MercoPress. South Atlantic News Agency

Kirchner challenges Jazz effect: “crisis does not affect us”

Two full eyes ignored the crisis, imagine one eye?

Guess who is back? Argentina's First Escort and with a resounding “This crisis does not affect us”. Former president Nestor Kirchner has returned to open politics and in a rally to prop President Cristina Fernandez de Kirchner made the daring remarks.

In spite of the crash of world markets, massive bail out programs, global lack of investor confidence, Mr. K emphasized that "the State must the pulley which catapults the economy" and recalled that when he proposed this option to rescue the Argentine economy he was criticized by "orthodox groups". And "today this (world) crisis is not hitting us", claimed Kirchner. It was his first public speech since last July when his radical position on the farm export tax dispute rewarded him with a bloody nose. His wife's government suffered a resounding defeat in Congress, where supposedly the ruling coalition has a comfortable majority. However Mr. Kirchner seems to have overlooked the fact that Mrs. Kirchner has given instructions to set up a Coordinating Committee, chaired by Cabinet Chief Sergio Massa, to steer the Argentine government's response to the international financial crisis. The committee is to include representatives from the Central Bank, pension funds and stock exchange monitoring agencies. He also seems to have ignored the fact that Argentine Central Bank president Martin Redrado has called for urgent decisions since "last August we erred the diagnosis, we're not facing a liquidity problem but rather a solvency problem". The storm begun in the US "but has already extended to the rest of the world". Apparently Mr. Kirchner is not aware of warnings from Argentina's Industrial Union, which fears the consequences of the crisis in Brazil could impact on Argentina. Brazil has become Argentina's main trading partner "and if we had a trade deficit of 7 billion US dollars when the Brazilian Real exchanged at 1.50 to the US dollar, imagine what could happen with the US dollar at 2,30 Real", said Juan Carlos Lascurain, president of UIA. Furthermore, the US is Brazil's main trading partner and recession will force a contraction of demand for Brazilian goods. The IMF has also issued a bleak forecast for Argentina compared to the performance of the last few years: growth this year is estimated in 6.5% and next year 3.6%, down from the 7% and 4.5% announced last July. The current account surplus, 0.8% of GDP, will become a 0.6% deficit in 2009, according to IMF. But Mr. Kirchner insisted in his political speech, "in spite of all circumstances we've been through, the country has responded with reliability and budget numbers and international reserves are proof of what I'm saying". Reality on the other hand indicates that the "Jazz effect" which Mrs. Kirchner used as an irony to describe the US financial crisis when addressing world delegations at the United Nations, and which according to the Buenos Aires press, was decided during a New York breakfast of the Argentine delegation (including the First Escort), has effectively landed in Argentina in spite of the "K" immunity vaccines.