A crack-up waiting to happen
Financial ventures, such as the one involving the late Silicon Valley Bank which catered for technological start-ups, can come apart with quite astonishing speed; apparently, it took only 80 seconds for the California-based entity to turn from being a viable concern with plenty of money into a pile of wreckage. It would seem that nobody important saw what was coming or, for that matter, knows whether it was just a minor accident that will soon be forgotten or the start of something really serious that will have worldwide repercussions. As we are frequently reminded, when it comes to making predictions, financial experts are about as useful as the Etruscan haruspices who claimed to get a glimpse of the future when sifting through the entrails of the animals they sacrificed.
The same cannot be said about what is happening to Argentina’s economy. For many years it has been unpleasantly plain to anyone with a modicum of common sense that, unless some drastic measures are taken, it will end up on the trash heap, leaving survivors to pick through the ruins in search of what they would need to stay alive for a bit longer.
A few days ago, the official annual inflation rate topped 100 percent. No doubt it will continue to rise; since slowing it down would require a large amount of political will, a commodity which these days is in short supply in official circles. It could easily reach 200 percent or more before the year is out.
Unfortunately, Peronist governments have always been prone to cave in to inflationary pressures. They feel obliged to pretend that Argentina is far better off in financial terms than she actually is because otherwise they would have to resign themselves to managing scarcity, which is something they staunchly refuse to contemplate. If Economy Minister Sergio Massa were to attempt to bring public spending into line with the available resources, he would get mugged not just by diehard Kirchnerites but also by relatively sensible Peronists who need government funds to stay in business.
Massa himself must be well aware that it is government overspending, made possible by the printing of a phenomenal number of banknotes, that is driving inflation skywards, but his boss, Cristina Fernández de Kirchner, refuses to believe it. In her view, thinking such thoughts is reactionary, something typical of monetarists and other vermin, and therefore cannot be permitted. When accepting an honorary doctorate in Río Negro last week, she said as much. Along with her obedient followers in La Cámpora, an intellectually challenged organisation which specialises in acquiring well-paid public sector jobs for its members, she makes out that “redistributing” whatever money can be found among the poor who happen to provide her with her electoral base, and forcing businessmen to operate at a loss, should be more than enough to solve the problem.
Until Cristina and those individuals who cheer her every utterance are sidelined, the economy will continue to pick up speed on a journey that is bound to end with an almighty crash. The Kirchnerites want to delay the day of reckoning until they are safely out of office and can then blame the disaster on the fiendish Mauricio Macri they assume is backed by a heartless neoliberal cabal with links to foreign speculators and the International Monetary Fund. If they get away with this, as they imagined they could until February, when inflation surged ahead at an even faster rate than before, but are now beginning to have their doubts, they would have a good chance of returning to power four years later or even sooner.
According to many Kirchnerites, Macri and those who in any way can be associated with him belong to the same political movement as did the military men who ruled Argentina between March 1976 and December 1983, while they themselves are the spiritual – and in some cases biological – heirs of the Montoneros who sought to sweep the “oligarchs” aside and establish their own “progressive” dictatorship. This means that they feel entitled to go to virtually any lengths to oppose them and, while about it, treat the country as a battleground in which the fate of the non-combatant population is of little concern. They are certainly more worried by the possibility that in the polls they will suffer a wipe-out than by the tremendous harm they are doing to the many millions of men, women and children who, as a result of their efforts, will spend the rest of their lives below the poverty line.
At the start of the year, when those who could afford it were enjoying their summer holidays, it was widely assumed that the economy would remain in one piece until the next government had been voted in and was ready to take office. But then inflation picked up steam, the leaders of organisations allegedly representing the poor started making increasingly aggressive demands, and it was realised that the prolonged drought which had a devastating effect on farming would deprive the country of at least US$20 billion.
All this, combined with government infighting in which Kirchnerites are attacking the hapless president Alberto Fernández – who knows that were he to call it quits too soon, what little power he wields would vanish entirely and therefore insists he has a chance of getting re-elected – has raised the possibility that the current order could collapse well before October finally arrives.
Opposition politicians are in two minds about what could very well happen in the coming weeks. While a Kirchnerite implosion would certainly suit them, it could make them responsible for handling an extremely volatile situation before they have had time to put their own divided house in some kind of order. They must also take into account the possibility that, should the Peronists manage to replace Alberto’s administration with a short-lived caretaker government, it would confront them with the risk that, merely by restoring an illusion of stability, it could deprive their Juntos por el Cambio coalition of the clear-cut electoral victory they think should be theirs.
Of course, to succeed in this, the Peronists would have to ensure that Cristina and her adherents remained nowhere near the centre of power, since their proximity to it has had much to do with Argentina’s wretched international reputation, but they include in their ranks individuals who, when it comes to getting rid of potential losers, can be as unsentimental as any Conservative in the United Kingdom. If convinced that two decades of Kirchnerite hegemony over their movement is about to come to an end, they can be relied on to do whatever it takes to make sure they do not get dragged down with it.
Adiplomatic spat between Ecuador and Argentina escalated Tuesday after it was revealed that María de los Ángeles Duarte, a convicted former cabinet minister who had been living in the Argentine Embassy, had escaped from Quito to Venezuela.
Duarte, who served under former president Rafael Correa, has been sentenced to eight years in jail for bribery, but had been holed up in Argentina’s Embassy since August 2020 with her son, whose father is Argentine.
Argentina had offered Duarte asylum, but Ecuador refused to grant her free passage out of the country.
Duarte “was present in the Argentine Embassy in Caracas” from 11am on Tuesday, Argentina’s Foreign Ministry said in a statement, without giving any details of how she had managed to escape to Venezuela. Ecuador reacted angrily, summoning Buenos Aires’ representative in Quito, Ambassador Gabriel Fuks, to explain what it called inconsistencies in the Embassy’s explanations of how Duarte had escaped and for refusing to hand over video surveillance footage from inside the compound.
Quito then declared Fuks persona non grata and recalled its own ambassador to Argentina for consultations. Buenos Aires then followed suit, recalling its ambassador from Quito and saying it would also expel Ecuador’s ambassador Xavier Alfonso Monge Yoder.
On Monday, Argentina’s Foreign Minister Santiago Cafiero told his Ecuadorean counterpart that Duarte had “escaped without the knowledge of staff” there.
Duarte then fled Quito, entered Venezuela and presented herself at the Argentine Embassy in Caracas without saying how she had arrived there or whether she had been accompanied by her son, a statement by Argentina’s Foreign Ministry said.
It added that Duarte “said she has no intention of travelling to Argentina in the short term,” although she “made inquiries about documents” that the country could offer her.
“We feel that good faith has been violated,” said Ecuadorean Foreign Minister Juan Carlos Holguín at a press conference, calling his government’s decision to expel Fuks “difficult and sad.” For its part, Argentina’s Foreign Ministry said it received Ecuador’s “incomprehensible decision” with “surprise and deep sadness.”
Duarte was convicted alongside Correa, who was president from 2007 to 2017 and a strong ally of Argentina’s former president Cristina Fernández de Kirchner, and other former government officials for corruption in relation to a request for bribes worth almost US$7.6 million in return for state contracts, according to the public prosecutor’s office.
Correa, who has been granted asylum in Belgium, where his wife was born, claims to be the victim of political persecution.
Holguín told reporters that he was confident “relations can be rebuilt” between his country and Argentina through dialogue.
Holguin and Duarte.
Yesterday was Saint Patrick’s Day, as an increasingly globalised March 17 always has been and always will be, but ever since 1992 the exuberant carousals have had to co-exist with an appalling tragedy in Argentina at least – the terrorist car-bomb destruction of the Israeli Embassy.
The shock of that horrific event remains unique beyond the numbers. More people had died before (the 71 football fans crushed at River Plate stadium in 1968 or the 39 killed in the La Tablada military uprising in 1989, quite apart from the slaughter of thousands in more measured doses throughout the 1970s) and more people have died since, not least the 85 perishing in the next anti-semitic bomb blast at the AMIA Jewish community centre 28 months afterwards with both terrorist outrages quantitatively eclipsed by the 194 young lives consumed in the Cromañon rock club blaze in late 2004, but that first jolt of stunned disbelief can never be repeated. Unlike the above tragedies, the death toll remains unclear today with the numbers of 22 and 29 both given by official sources – there were so many bits of bodies from the blast that assembling the body bags became a mission impossible with the final figure disputed to this day.
As it happened, these two sides of March 17 directly overlapped that day. The blasted Israeli Embassy on Arroyo and Suipacha was then flanked by the Irish and Romanian Embassies with the former closed for Saint Patrick’s Day. An Irish diplomat was bussing to a community event in Rosario and just two minutes into his journey, while still pulling out of Retiro terminal, he suddenly saw a huge mushroom cloud rising above the area he knew so well. “Oh my God, that’s my embassy! How could the IRA have reached Buenos Aires?” he thought. With no mobile telephones in those days he was stuck with that worry throughout the journey to Rosario before learning the news.
The shock was all the greater for its context towards the end of perhaps the calmest summer in a quarter of a century. Neither the bloodbaths of the 1970s followed by the 1982 South Atlantic war nor the 1983-1989 Raúl Alfonsín presidency ending in hyperinflation with its
1985 juntas trial (the subject of the film denied an Oscar last Sunday) and carapintada Army mutinies persisting through to 1990 could be called uneventful. But the convertibility introduced on April Fool’s Day, 1991, was finally clicking after a slow start, ending two years of four-digit annual inflation and giving Carlos Menem a comfortable midterm victory the previous spring. Life in Argentina was becoming almost boring – so much so that the foreign correspondents were starting to abandon an expensive city bereft of any interesting news.
A hard-won mood of complacency so rudely shattered. Nobody could understand what had hit them. A half-baked theory was widely circulated (persisting until today) whereby the atrocity was an Iranian reprisal for Menem contributing a couple of tiny corvettes to the 1990-1991 Gulf War fleet. Every reason to suspect the Islamic Republic of Iran, of course, but this motive made absolutely no sense – Saddam Hussein had slain almost a million Iranians in the then recent 1980-1988 Iran-iraq war so why on earth should Tehran be angry with Menem for joining the international alliance to take Saddam out (unless they thought he should have contributed more)? The almost universal credence given to this interpretation shows vast ignorance of the Middle East. As it happened, I perhaps had more reasons to suspect Iran than most without then realising it. In 1991 the Buenos Aires Herald newspaper (of which I was then co-editor) embarked on a marketing strategy of covering the national days of every country with a Buenos Aires embassy in the form of interviewing their diplomatic representatives, while plugging related companies and chambers of commerce for ads – there was to be blanket coverage of all nations in the first two years before shortlisting the most worthwhile. Since Islamic Revolution Day falls in February, that month in 1992 found me dropping into the Iranian Embassy on Figueroa Alcorta for the corresponding interview (the notorious Mohsen Rabbani, posted at the Embassy for almost 15 years, was among my interlocutors). I was made to wait a good half hour in the entrance lobby before being admitted for my interview and during that period there was an almost incessant entry of huge crates accompanied by a lot of nattering in Farsi. “The biggest diplomatic pouch I’ve ever seen in my life,” I said to myself at the time without giving it any further thought and to this day I cannot really believe that they could have been so open but who knows?
The Herald had a far more direct contact with the tragedy in the form of my co-editor Nicholas Tozer visiting an Embassy attaché Rafael Eldad (who rose to be ambassador in the following decade) in the late morning of March 17, 1992, thus escaping death by a couple of hours. My own thoughts at the start of that day were much more frivolous, centred on how I could best honour my Liverpool Irish grandmother by getting as drunk as possible that evening.
One mass reaction to the atrocity was the facile phrase: “Todos somos judios (We are all Jews),” a laudable sentiment with which I have never been comfortable as cheaply robbing the Jewish people of their special victim status by seeking to share it. While this atrocity happened on Argentine soil with Argentines and even some citizens of neighbouring countries also perishing, such innocent bystanders were never the target of the terrorists whose sick minds were bent on the extinction of the Jewish state – we must concentrate all our sympathy on the Jewish people instead of drifting into any self-pity.
The impunity for this horror has not gone away but neither should the memory.
Since 1992 Saint Patrick’s Day has had to co-exist with an appalling tragedy in Argentina at least – the terrorist carbomb destruction of the Israeli Embassy.