paradox consists merely of a question of expectations regarding development. However, they are intertwined with an axis that is particularly central in the country when it comes to debating economic models: the “social justice”.
And it is at this point where reality collides, under the eternal guidance of that old “Manifest Destiny”, against the image that Argentina has of itself. Although from 1975 onwards (and especially in the 1990s) the social structure began to be assimilated to that of the rest of the countries in the region (that is, to the historical Latin American inequality), Argentina is still thought of today as a mostly egalitarian country where the various strata would have the same opportunities.
In fact, there is the curious phenomenon that the majority of the population identifies itself as “middle class”, even though a large proportion of them do not belong economically to this category. When it comes to political models, this ideology of a country that, if it is not egalitarian in the present, should inevitably be in the future, causes problems particularly in the ruling coalition.
In the latter, the Kirchnerist sectors demand that the president Alberto Fernandez and his ministers (especially the duo in charge of the economy) greater attention to social policies over the goals agreed with the IMF. In fact, they have rejected the agreement itself and since then they have concentrated efforts (with the vice president at the helm) on promoting a law that allows the use of Argentine money deposited in tax havens to pay the debt.
In this framework, the tension for the current economic cabinet is twofold: outwards, since the recovery of wages has been slow, and inwards, as the “majority partner” of the coalition progressively increases its discontent towards this and other facts. .
The paradox in the chaos of history
To conclude, we could also speak of Argentina’s international position as a “paradox”, insofar as the country is constantly forced to balance between geopolitical blocks, but it would be futile: in this aspect, Argentina (although sometimes he falls into the vice of making an “ideologized” reading) he is simply doing what he has available to do, be it attracting Chinese investment or ingratiating himself with the United States defense authorities.
If in the 1990s it corresponded to the “peripheral realism” unquestionably aligning itself with the United States, then today it responds well to the same approach to associate simultaneously with the various poles that dominate the globe. History, although it is uncomfortable for those of us who analyze it, is chaotic and unpredictable.
Whether Argentina emerges from its triumphant or defeated paradox will be the result of several combined factors, such as future electoral results, the formation of political consensus, or the course of the international economy. For now, the glass is half empty and half full, and we leave futurology to the tarot.
Source: Ambito
