November 26, 2014
Time is running out
For the Herald
Looking beyond the Chavista and Kirchnerite models
Ronald Reagan, Maggie Thatcher and Karol Wojtyla may have helped push the Soviet Union towards what one of its founders called history’s rubbish dump, but even if all three had been fervent communists it would sooner or later have ended up where it finally did because, as its rulers belatedly realised, it was programmed to self-destruct. Much the same can be said about the “models” that were put together by Hugo Chávez in Venezuela and Mr and Mrs Kirchner here in Argentina. To stay in business, both depend on a combination of political willpower and plenty of easy money derived from natural resources. As yet neither regime seems to be suffering from a lack of willpower, but now that ready cash has run out, the two of them are in deep trouble. The way things are going, they will shortly be consigned to the scrap heap.
To get where they currently are took real talent. Venezuela’s government rakes in close to a hundred billion dollars a year simply by flogging off the oil that accounts for 95 percent of the country’s exports. That should make things easy for it; all it has to do is spend the money a benevolent deity keeps shoving into its hands, but it has gone about it in such a hare-brained fashion that it faces bankruptcy. Argentina’s government is required to work a bit harder than Venezuela’s because much of its money comes from soybeans and other agricultural products and, as it soon found out, farmers can be a stroppy lot, but even so it has contrived to grab a far larger share of the national income than any of its predecessors. Nonetheless, like her hapless friend, the buffoonish Nicolás Maduro, Cristina is flat broke.
For several months Argentina’s government has been doing its best to persuade sceptical foreigners that it has learned its lesson and that from now on it will respect the international rules so it is safe to lend it money, but to keep in the graces of her more bloodthirsty supporters Cristina took advantage of a chance to be photographed chatting with Fidel Castro.
She has also made it clear that she stands shoulder-to-shoulder with Maduro. Though the lady’s revolutionary fervour has gone down well among the Kirchnerite faithful, it is unlikely to have impressed anyone else.
All good Kirchnerites, beginning with Cristina, are right to feel alarmed by what is happening in Venezuela. Foreign Minister Héctor Timerman is not the only one who suspects that the mayhem shaking that country could be a foretaste of what is in store for Argentina. The arrival of the long-awaited economic crunch has knocked Cristina and her followers off-balance. They won elections by making out that their “model” was a perpetual motion machine that would continue to go faster and faster, leaping over any obstacles put in its path by nasty conspirators, for many years to come.
Unfortunately for them and for many other people, they got it wrong. The “model” has not only slowed down: to their bewilderment, it has gone into reverse. Economists who barely a month ago told us that this year growth would be somewhere around two percent, now say the country will experience a lengthy recession. To make the outlook even bleaker, inflation is picking up steam at a disturbing rate; prophets with a soft spot for Cristina say it will be at least 35 percent, others predict something closer to 60. And then? As yet it is just a tiny cloud on the horizon, but hyperinflation could well be heading this way.
Argentina’s Kirchnerites and Venezuela’s Chavistas heartily despise economics, especially the “orthodox” variety. As far as they are concerned, it is not merely a “dismal science” but a subversive, antidemocratic one that was invented by British and North American imperialists determined to enslave decent progressive-minded people like them. This being the case, when prices go up and up, shortages of once available goods make themselves felt and capital flees in panic, it can only be the result of some wicked international conspiracy. That settled, they feel free to counterattack by persecuting shopkeepers and, in Venezuela at any rate, booting out US diplomats and gunning down “fascist” demonstrators like the rich kids who are thronging the streets of Caracas which, not coincidentally, is already one of the most violent cities on earth.
Maduro, who is evidently out of his depth, should survive unless he is replaced by a tougher and more competent comrade, because he is backed by the military and cohorts of Cuban “advisers” who like nothing better than beating up dissidents. That is one reason why his foes insist they would never dream of trying to stage a civilian coup of the kind that put an end to Fernando de la Rúa’s spell in the Pink House.
Another, and even stronger reason, is that they are well aware that were they to form a government they would have to subject what is left of Venezuela’s economy to some extremely harsh treatment that would be resisted by a huge number of poverty-stricken men and women who would blame them for the disaster.
Argentina’s opposition leaders take a similar view. They know that the local economy is already on the rocks and could easily go under, taking with it the incomes of millions of people, but they also appreciate that it would not be in their interest to do much in an attempt to avert what is coming toward them. Along with their Venezuelan counterparts, they think that in the long run, if not in the short one, it would be better to let events take their natural course, even if that does mean standing aside while their country races faster and faster towards a brick wall.