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 controversialHand 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.

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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.

Historic loss to Chile

It seemed as though there were 22 Chileans on the field to Argentina’s 11 during last night’s World Cup qualifier played in Santiago.

The Chileans were on top of the Argentines from the beginning, interrupting their passes and taking their marks. The home crowd was a sea of red t-shirts urging Chile to end the decades-long losing streak against its neighbour and rival, and the players looked as hungry as could be. The only hope for Argentina was that playing such an intense game would wear the Chileans out half way in.

The Argentine team looked like a bunch of superstar players that had gotten together for a friendly reunion. It was hard to detect any strategy. Messi barely got a chance to perform his usual dart-and-shoot goalmaking magic. Riquelme’s presence (denied due to a yellow card during the weekend’s messy but ultimately victorious game against Uruguay) was sorely missed, with Messi acting as playmaker and Agüero stuffing up the scarce opportunities to score. Some players were unusually useless – Cambiasso took the prize there – but on the whole, hopeless and pathetic. They didn’t even look like they were trying.

And the Chileans didn’t get tired, not one bit. They scored a goal in the first half and didn’t give Argentina any chances, while the Argentines were beyond creating any.

The win was delicious for Chile – rivalry with their neighbour is always vigorous, and they haven’t beaten Argentina in 35 years. Also, Chile failed to qualify for the last two World Cup tournaments, and this puts them closer to competing in South Africa in 2010.

“Chile was the superior team, there are no excuses,” said Coco Basile, Argentina’s coach.  “They beat us well – they beat us in every corner of the field… They were just a running machine. It was impressive.”

One minor salve for Argentina’s hurt pride may be that Chile’s coach, Marcelo Bielsa, comes from the other side of the Andes. But the fans and the sports writers here are inconsolable. They’ve been disappointed with their team’s lacklustre performances of late. Even in winning matches against others in the South American pool, the selection has lacked sparkle, seemingly devoid of a common sense of purpose. The sports columns are wondering whether the team is suffering from one of the national illnesses – excessive individualism. It does seem sometimes, watching them, that they’re a bunch of stars without a constellation.

Beauty prize for the match goes to Matías Fernandez of Chile, who did a great job on the field while adorning the scene with his delightful curls.

Bad times for ex-presidents

The scandal that has haunted Carlos Menem since his presidency ended in 1999 will finally be aired in court when the ex-president (and current senator for La Rioja province) will be tried for his part in a secret arms deal that saw weapons sold illegally to both Croatia and Ecuador between 1991 and 1995.

Does this man look like a crook to you?

Does this man look like a crook to you?

The oral trial will be a drawn-out process, with 41 accused under investigation in the matter. Among them is ex-economy minister Domingo Cavallo.

Menem is accused of having signed three secret presidential decrees permitting the illegal arms sales. According to the accusations, Menem knowingly broke a United Nations arms embargo to aid Croatia in its fight against Serbian forces in the early 1990s. He then used the same trafficking network to send arms to Ecuador during a 1995 border dispute with Peru. Many Argentines find it particularly mortifying that Argentine weapons were sent to support Ecuador – not only because Argentina was acting as a mediator between Ecuador and Peru, but also because Peru was the only South American country to stick up for Argentina during the 1982 Falklands War.

Menem has eluded justice over the accusations for some time, and the question some are asking, though, is why now? Menem was detained and placed under house arrest on the same charges on 2001 but was acquitted (in a less-than-transparent process) due to lack of evidence. A case of double jeaopardy? And if not, why has the case taken seven years to be revisited? The timing has some saying it’s the Kirchners taking revenge on Menem – a fellow Peronist – for voting against their grains tax bill that saw farmers strike earlier this year. They do seem to have the power to turn – and halt – the wheels of justice, and the courts’ vigor in the case against Menem is a stark contrast to its lethargy when it comes to examining accusations of corruption against several serving Kirchnerite functionaries. In any case, when he stands trial this week, he will become the first democratically elected president in Argentine history to suffer such an indignity.

Ex-members of the military junta, on the other hand, have been seeing the pointy end of justice ever since the return of democracy in 1983 and it has only gotten pointier since the Kirchners have been in charge.

On Friday, ex-dictator, former president General Jorge Videla was moved from house arrest in the leafy and civilised Buenos Aires neighborhood of Belgrano to a military prison in the Campo de Mayo, just outside the capital.

Videla was convicted of crimes against humanity when Raúl Alfonsín, the first democratically elected president to follow the dictatorship, set up tribunals to judge the ex-military rulers. Videla enjoyed a few years of freedom after Menem handed out pardons for ex-repressors in 1990, but those pardons have been overturned by the Kirchners and since last year Videla has been stuck at home, much like any other 83-year-old man who finds himself heartily unloved by the majority of his neighbours and fellow citizens. But now instead of growing old and dying among family, he will be in prison – on the very site where many Argentines found themselves illegally held and tortured under his authority during the 1970s.

While serving out a life sentence, Videla faces further charges and will be called to give evidence in a number of pending cases, including an investigation into the widespread practice of “baby theft” – the policy of misappropriating the newborn babies of illegally imprisoned women, who were later “disappeared” and their babies illegally adopted by military families. He also faces kidnapping charges and is being processed for having participated in “Plan Condor” – a clandestine scheme by which the military governments of several Southern Cone countries (backed with training and tacit approval from the USA) helped each other by swapping illegally detained prisoners and exchanging information obtained under torture.

As for slippery old Menem – his get-out-of-jail-free card is still valid for a while. Serving senators are protected from imprisonment (possibly the main reason Menem has sought to prolong his political career), so even if found guilty, he buys some time until his term ends in 2014.

US crisis hits Argentina

As the world awaits news of whether the US government will step in to rescue the global financial system, South American nations – including Argentina – are already feeling the effects of the crisis.

President Cristina Kirchner initially ventured to assert that Argentina would remain largely untouched by the crisis. While claiming this economic sturdiness as some kind of achievement of hers, it’s really just due to the fact that credit plays such a small role in Argentina’s economy, where people buy houses in cash and relatively few have access to credit cards.

But the country is already learning that their president was quite mistaken. Soy – one of Argentina’s most important exports – has already fallen to US$384 per tonne, a drop of 35% over the last two months. Given the government’s high (and controversial) export duties on grains, including soy, which is taxed at 35% of export sales, this will have a serious impact on revenues next year – some say the government will gather up to 10 billion pesos less in 2009.

Meanwhile, inflation is still putting pressure on consumers – and despite the fact that official statistics downplay the inflation rate, it’s also making it hard for the government to rein in public spending. Already the government has had to cut energy subsidies and raise tariffs on services, but some say in the new year public infrastructure projects will also be affected.

Neighbouring economies will also affect Argentina’s economic health. There are fears that if Brazil’s growth slows, Argentina’s exports to its major trading partner will drop, while Argentine business is nervous about Brazilian imports flooding the local market.

And of course credit – hard enough to get in Argentina – will become even tighter, with mortgages only offering variable rates. Argentine consumers will, like others elsewhere, put major purchases on hold and cut overall spending while they wait and see what happens.

All of this throws in doubt the capacity of Argentina to make good on bold plans to pay its debt to the Paris Club and to strike a deal with those still holding Argentine bonds that were subject to the country’s 2002 default.

The Kirchners have benefited extraordinarily well from a rapidly growing Argentine economy, overhwlemingly driven by high commodity prices. With the US economy going into recession, the US will buy fewer products from China, slowing that country’s growth and causing a drop in demand for Argentina’s soy and other food products. The Kirchners have every reason to be nervous.

More details on suitcase scandal as Argentina scores poorly on corruption index

For the third year running, Argentina has has been placed among the world’s – and the region’s – most corrupt nations, just as fresh details are emerging about dodgy campaign financing between Hugo Chavez and president Cristina Fernández de Kirchner.

On Monday this week, Transparency International released its Corruption Perceptions Index, where Argentina scored 2.9 on a score of 1-10, where 10 is the cleanest and 1 the most crooked. In the by-country ranking, Argentina came 109th among 180 countries, with squeaky-clean Denmark, New Zealand and Sweden at the top and basket case Somalia at the bottom.

Following hot on the tails of this bad news came further details in “Valijagate” or the suitcase scandal that’s besetting the Argentine and Venezuelan governments. The suitcase bearer, Guido Alejandro Antonini Wilson, testified yesterday in a Miami court that the US$800,000 he was carrying – which is said to have been illegal and undeclared campaign finance from Hugo Chavez to Cristina Kirchner – was only part of the story and that a separate suitcase on the same plane contained a further US$4 million.

The steady flow of details from the Miami hearing is casting a shadow over Kirchner’s triumphant trip to New York, where she’s been promising to pay off debtors and giving the US a lesson in economic management (see previous post).

Corruption is a serious human rights issue, according to Transparency International chair Huguette Labelle – as serious as life and death when money for basics like medicine  and clean water is in play.  “The continuing high levels of corruption and poverty plaguing many of the world’s societies amount to an ongoing humanitarian disaster and cannot be tolerated,” she said. “But even in more privileged countries, with enforcement disturbingly uneven, a tougher approach to tackling corruption is needed.”

Of Argentina’s Latin neighbours, Chile and Uruguay scored best with 6.9 and a rank of 23 (the same ranking and score as France, and just three spots behind the USA, which scored 7.3 and was placed at no. 18 on the list). Colombia scored a 3.8, Peru and Mexico 3.6, Brazil 3.5, Bolivia 3.0, Ecuador 2.0 and Venezuela 1.9.

Delia Ferreiro Rubio, president of Poder Ciudadano (or “Citizen Power”), an Argentine anti-corruption NGO, said she wasn’t surprised at her country’s poor score. “We still don’t have a law guaranteeing public access to information, our public contracts lack transparency, there’s a large degree of discretion in the distribution of public resources and there’s shady financing of political campaigns,” she said.

Transparency International’s CPI (Corruption Perceptions Index) is a composite index that draws on different expert and business surveys to measure the perceived levels of public-sector corruption in a given country.