Argentina: Defeat was not Only Macri's, but of Neoliberalism and IMF. How to get out of this Quagmire?

By Aram Aharonian

The defeat of the neoliberal restoration model of the International Monetary Fund and of American policies, led in Argentina by the government of Mauricio Macri, opens the possibility of new roads in a region where the collective imaginary of an alleged failure of progressive governments was imposed.

Neoliberalism trembles at the upcoming elections in Uruguay and Bolivia, which could end the festivities programmed from Washington. For the third time in less than four years of Macri’s administration, a 25% mega-devaluation caused by the government led to a storm of price increases, a breakdown in the payment chain and a lack of merchandise, both for production and consumption. The economy was paralyzed between the rise in rates and the volatility of the dollar.

The laudatory analyzes of the transnational hegemonic press became dismal farewells after the electoral debacle. The Forbes specialized magazine, the Financial Times, the Bloomberg agency, agreed that “investors” know Macri’s time is running out and there is a growing risk of default (non-payment of external debt).

It is not the first failure of the right in the region. A right that repeats the neo-liberal dogma as the only argument, ruling for “the markets” and not for the people. The enormous defeat was not only of the Macri government, it was its constituents and scriptwriters, especially the International Monetary Fund and its as yet leader, Christine Lagarde.

Not to go too far, the de facto government of Michel Temer in Brazil failed, the neoliberal restoration of Lenín Moreno in Ecuador is in crisis, the Colombian model now led by the ultra-rightist Ivan Duque, the Chilean (inherited from the military dictatorship) by Sebastián Piñera and also the unqualified Jair Bolsonaro in Brazil.

The right, however disguised as modern, has no other model than the neoliberal, destined to satisfy the interests of transnational corporations, voracious in their thirst for natural resources; of national and foreign financial speculators, preying on the environment, privatizing national companies, compromising the sovereignty of their respective countries and the fragmentation and balkanization of the region, according to the dictates of Washington.

The governments of neoliberal restoration meant for their countries an enormous economic, political and above all social retreat. A heavy inheritance that those who succeed them in the government will receive to be able to administer the riches in favor of the majority of the people, socially redistributing the rent.

The Argentine primary elections leave another lesson: the way to defeat these neoliberal governments, permanently supported by media terrorism and the manipulation of the so-called digital networks, is that of the unity of the anti-neoliberal forces, taking the fight against the policies that lead inexorably to recession, unemployment, misery. And to a debt that mortgages the future of the next generations

When the facts are overwhelming, there is no publicity, no strong and manipulative campaigns for the so-called social networks – where “Macrismo” focused much of its strategy – or media discourses that can modify the vision of the majority about reality.

The macrista error of the manipulation of the value of the primary elections (magnified their importance), earned them the paradox of turning them into the plebiscite that it was not (and the people overwhelmingly said no to the government and the model), building their own trap. Now there is talk of transition, but in reality the national elections will be held only at the end of October.

The manipulation and the armoring of the media to the governor of the province of Buenos Aires (where 37% of the electoral roll vote) did not work either. She had been constructed as an image of Heidi, of a good fairy, of unbeatableness. Including, knowing Macri’s fall in credibility, her marketing campaign made the president’s figure invisible. And she lost by 52 percent of the votes, with a differential greater than that won by the president nationwide.

Destruction and then what?

The electoral defeat of macrismo has to do with the massive rejection of the policies that were applied in these three and a half years of destruction of the social fabric, of employment, of everything that has to do with a dignified life. The reality was expressed in the votes of those excluded from the neoliberal model, which benefited only the interests of the large transnationals and the so-called red circle – the actual power – of the country.

A panel of economists at the Latin American Center for Strategic Analysis agreed that in a country like Argentina, where 75% of production goes to the domestic market, strengthening it, the Argentine economy can grow rapidly and steadily, when the neoliberal model is dismantled.

For that, the new government should call for a large price and dollar value agreement with the large members of the value chains in Argentina, starting with food exporters (grains, flour, oil, etc.) and fuel.

All these companies have strong profit margins and all invoice a part in white and the other part in black. In the domestic market, it is demonstrated that the total VAT collection is 10% of GDP (and should approach 21%) and in the external market it is demonstrated by export under-invoicing and import over-invoicing

The Central Bank must regulate (establish the rules of the game) and supervise financial institutions, so that the rise in the dollar is controlled and does not drag the certificates of fixed-term deposits in pesos. When the currency crisis becomes a banking crisis, there is no way to stop the economic skid.

Political parties with parliamentary representation, governors and even mayors of important cities should be called upon to engage in price and supply control.

Priority should be given to broad dissemination by all means of the price and supply agreements with the commitment to apply Law 20.680, which, with all its modifications, in essence allows the government to demand the publication of sale prices and availability of products on the part of the companies and empowers the ability to impose sanctions on those who discontinue the supply or provision of services or products, or who do not submit the required documentation.

Argentina already has experience in recent years. The new government, to boost the domestic market, must essentially do something similar to what former President Nestor Kirchner did as he assumed on May 25, 2003:

a) Suspend the payment of the external debt to carry out an extensive audit of it, to know why it was contracted, where it was destined, who bought foreign currency in the local exchange market, among other things;

1) Increase pensions by decree;
2) Require companies to increase workers’ salaries by at least two points more than the inflation rate;
3) Freeze fuel, electricity, water, and gas rates;
4) Require financial institutions to give a percentage of their loans to small and medium enterprises (SMEs) and regional economies.

PASO was a plebiscite, worthless as such. The elections will be on October 26. There are 40 days left and the right can hardly rebuild the social fabric. The only thing that is not clear is how Macri’s government will survive in the long term.

Winners and losers agree that it is necessary to prevent a social uprising. The delivery of power is scheduled for December 10, as long as the fleeing by helicopter that made former president Fernando de la Rúa famous in 2001 is not repeated.

Source URL: Resumen Latinoamericano

Translated by JRE/EF