New Yorker mag as mystified as porteños over change shortage

This week’s New Yorker uses the Buenos Aires small change shortage to illustrate the key role confidence plays in any economy: Argentines are hoarding monedas in anticipation of never being able to gather enough coins for the bus, while US financial institutions are withholding credit in anticipation of defaults – which leads to an even greater scarcity of coins/credit. The BA coin crisis is something we reported on back in October 2007 with this video on Current TV, and later on Argentina Reporter with this post in April 2008.

When Cristina met Kev

Here you see Australia’s Prime Minister Kevin Rudd on the receiving end of some of Cristina Kirchner’s famous French-polished hand gestures during the G20 summit. What ever can they be talking about?

Maybe Cristina is asking Rudd the question so many Argentines ask when they meet an Australian: Why is it that the two countries – both of them young, with vast resource-rich territories and a small, urbanised and educated population – have met with such distinct destinies?

How did a former penal colony that never even had the gumption to boot out its colonisers, whose people don’t even know how to build a decent barbecue, make a fortune on farming and mining while Argentina, with its sophisticated folk, its beautiful capital whose Hausmann-esque boulevards are lined with beaux-art palaces, go from one of the world’s richest countries in the early 20th century to one of its most dependable basket cases?

I’ve never known quite what to say when taxi drivers have asked me this, which is lucky, because taxi drivers in Buenos Aires don’t want to hear your theories – they want you to hear theirs.

It’s because Australia is full of English people! English people are much, much better than Spaniards and Italians! Did you know – the English tried to invade Buenos Aires in the 1800s and what did the Argentines do? Stepped onto their balconies and poured boiling oil on the heads of the passing soldiers! We’ve never stopped regretting it!

I have heard this sorry tale of self-loathing in at least ten taxis.

Argentina is a long way from Australia. It’s unlikely Kevin spends much time studying the vagaries of its crazy political scene run by shameless crooks, mediocre opportunists and unrepentant bullies, with a pathetic opposition shouting weakly from the sidelines. If he did, though, it’d probably remind him a lot of New South Wales.

Argentines stockpiling cash in anticipation of crisis

Argentines, mistrustful of their government and fearful of what a global slowdown could mean for the local economy, are back to hoarding dollars, according to the New York Times:

Argentines are pulling money out of the country’s banking system at a pace that has alarmed some economists, stoking potentially self-fulfilling fears of another crippling default on international debt that could bring Argentina’s seven-year economic expansion to a screeching halt.

The Grey Lady’s report didn’ t go unnoticed in Argentina, where La Nacion, the national paper that’s highly critical of President Cristina Kirchner, noted the Times’ sharp criticism of her government, which it said compared poorly to that of Chile’s Bachelet and Brazil’s Da Silva, both of whom took better advantage of the commodoties boom to put away savings for the hard times that are now upon us.

We Vote, World Reacts // Current

Here’s a video from Current TV with a selection of reactions to Obama’s victory – including some filmed in Plaza Dorrego, San Telmo, just a few blocks from Argentina Reporter HQ (that is, my house). Our Argentine wins the prize for most simpatico.

Cristina congratulates Barack

President Cristina Kirchner was quick to congratulate president-elect Barack Obama on Wednesday, sending a letter that read “many will congratulate you for having been able to interpret the hopes and dreams of the American people. I join them in these more than deserved demonstrations of admiration. Nonetheless, this new epoch that begins today in your country is, more than anything, a great moment in epic struggle against discrimination…”

The letter, which was extremely warm, betrays CFK’s hopes that the tide of history is turning her way: neo-liberal capitalism is falling and an ex-activist – a black one, at that – has made it to the White House. After taking office in 2003, her husband Nestor Kirchner began by stablising the turbulent Argentine economy – which was growing rapidly due to the high prices the country’s agricultural products were fetching in a food-hungry market – then started taking up the leftist rhetoric of some of his neighbours and allies.

Cristina casts herself as a modern-day Evita – ex-student activist, defender of the poor and anti-US imperialist (and although experts say poverty has increased under the Kirchners the government manipulates official statistics to match its narrative). The Kirchners have taken up the cause of those who wish to see the crimes of the Dirty War punished, and courts are convicting and jailing ex-military repressors on a regular basis.

Her letter likens the struggle of her generation’s activists against the country’s military dictators – and the high price it paid (around 30,000 Argentines were killed during the 70s and 80s) – to the civil rights movement in the US.

This communion of sacrifice and rebellion, of solidarity and respect for justice, is what you will find in my government and and its people in our decision to advance, without rest, towards a more free and just world.

The Kirchners are from the Peronist party, whose traditions are populist and authoritarian but which delivered hard-fought rights to Argentina’s workers and usually counts on the country’s unions and urban masses for support. The Kirchners have abused the IMF for its role in imposing neo-liberal policies in exchange for loans, which most Argentines and many economists agree helped aggravate the country’s 2001 currency crisis. In a recent address to the UN general assembly, CFK defended the role of the state in the wake of the US financial crisis, and her latest move in that direction is a controversial plan to nationalise the country’s private retirement funds.

Each day we must confront many great challenges. At the moment, the world economic crisis that is unfolding with the destructive speed of an epidemic demands audacious and innovative solutions, but also, collective action.

In this way, just as those who confronted a world war understood the importance of multilateralism, so must we, with the same nobleness and intelligence, make urgent and necessary changes to create a multilateralism that might respond to the complexities of our distinct realities.

We have a great opportunity to eradicate poverty, discrimination and inequality in our societies. As you said in your campaign, to achieve this we need better education, health and opportunities. And, without doubt, more dialogue between leaders and their people.

I know we can count on you, and I want you to know that you can count on my sincere friendship.

DR. CRISTINA FERNANDEZ

President of Argentina

Fernandez de Kirchner will soon head to Washington to the G-20 meeting Bush has convened to discuss the world economic crisis. It remains to be seen whether she and Obama see quite so eye-to-eye as she seems to imagine.

Argentine press weighs in on US elections

All eyes are on the US election, and in Argentina it’s no different, with papers carrying plenty of commentary on the suspense gripping its northern neighbour and much of the rest of the world. According to a recent Latinobarómetro poll, each of the 18 Latin American countries surveyed showed a preference for Obama. Here in Argentina the editorials haven’t been keen to endorse, but what follows is a selection of what was in today’s opinion pages.

The conservative national daily La Nacion’s Martín Kanenguiser says the Kirchner administration, unlike many other foreign governments, is sure to miss George W Bush. “Since 2003, the North American doctrine of not sticking its nose into Latin American beyond Cuba and Colombia has allowed the Argentine government to play about with an erratic foreign policy that has neither drawn it closer to the developed world nor consolidated its regional alliances beyond photo-ops at regional summits or the selling of Argentine bonds to the extravagant Hugo Chávez.”

He mentions several ways in which the Bush administration has suited the Kirchners: Bush looked away when Argentina decided not to include 70% of the debt owed to its private creditors in its 2005 debt restructure, and he didn’t press for a continental free trade agreement that both his father and Clinton had pushed (the Kirchners’ trade policies are highly protectionist). “If the next US president decides to take a more intelligent view of Latin America, maybe the Argentine governent will have to make a bigger effort to be coherent, a quality that does not abound in its latest policies,” he says.

La Nacion also carries a column by former secretary for foreign and Latin American affairs (1996-99), Andrés Cisneros, who says “the arrival of a new North American president always awakes expectations of change, but in Latin America there won’t be much news: if we want change, we’ll have to create it ourselves.” He laments the current Argentine administration’s negative attitude towards the US, which he says has seen Argentine rendered itself irrelevant to its powerful neighbour in favour of a “jurassic 21st century socialism,” and indulgence in “adolescent dreams better suited to a group of student activists than the national administration.” He says Argentina has always had a strong tendency towards anti-Americanism, which whether justified or not, has allowed successive governments to always have on hand someone to blame for the country’s failures, even when the responsibility was entirely Argentina’s.

“The US may never be a close friend of Argentina’s,” he says. “We are not strategically important for them, we have nothing they want and they fear nothing we might do to them. But they are not our enemy. We should, then, try to ensure that they are not hostile towards us, and if we can, that they are not indifferent.” He adds that while Bush has fed the often justified anti-Americanism felt in the world and Latin America, the new president will offer an opportunity to turn the page.

The irreverent national daily La Critica has a column by lefty Martín Caparrós, where he’s his usual skeptical self, asking “has the US changed or has its black population merely changed? Have those blacks who wanted to live in a different country, a more just one, free of discrimination, decided that if they can live in this one, that now discriminates much more on a class basis than on a race basis, then everything’s OK?” He reminds readers that just as voting for a women doesn’t guarantee better deals for women (he names Cristina Kirchner, Angela Merkel and Maggie Thatcher as all having failed to push strong gender equality agendas), nor will a black president guarantee equal rights for black Americans.

While admitting to having found him inspiring early on, Caparrós today bemoans what he sees as the narrowness of Obama’s vision: that the middle classes pay a bit less in taxes and that he’ll talk to North Korea and Iran “because Kissinger says it’s OK.”  “We all know,” he writes, “that the differences between Deomcrats and Republicans have to do with things that don’t matter to other countries: that rich Americans pay more or less taxes, whether abortion is permitted or not, whether gays may marry, whether schools teach that god made the world in seven days. On the larger themes, above all in foreign policy, there have never been big differences.” “I hope I’m wrong,” he writes, “but compañero Obama gives the impression of being, for us, more of the same.”

Pro-government Pagina 12 has a column by J.M Pasquini Durán, who says the new president will receive a unenviable legacy from the hands of Bush Jr, “one so grave and of such dimensions that it’s difficult to make predictions about the coming administration, one that will have to start working on the first day of the transition owing to the urgency of the situation.”

“The White House,” he writes, “will be hoping for support from a world which holds the US responsible, among other harms, for its decisive role in the warming of the globe, and at the same time its rejection of any sort of collective commitment like the Kyoto Protocol. There’s a whole library full of arguments against the conservative government that tried to steamroll anyone who disagreed with it, but these plays for power by the US president… are to be distinguished from the US people, who suffer the consequences and don’t deserve our indifference.” He warns readers: “If Obama wins, there will no doubt be change, but it would be prudent even in this case to remember that the US’s interests will be the same as they are now. What can and ought to change are their methods of pursuing them.”

Verdict in on suitcase scandal, as fresh details of shady campaign financing emerge

Yesterday, as a Miami court declared one Venezuelan, Franklin Durán, of conspiracy and acting illegally as a foreign secret agent in the US, his one-time hapless associate, Guido Antonini Wilson, went on CNN to assure that the suitcase with some $800,000 in US bills, captured by Argentine customs agents last year, was destined for the electoral campaign of Cristina Fernández de Kirchner.

Unsurprisingly, neither the judgment nor the CNN interview elicited any sort of comment from the Casa Rosada, or pink house – the seat of Argentina’s executive here in Buenos Aires.

When the scandal first broke last December, the Kirchners’ initial response was to denounce a CIA plot to destabilise their government, the president and her associates later shifted gear, accusing Antonini Wilson of being a fugitive from Argentine justice, and daring him to declare before in an Argentine court. In fact, Antonini Wilson was allowed to leave Argentina unmolested just days after the suitcase was discovered, and having visited the Casa Rosada in person. He told reporters he is more than happy to declare before an Argentine judge, and has in fact already contracted a lawyer for his defence.

Now some hope that the Argentine justice system – which struggles to assert its independence from the executive and is rife with corruption and inefficiency – will indeed open a home-grown investigation into the matter of whether Chavez illegally funded Fernández de Kirchner’s campaign.

Meanwhile, the cash-stuffed suitcase isn’t the only thing casting doubts of her campaign finance. Campaign funding has never been particularly transparent in Argentina, but after newspapers published reports that a supposed narco-trafficker, Sebastián Forza, who was assassinated in August in a mafia-style shooting, had financed her campaign to the tune of 200,000 pesos.

Now the public prosecutor is investigating “ghost donations:” several people who swear they never gave a penny to Kirchner’s presidential campaign figure on the legally required donor lists as having donated large sums well beyond their means. La Nacion has named several such ghost donors, three of wholm were registered on the same day, November 22, 2007, as having made cash donations.

Argentine football team in God’s hands

Argentina’s most beloved son, Diego Armando Maradona, is to be the new coach of Argentina’s national football team. The news comes just over a week after the team’s humiliating loss to Chile in its latest world cup qualifier, which prompted former coach Coco Basile’s resignation.

Maradona, often cited as the best player in the history of the game, is famous for his controversial “Hand of God” manouver, which resulted in an illegal but unpenalised goal against England in the quarter-final of the 1986 World Cup in Mexico City, along with the “Goal of the Century“, an amazing feat which saw him dodge and weave past six England players in that same match. While football aficionados appreciate the technical brilliance of the latter, Maradona’s countrymen are particularly fond of the Hand of God, expressing as it does, so eloquently, the national love for the “chanta” – the wise guy who cheats and gets away with it.

Maradona’s rags-to-riches story begins with a childhood spent in Buenos Aires’ slums, followed by a glittering career which saw him play for the iconic Buenos Aires team Boca Juniors, and later in Europe for the Barcelona and Napoli clubs. While playing for Naples, he was suspended after failing a doping test. He has had problems with cocaine addiction, but has lately been in good health. Argentines are hoping he is the dose of inspiration – and technical expertise – that the team needs to lift its game.

Argentine absurdity strikes again

Argentina’s wacky economic policies are making the news again, with the president succumbing to the nationalisation fever currently sweeping the capitalist world, saying she plans to have the government take over Argentina’s private pension funds.

President Cristina Fernández de Kirchner made the surprise announcement on Tuesday, in an appearance on state TV. She said that the government would nationalise all of ten Administradoras de Fondos de Jubiliación y Pensión (Administrators of Retirement and Pension Funds, or AFJP for short) that hold some $30 billion worth of investments, mostly Argentine government bonds and the and shares that represent the retirement savings of millions of Argentines.

The Economist sums up the situation nicely, echoing the lack of confidence most Argentines place in their government. What many here and abroad are asking is whether the proposed nationalisation is really a move to protect Argentines’ retirement from the vagaries of the stock market in uncertain times, or is it just a craven attempt to fill treasury’s coffers so the government can fund its election campaign in 2009?

Commentators and opposition politicians here in Argentina are extremely dubious. One opposition leader, Buenos AIres-based Elisa Carrió, said the move was an attempt to “plunder pensioners’ funds” and use the cash “to pay off debts or to amass a war chest for elections,” which will see a new Congress sworn in next year. Mauricio Macri, mayor of Buenos Aires and political foe of the Kirchners, who detect presidential ambitions in the millionaire ex-manager of the Boca Juniors football club, says the move would be a “criminal mistake” and has urged all citizens and opposition leaders to pay close attention to what’s going on.

The government, which appears to prefer improvisation over careful planning, is in an increasingly dicey fiscal position, with revenues dropping dramatically following the fall in commodities prices over the last few months. Some estimates say the weakening demand for Argentina’s agricultural products could see the government short by as much as USD$6 billion next year.

Many say the plan to nationalise pensions is sure to result in a drawn-out conflict which will see the government rely on populist rhetoric to justify the state takeover while heaping abuse on the “selfish” urban upper- and middle-classes who resist any effort that would see their wealth distributed more evenly. This is pretty much the same song sheet Cristina’s used during the debate over her attempt to impose a hefty tax-hike on farmers that saw the country divided strongly along ideological lines, with farmers staging a 100-day export strike earlier in the year. The measure was ultimately defeated in Congress, where Kirchner’s own party members – and, dramatically, her vice president – voted the bill down. The new proposal to nationalise retirement funds is also likely to meet with strong opposition across all party lines in the Congress but whether it will again split Argentines along the traditional – but arguably irrelevant – ideological divide remains to be seen. The president has lost considerable political capital over the course of the year and accusations of corruption like those being aired in the Valijagate suitcase scandal point to an extreme lack of transparency in her government.

Even lefty columnists, like La Critica‘s Martín Caparros, find they can’t support the move. “I couldn’t be more in favour of the nationalisation of pension funds,” he wrote on Wednesday. “Argentina needs to recover the State that was destroyed by the Peronists of the 1990s, but for this to happen the State must be and appear to be unblemished, unpolluted, cleaner than a propaganda white-wash. We all know this is not the case, and this makes it so much harder to defend certain policies.”

The private pension funds were created by Carlos Menem’s neo-liberal (but Peronist in name) government in the ’90s after years of poor management of retirement funds by successive Argentine governments which left the savings exposed to economic turmoil like hyper-inflation as well as the risk that they’d be sacked by crooked or incompetent politicians. Around 85% of workers took up the offer from private funds, and though the funds’ performance has fallen far short of perfect it’s not clear that their investors will feel confident with the government taking over.

The news saw the local share market, the Merval, sink by 18 points on Wednesday, to its lowest level in 20 years. But the Argentine exchange wasn’t the only one affected by the announcement. Markets around Latin America plunged after the news, which also shook things up in the mother country, where Spain’s share market dropped by 8%, its second sharpest fall for the year. The Spanish national daily, El Pais, referred to the move as an “Argentine absurdity.” Several major Spanish corporations have significant investments in Argentina, and would be affected by the move. Relations between the Kirchners and their Spanish counterparts are already somewhat strained by the Kirchners’ determination to nationalise Aerolineas Argentinas, which is owned by Spanish businesses. Despite assurances that the deal will be done above-board, with a proper takeover of shareholdings, there is so much mistrust of the Kirchners – and their government does so much talking out of both sides of its mouth – that some fear the company will be not so much nationalised as expropriated.

Coach resigns after Argentina’s hopeless performance

In an update to our earlier post, Alfio “Coco” Basile has resigned as coach of Argentina’s national football team after a string of lacklustre games that reached its nadir with Argentina’s pathetic loss to Chile last night.