MercoPress. South Atlantic News Agency

Argentina’s financial “spin”

On Sunday, Cristina Fernández de Kirchner will be seeking approval to lead the FPV in October’s general elections. With the country currently braving the world’s economic storm, she is keen to keep up appearances.

This Sunday, 14th August, Argentina will hold its first primary elections to determine the party candidates for the upcoming general elections in October. And so the hype and spin, seen throughout the world on such occasions, begins.

Last Tuesday, running mate of Cristina Fernández de Kirchner and Minister of the Economy, Amado Boudou surprised economists when he declared Argentina immune from the current global crisis. Boudou, who is known for his rash and outspoken comments, recently had to apologise after comparing two journalists to “the people cleaning out the gas chambers after the holocaust”, insisted that the “Argentine domestic market is expanding like no other occasion in its history”.
Asked about the current financial crisis he replied “We are prepared. We sustain a loose fiscal outlook and a string of financial tools to face any situation.” In an optimistic display of economic bravado he added “In a world of uncertainty, Argentina is raising assurances.” With inflation currently running at over 20%, his comments are not shared by all, particularly former Financial Secretary Guillermo Nielsen.

Nielson, a renowned economist who played a significant role in negotiating the debt settlement after the Argentine financial crash in 2002, believes “It is a mistake to think that the Argentine economy will not be affected. The current situation will affect the entire planet.” The increased world demand for Soy beans, which make up one quarter of Argentina’s exports, benefited the economy but it has been at price. Neilson believes that whilst concentrating on this windfall the Government “has been neglecting the domestic economy, and an important amount of distortions are hindering a solid economic development.”

In a bid to cash-in on rising world grain prices in 2008, Kirchner attempted to force through legislation to increase the tax revenue from soy bean exports, a move which generated angry protests from the agricultural sector and resulted in an embarrassing loss of face for the government when Vice-President Julio Cobos voted against her policy.

Recovering from a crash in popularity immediately after where she had a rating of 20%, she now leads the polls after the country’s “economic recovery”. With a 40% approval rating, according to most polls, it is almost certain that she will be re-elected in October unless the tsunami of financial turmoil which is affecting the rest of the world breaches the apparently impenetrable Argentine seawall.

Cristina Fernández de Kirchner was born in La Plata in 1953 to parents of Spanish and German descent. She was elected as president in 2007 to succeed her husband Nestor Kirchner. Mr. Kirchner died last year.

By Neil Russell –SeAledPR - Stanley