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Thursday, July 12, 2012

Cristina one-woman show

President Cristina Fernández de Kirchner speaks during an event to commemorate the 196 anniversary of the Independence declaration in San Miguel de Tucumán on Monday.
By James Neilson
For the Herald
President’s power built on the ability to manipulate spending

Many decades ago, the British satirical magazine Punch published a still-remembered cartoon in which a fond mother watching a military parade proudly exclaimed: “There’s my boy, he’s the only one in step!” And there is our Cristina, gallantly striding ahead, refusing to take the slightest notice of gale-force inflationary winds that would send all other presidents and prime ministers scurrying for shelter. Unlike them, Cristina knows that though inflation has a very bad press it is not that serious. After all, it loosens things up and makes people rush to spend whatever happens to come their way, thereby giving consumption a helpful push. What is more, her late husband taught her that the only reason right-wingers went on about inflation was because it gave them an excuse to be nasty to the poor by cooling an allegedly overheated economy, something she has sworn she will never ever do. So, while in other parts of the world desperate governments are busy tightening belts, slashing public spending, firing thousands of civil servants, making university students pay more for tuition, and cutting pensions in the name of austerity, Cristina insists they have all got it utterly wrong, that if they had any sense they would take a leaf from her book, fiddle the statistics, and come what may concentrate on encouraging growth by boosting spending.

Provincial governors such as Daniel Scioli would dearly like to do her bidding. They too are all in favour of growth, prosperity and social justice for all, but they have already run out of money. According to Cristina, that is because Scioli is a wretchedly inefficient administrator; indeed, if a suddenly talkative town mayor is to be believed, she thinks he should call it a day and let her manage Buenos Aires Province, a generous offer that, if taken up, would pose a number of complicated constitutional problems. In any event, it seems that Cristina is also running short of funds. If that is the case, the next three years will be chock-full of unpleasant surprises. Like her husband before her, Cristina has “built power” by making the most of her ability to manipulate state spending in order to reward her friends, some of whom have become dollar millionaires thanks to her good offices, and punish those who are unlucky enough to be included in her long list of enemies.

Be that as it may, Cristina is not entirely to blame for the fact that most provinces are teetering on the brink of bankruptcy and their hapless governors feel they have no choice but to pay her homage in the hope she will approve of their grovelling and put a few pesos in their outstretched palms. In theory, Argentina is a federation, but such is the power of whoever is in the Pink House that he or she calls all the shots. Most tax revenues go to the central government, which is supposed to share them out among the provinces in an equitable manner. Few do. Most dole them out as they see fit, giving back lots to their friends and as little as possible to anyone they think is against them or, what to their mind is even worse, could turn into a dangerous rival. Scioli’s plight is attributed to his having said a few months ago that, should Cristina prove unable to scupper Argentina’s current Constitution and therefore be forced to step down in December 2015, he would consider giving it a try. As far as Cristina and her courtiers were concerned, that was more than enough to make him a vile coup-mongering traitor.

Argentina’s “federal” arrangements are intrinsically inflationary. In much of the country it is taken for granted that economic well-being depends on their governor’s personal relationship with Cristina, not on the ability of local industries, services or farmers to generate resources, because if they manage to do so a large chunk will end up in the presidential coffers. Almost all provincial governors rely on the money they can cadge from the president who usually lets them have enough to keep going. The long-term consequences of the realistic belief that, in the last analysis, the only thing that really counts is politics, so it would be a waste of time to make much of an effort to create a business-friendly environment, have been devastating for tens of millions of people, but there is little chances of anything changing in the foreseeable future because it is in the interest of the president and her political allies in the provinces to keep things the way they are.

Another major obstacle on the road to sanity is the sheer size of Buenos Aires Province and its proximity to the city of the same name. With almost forty percent of the country’s population and its economic output, the federal government has to handle it with care. Should it go under for lack of funds, as it well could in the coming months, protestors from the huge poverty-stricken barrios of Greater Buenos Aires would soon start swarming into Mauricio Macri’s territory on their way to May Square, as they did back in 2001 when the Peronist chieftains decided the time had come to evict president Fernando de la Rúa, a Radical they accused of right-wing deviationism, from the Pink House. Cristina assumes they would blame Scioli for whatever hardships are in store for them. She could be mistaken: by pledging allegiance to her time after time, Scioli has cunningly let it be known that the buck stops not with him but with his supposedly all-powerful boss.

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