MercoPress. South Atlantic News Agency
The Way Out of Argentina’s New Crisis
The late MIT economist Rüdiger Dornbusch used to tell his students in the 1980s that there are four kinds of countries: rich, poor, Japan, and Argentina. No one frets anymore about Japan buying its way to world domination. But the world is worrying again about Argentina. Read full article
Comments
Disclaimer & comment rules“not long ago, one was filmed stashing millions in cash behind the altar of a local monastery”
May 29th, 2018 - 05:59 pm - Link - Report abuse 0I thought it was Jose Lopez with the semi-automatic rifle in the nunnery... I mean, Jose Lopez who was caught throwing bags of money over a convent wall? Or was there a second bizarre religious-flavoured money laundering incident in Argentina?
Anyway, thank you identifying the author, MP. According to Wikipedia, Andres Velasco was finance minister during Bachelet's first term, which is not what I expected. Wonder how in depth his knowledge of Argentina really is?
Andrés Velasco’s opinion piece is full of unsupported statements and distorted facts.
May 30th, 2018 - 03:27 am - Link - Report abuse -1He brings about a loose version of the story about López and his money bags so that he can call the CFK government “crooks and demagogues.” He conveniently ignores that judges have, in two years and a half, produced little – if anything – in terms of convictions.
Velasco ignores numerous denunciations, allegations, investigations and judiciary actions against members of the current government.
But take a look at the cherry:
“…Macri and his team of well-trained technocrats…Macri has shown he can be an able administrator and an astute politician.”
Astute politician? No doubt!
Able administrator? Well…Let’s see the list of achievements so far. Eh…inflation? Nope. Trade balance? Worse. Fiscal balance? Never. Domestic growth? You’re kidding. Jobs? Dismal result. Capital flight? Argentina number one. Borrowing? Ditto. Popular purchase power? Pitiful.
“…interest rates at 40% cannot be sustained for long without harming credibility,” informs us our diligent researcher. Credibility? At 40 per cent benchmark, no business can access credit.
But the absolute best of the “team of well-trained technocrats” (which Macri calls “the best team of the last 50 years)” is the dollar future affair.
A government-friendly judge imputed CFK, Axel Kicilloff and Alejandro Vanoli because of a dollar future operation launched near the end of the CFK government – dollar future is a tool used by central banks.
During the recent financial panic, the government began launching dollar future operations, so now two possibilities open: If dollar future operations are criminal, Macri government officials are implicated. If dollar future operations are not criminal, then CFK, Kicilloff and Vanoli cannot be prosecuted.
Brilliant!
However, the very best is, members of the Macri government are making a kill with dollar future operations that depend on their own decisions. Now that's business sense!
“Andrés Velasco’s opinion piece is full of unsupported statements and distorted facts.”
May 30th, 2018 - 05:36 pm - Link - Report abuse 0Maybe he's been following your posts?
Let us look at some of your unsupported statements in your post (google Statista or tradingeconomics.com for my source data).
“Eh…inflation? Nope.”
He reduced the inflation rate from 40% in 2016 to 25% where it has got stuck, so he HAS had some success with inflation but maybe not enough.
“Trade balance? Worse.”
I agree, that is worse.
“Fiscal balance? Never.”
I agree, that is worse.
“Domestic growth? You’re kidding.”
Actually, he has turned this one around. the growth in 2016 was -1.82% and was +2.86% in 2017 and forecast to be +1.95% in 2018. Or was you “you're kidding” a response to good news?
“Jobs? Dismal result.”
If you look at the most recent data there is a clear downward trend from 9.2% in Jan 2017 to 7.2% in Jan 2018. I wouldn't call this a dismal result.
“Capital flight? Argentina number one.”
The capital flow is high, but I can't say if Argentina is no. 1. It actually decreased slightly between Oct 17 and Jan 18.
“Borrowing? Ditto.”
I can't find any data on this so can you provide it to support your claim?
“Popular purchase power? Pitiful.”
Consumer confidence fluctuates a lot and recently took a bit of a dip. Maybe it was always pitiful?
However, here are some other facts for you:
GDP growth rate Jul 2016 -3.6% Jan 2018 +3.9%. So the economy is now expanding faster than it was shrinking previously.
He really was referring to Lopez, then. I'm not too impressed with this article. Even if you support his policies, the way Macri went about raising the energy tariffs was clumsy; trying to ignore the legal procedure and eventually being forced to follow it by the courts. Similarly his handling of the various protests and the Maldonado case wasn't great, and the Correo Argentino thing was pretty tone-deaf, too. I certainly wouldn't call him an able administrator.
May 30th, 2018 - 05:40 pm - Link - Report abuse 0@EM
I agree the dollar futures prosecution is ridiculous, but they never said the concept itself was criminal. IIRC what they were alleging was that CFK sold them at an artificially low rate in order to... well, that's where it breaks down, because it was Macri's allies who made money on them, not CFK's. If she had made a huge profit herself then the prosecution might have some merit, and if that is what Macri is doing, he could find himself in the same trouble once his term is over.
Anyway, I said you wouldn't like this article, and I was right. But I looked up the author and found some more interesting stuff. What do you think of this idea for a free trade area in the Americas that excludes the United States?
https://www.weforum.org/es/agenda/2017/03/la-era-del-libre-comercio-sin-estados-unidos
@DT
May 30th, 2018 - 07:20 pm - Link - Report abuse 0Absolutely. I commend you for checking on the dollar future, the energy tariffs, the Maldonado case and the Correo Argentino affair--just samples of the ethics of the current government.
In principle, I love the idea of a Mercosur expanded to all Latin American countries, although I note Velasco hopes that it would be achieved by conservative governments. I always thought that a Latin America fragmented into so many countries, some very small and others without sea access was a major weakening factor that facilitated the onset of neocolonialism.
It has to be conservative governments because the socialist ones didn't do it. They *were* interested in international cooperation, but free trade is not part of their ideals, and I think they are too suspicious of other countries and their businesses to give up control of regulations and tariffs. It's a pity because more trade with the neighbours would reduce dependence on big economies like the US and China that they have little influence on, and that would surely be good for everyone in the region.
May 31st, 2018 - 12:32 am - Link - Report abuse 0Do you think Brazil, which became one country after independence, has done better and suffered less external interference than the various Spanish-speaking countries?
@ZB
Jun 02nd, 2018 - 01:27 am - Link - Report abuse -1“…the economy is now expanding faster than it was shrinking previously.”
Well, Zaphod, you do have the courage of your convictions. At this point, most other MP commentators supporting the Macri government appear to have moved to greener valleys.
Unfortunately, what Macri calls “the best team of the last 50 years” appears to combine elitism and arrogance with utter incompetence.
For two and a half years, this group of CEOs have prodigally used the powers of the state to create a favourable business environment for themselves, family and friends, while using the country’s credit card to the max.
They benefited the large landowners, mining corporations, banks and financial institutions while excluding workers, the middle class, medium and small enterprises and other vital sectors.
In this short period, Macri and associates have managed to bring Argentina to the edge.
Now, most of the foreign media still sing the praises of Macri’s “business-friendly approach” which still benefits many foreign investors.
At the national level, some friendly media commentators are beginning to distance themselves from the Macri government before it’s too late.
The opinion public is now decidedly growing tired of Macri’s aimlessly rambling speeches.
Between May 18 – 27, Hugo Haime and Associates (a government-friendly consultant) polled a large sample of citizens county-wide and determined that only 26 per cent of Argentines still approve the current government. As many as 67 per cent disapprove.
Undeterred, Macri and Co. continue their path, still blaming the CFK administration for any woes.
The end won't be pretty.
https://www.grupolaprovincia.com/argentina/la-imagen-de-macri-en-caida-libre-174992
DT:
Even powerhouse Brazil has not escaped the influence and meddling of the U.S. in its politics - see president Joao Goulart story as an example.
@EM
Jun 02nd, 2018 - 09:58 pm - Link - Report abuse 0Then maybe the fragmentation of the Spanish-speaking countries did not make much difference?
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