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December 13, 2017

The week

Friday, July 28, 2017

De Vido withstand, united we fall

The vote in Congress concerning Julio De Vido dominated much of the political week.
The vote in Congress concerning Julio De Vido dominated much of the political week.
The vote in Congress concerning Julio De Vido dominated much of the political week.
By Michael Soltys / Senior Editor

The culmination of the month-long offensive to oust former Federal Planning minister Julio De Vido from his parliamentary seat was the week’s dominant story by far but will be given relatively short shrift here. A non-starter always heading towards a defeat foretold, its urgency was entirely artificial (read electoral) — otherwise there would be no more reason to give it priority now than at any time during the 14 years since De Vido began his shady national career manipulating public works contracts.

This drive was born out of the election campaign and perished partly for that same reason. A very obvious attempt to replace a stuttering economy with Kirchnerite corruption as the main campaign issue, this electoral timing also played against it — many opposition deputies who had helped give Mauricio Macri’s minority government a remarkably smooth parliamentary ride last year now felt obliged to revert to opposition mode when running for re-election.

Nor does everybody find it easy to vote against the man who knows too much, as De Vido was at pains to spell out in his 20-minute defence — when taking responsibility for “everything we did during those years,” he identified the “we” with a list including “the governors and mayors who accompanied me” and “many of you” in reference to his fellow-deputies. The Macri government could always have cut deals with provinces like Misiones and Santiago del Estero but even reducing the De Vido vote to a Peronist and ideological rump would not have reached the required two-thirds majority while sacrificing any claim to moral superiority by fighting corruption with corruption.

If President Michel Temer can survive in Brazil, why not De Vido here? Political complicities run deep in both countries.

But this electioneering stunt taking priority over the huge legislative backlog of Congress does not deserve any more space — in any case an extended editorial on page 15 offers more comment on this issue.

OFF THE HUSTINGS

Campaign news has now acquired its own section (page 10 this week) and so is temporarily banished from this column. This narrows the field considerably — indeed the whole De Vido ouster attempt viewed above could be very legitimately labelled as “campaigning” and moved from this page as well.

The news week since last Friday’s column began with the Mercosur summit in Mendoza, from which we did not expect great things — nor did they emerge. If Congress this month has largely been obsessed with the non-starter of De Vido’s expulsion, the Mercosur summit seemed equally obsessed with Venezuela’s expulsion rather than any Southern Cone agenda. The leftist “counter-summit” shadowing the event was just as single-issue with a knee-jerk defence of Nicolás Maduro.

Last Friday the International Centre for Settlement of Investment Disputes (CIADI in its Spanish acronym) ordered Argentina to pay 320 million dollars for irregularities in the 2008 nationalisation of Aerolíneas Argentinas (if indeed nationalised it was) — a substantial increment of the original one-peso price tag (see the editorial on page 16 for further comment).

Nothing too much happened over the weekend apart from the provincial elections in Chaco (which can be described here on the grounds that they are post-campaign). These did not offer any clear trend to dispel the prevailing nationwide uncertainty over next October’s results. The ruling Peronists (who called their front “Chaco Deserves More,” which seems a much better name for an opposition than a government list) won but undershot their PASO primary performance in early June (when they could combine 11 different lists) — as a consequence they dropped a seat to move to 18-14 over the mostly Radical Let’s Change opposition instead of the previous 19-13 in the 33-seat legislature. Just one other seat as before but now a different party — instead of Margarita Stolbizer’s Progressives, the odd man out now corresponds to the PO Trotskyists.

This might serve as a reminder not to underestimate the far left in these elections — when offered the choice between corrupt Kirchnerism and the genuine article, many Argentine leftists might well opt for the latter. If so, the government might feel that this week’s frustrated offensive against De Vido was not entirely wasted.

Beyond campaign activities and the persistent lobbying to evict De Vido, Monday’s main news was confirmation of a Defence Ministry purge in the Official Gazette. The minister until now, Julio Martínez, is now running in his native La Rioja and has been replaced by fellow-Radical Oscar Aguad, whose Communications Ministry was recently dissolved. Even though they are both Radicals, they have been unable to maintain any continuity in the Ministry’s senior staff with a complete overhaul announced on Monday. If there is so little overlap within the same party, whither harmony in the multipolar Let’s Change coalition?

For the rest of the week until now, the De Vido battle hogged the limelight with the main news otherwise mostly coming from the labour front. On Tuesday Cresta Roja poultry plant workers blocked an Ezeiza highway and succeeded in having 51 lay-offs reversed the next day. On the same day as the vote over De Vido’s presence, Congress was the scene of a renewed march by workers made jobless by the relocation of the Pepsico snacks plant — the marchers jostled with police but obtained no joy, unlike their Cresta Roja counterparts.

Behind the scenes the long-fragmented CGT labour umbrella seems to be moving closer to unity as Macri changes gears from somewhat uncritically paying off alleged union-run healthcare scheme arrears to a campaign rhetoric of denouncing “labour mafias.”

IT’S THE ECONOMY, STUPID!

For those who think that the electorate will not necessarily be herded into voting along “honesty versus corruption” lines but will be guided by bread-and-butter issues as usual, the economic data offered some solace in the form of the 3.3 percent growth figure posted for May by INDEC statistics bureau — the highest growth rate of the entire Macri presidency and reassuringly close to the 3.5 percent promised for this year by the 2017 budget. But when measured against its recessive counterpart of the previous May (-3.1 percent), it is merely a rebound.

The accompanying trade figures were even less encouraging, apparently vindicating the more protectionist arguments of the opposition — the trade gap of 2.6 billion dollars is the highest since 1994, the result of exports only creeping up fractionally while imports surged fully 13 percent (15 percent in June). Yet the good news and the bad news is often mixed together —thus incipient recovery in Brazil enabled manufactured exports to pick up substantially (by 12.4 percent) for the first time in years yet the boost to the binational auto pact simultaneously caused the import of car parts to soar by 40 percent. The import of capital goods has increased a healthy 17 percent (a positive sign of investment in the productive sector) but the influx of consumer goods from abroad has risen almost as strongly, by 16 percent — bad news for local manufacturers, especially in the electorally strategic Greater Buenos Aires industrial belt. Agriculture and construction continue to be the fastest-growing sectors.

But the main economic headlines tended to go to a volatile dollar, as throughout this month. The government continues to profess indifference to these fluctuations as the natural consequence of a floating currency but there are growing signs of intervention lest the greenback have its usual effect on prices in the midst of the electoral campaign (although Treasury Minister Nicolás Dujovne disowns any such possibility). But one reason this year’ export growth has been so weak is that many farmers have been holding off the sale of their harvest in the face of a static dollar — now that it has risen by some 10 percent, we might see some of these postponed export dollars entering the market and restoring balance. Having said this, another reason for the minimal percentage rise is the basis of comparison being the first harvest of the Macri presidency with rural enthusiasm over the change of government at its height.

One news item drawing frequent comment over the last week was that Argentina has the most expensive milk in the world after Canada.

The stated price of US$ 1.55 per litre (which is higher than the prices in this columnist’s neighbourhood, anyway) is all the more striking considering that dairy producers are struggling to make around 30 cents a litre (unlike their brethren in Canada, who fetch a good price keeping their industry viable). Opinions differ as to what accounts for this fivefold difference — is it transport, taxation, middlemen, Argentine labour costs or some other factor?

Anyway the Rural Society farm show in Palermo is due to be officially opened by President Macri tomorrow (just before it closes, as usual) so presumably farming news will continue into next week’s column.

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