WORLD WORLDWIDE ITALY ARGENTINA News Journal Update - (en) Italy, UCADI FA #180 - The Argentina enigma (ca, de, it, pt, tr)[machine translation]

 The election of the ultra-liberal and populist Milei is the result of

the tiredness of Argentine society towards the country's political
class, a prisoner of Argentine bipartisanship, the result of the right
and left degeneration of Peronism, of its ambiguities, of the
contradictory choices that accompany this particular political ideology
in economic and social matters. The country's inflation is running at
150%, poverty and inequalities are rampant, despite the fact that the
country enjoys great wealth and variety of natural resources, a
population with a high level of literacy, has a well-developed
agricultural system and a solid industrial base which makes it one of
the most developed countries in Latin America (after Brazil and Mexico).

However, the fragility of its economic structure meant that the country
was the victim of repeated speculative phenomena at the hands of
international finance, in particular in 2001, 2014, 2019, which
plundered its economic resources, bringing its economy to its knees. and
enormously reducing the terror of the population's life.
To give an idea of how much inflation has affected and continues to
affect the economic situation of the country, it is enough to remember,
for example, that at the beginning of 2014, with inflation of 28%. The
Argentine Peso suffered a 14% devaluation in a single session which
brought it to a minimum of 834 pesos per dollar, which represents the
lowest value since the crisis in 2001-2002. With consumer price
inflation growing at a rate of 30% per year, the country is perpetually
on the brink of a new financial crisis, so much so that in 2018 it asked
the International Monetary Fund for a bridge loan of 30 billion dollars
to settle the interest of short-term public debt securities. This
maneuver resulted in the increase in the cost of money, which rose to
33%, in an attempt to revalue the peso and stop international speculation.
This situation is largely due to the fact that the Argentine economy is
characterized by an oligopoly that manages the national distribution of
goods, for which the country's market is controlled by the French
Carrefour, the Chilean Disco and the Coto agenda, which determine the
prices without any real possible competition. The result is, as we said,
inflation running at 150%.
This situation is the basis of Milei's proposal for thedollarization of
the Argentine economy. Using demagogic images and paradoxical proposals
such as that of the abolition of the Argentine Central Bank, Milei
managed to create the illusion that it is possible to adopt the dollar
as the national currency, so that producers of goods and services see
their work paid in a currency solid, not subject to such devastating
inflation.

An astonished and disconcerted country

What is incomprehensible to the Argentines and that in them is one of
the countries in the world that enjoys the greatest agricultural
production and thriving breeding, in particular of cattle, to the point
that Argentina is one of the largest exporters of beef and sheep meat in
the world. The country produces soya, corn and wheat in the Pampas (an
endless flat and irrigated territory), in such quantities as to be able
to support livestock farming and export a large part of the product and
manages to allocate a substantial part of the product to a thriving food
industry. Cereals, milk and beef represent the basis of the population's
diet but it is difficult to access them due to low wages and unstoppable
inflation.
The country possesses a considerable quantity of oil and gas and a
fairly developed petrochemical industry which, together with the
production of soy and the metalworking industry, constitutes the
economic-productive base of the country; oil exports, which have
deposits concentrated in the provinces of Néquén and Bahia Blanca, are
equal to 20% of the total and only a part is reserved for the
petrochemical industry.
Argentina's manufacturing production contributes 17.5% of the gross
domestic product and, together with commerce and the public sector, is
the sector with the highest employment, followed by construction.
Argentine industry is divided into the agricultural industry, dominated
by the food and meat processing industries, while, moving on to other
sectors, the most important industry is the automotive industry,
followed by the chemical, metallurgical and finally paper industries.
The most important industrial area of the country extends from Gran
Buenos Aires to Córdoba, passing through Rosario. Other relevant centers
are Tucumán, San Luis and Tierra del Fuego. Due to privatisation, the
naval industry has lost considerable importance and jobs. The tourism
industry is quite developed but suffers from the communication
difficulties that characterize the country and which will be discussed
later.
This production system is not supported by adequate infrastructures that
allow its efficiency. Argentina was once one of the countries on the
American continent with the largest railway network which over time has
reduced its distances to 37,740 km by disposing of 12,000 km. The public
transport system has been integrated by a network of buses that travel
across the country , managed by private companies that have handed over
the country to road transport, also with regards to the movement of goods.
In a pre-election climate in September 2023, Parliament approved a bill
proposed by candidate Massa which provides for total exemption from
public taxes for income from employment for the majority of the
population, leaving the tax only for incomes exceeding 15 times the
federal minimum wage, i.e. incomes exceeding 1.77 million pesos per
month. But if the measure earned the proponent support among public
employees and those on fixed incomes, it was not enough to earn him the
favor of the most voters, convinced by Milei's proposals for total
deregulation. This imbalance, this constant disruption of the country,
the unequal distribution of wealth, generate a sense of total
frustration in Argentines, which has its origins and causes in a
political proposal incapable of addressing the problems of the
population whose deficiencies come from distant.

A country fascinated by Peronism

The colonization of the country was until the 1920s by an oligarchy made
up of large breeders and meat traders and large landowners, who managed
a rural proletariat dependent on breeding and agriculture, which was
soon joined by a workers employed mainly in the food industry and an
urban middle class made up of public employees, fueled by massive
emigration from Europe, while the economy was controlled by British and
American capital, owners of around 50% of the companies. The composition
of the peasant and urban proletariat was nourished through the
emigration, often political, of workers exiled from Europe of socialist
orientation, anarchist anarchist syndicalist and communist who brought
their experiences of struggle to the country. This particular class
composition gave birth to solid workers' organizations, including the
FORA Federation of Obrera Regional Argentina which led radical struggles
and managed to organize as many as half a million workers. Subsequently,
the Confederacion General de Tabajo (CGT) was formed. The Argentine
trade union movement led intense struggles which were only contained
through the use of dictatorial governments such as that of José Felix
Uriburu who took power in 1930.
The response of the trade union movement was not long in coming, so much
so that we witnessed harsh struggles which lasted until 1942 when, as a
result of the Ribbentrop-Molotov pact, a split occurred in the trade
union movement. Juan Domingo Peron, a colonel exponent of the Grupo de
Oficiales Unidos (GOU), took advantage of this to give life to the
justicialist movement which developed its program during his first
presidency of the Republic (1945-1955) with the ideological and image
contribution of his wife Evita Peron. His followers were called
descamisados, symbolically indicating their origin from the
sub-proletarian and popular strata of society. Peron gave life to a
syncretic and populist political movement that combines socialist
principles with patriotism, identifying fascist corporatism as a third
economic way, giving life to a form of "nationalist socialism" with a
conservative orientation from an ethical and ideal point of view.
In economics, Peronism uses Keynesian and dirigiste theories,
establishing an economic system with a strong presence of the State that
operates the mixed private-public economy regime, not disdaining the use
of five-year economic planning plans to govern accumulation. Thus,
public companies were born which, through a welfare policy, supported
the union activity of workers and private employees. In foreign policy,
Peronism was characterized by distancing itself from United States
policy in the South American subcontinent, promoting third world
positions, neutralism and non-alignment towards the two Soviet and
American blocs. The success of Peronism was favored by the economic
growth due to a very strong demand for agricultural and livestock
products from all the belligerent countries and the shift of industrial
production to areas that were not theaters of war. In the years from
1943 to 1945, Peron, allying himself with the unions, achieved what had
not been done in the previous decades of class struggle: compulsory
insurance for accidents at work and occupational diseases, the
eight-hour working day, the statute of daily workers, the thirteenth
month's salary, paid holidays, the extension of the pension system, the
official recognition of the legal status of trade unions, etc. This
policy of his meant that when his opponents tried to remove him by
incarcerating him but he managed to reverse the situation. In 1946 Perón
won the elections, with a list supported by both nationalist and
socialist trade union sectors. His Government can enjoy a favorable
economic situation, thanks to the abundant reserves of gold and foreign
currency, a positive trade balance and an expanding internal market and
thus proceed with a redistribution of wealth, which gives his regime
consensus which allows him to free himself from the support of the
left-wing and trade union forces that had supported him.
With the first five-year plan, the Central Bank and the public service
companies (railways, water, gas, telephones) were nationalized, removing
them from the control of the Anglo-American groups and boost was given
to public housing and the literacy of the poorer classes. All this,
while the 1949 Constitution recognizes the right to strike, health and
education, entrusts the State with a monopoly on foreign trade.
Peronism began its crisis with the death of Evita Duarte, Perón's wife,
who was a skilled propagandist of her husband and the movement,
personifying the regime's bond with the people. Thus in 1955 a military
coup, sponsored by the Catholic Church which did not accept the
introduction of divorce by law, deposed Perón who had to flee abroad.
 From then on, a succession of coups d'état began that would lead
Argentina towards civil war: the Peronist party was outlawed together
with the parties of the left and the communists.
In 1962 the guerrilla movement of the Montoneros, the Ejército
Guerrillero del Pueblo (of Guevarist inspiration), the Fuerzas Armadas
Peronistas and other groups were born, which in 1967 gave life to OLAS
(Organizacion Latonoamericano de Solidaridad) which encompassed all the
anti- Latin American imperialists belonging to the most diverse
political backgrounds. The economic and social decline of the
governments that followed one another in the sixties, also pressured by
the guerrilla activity of the Montoneros, paved the way for the return
of Perón in 1973 who died on 1 July 1974.

Between post-Peronism and dictatorship

This summary reconstruction of the Peronist parable makes us understand
how composite and multifaceted the Peronist influence and legacy is in
Argentine political life. The death of Perón, who was succeeded by his
second wife Isabelita, left a balkanized political system in which the
military soon entered, establishing a dictatorship and ferocious
repression. The Argentine Anti-Communist Alliance (AAA) was created
which in the period 1973-75 killed more than 400 people and " Operation
Condor " began , wanted by Kissinger, financed, planned and organized by
the United States in concert with the secret services of the States
South Americans and especially Chile where the 1973 coup had brought
colonels to power. In 1976 a coup organized by the armed forces brought
to government a triumvirate of generals, presided over by Videla and a
ferocious dictatorship began which led to the disappearance of more than
30,000 people. Those who were even simply suspected of being leftists
were seized and arrested and taken to clandestine detention centers,
tortured and often killed, the corpses hidden or dumped into the sea
with the so-called death flights of Hercules planes of the Argentine
army that unloaded people still lives in the ocean. Pregnant women were
given birth and their children were taken away and given up for
clandestine adoption to military families. The military personnel who
conducted the operation were trained in the US-funded School of the
Americas. The regime collapsed in 1982 only following the Argentine
defeat in the Falklands War which discredited the military regime.
In 1983, a democratic government was restored to the country and Raul
Alfonsin was elected president. The new government committed itself to
accounting for the disappeared , placed the armed forces under civilian
control and consolidated democratic institutions. Members of the
military juntas were put on trial. The failure to resolve the endemic
economic problems and the inability to maintain the trust of public
opinion led to Alfonsín's early abandonment, six months before his
mandate expired and effectively started a crisis in the economic
management of the country which has since remains. In 1991, to stop the
penetration of hyperinflation, the Peso-Dollar exchange rate was
imposed, the market was used, dismantling the protectionist barriers and
regulations that protected the national industry, and a privatization
program was developed. If it is true that these measures led to a
significant increase in international private investments, it must be
said that they contributed to causing the country's recession because
its economic activities were no longer protected. foreign debt
skyrocketed and unemployment, corruption and social discontent reached
their highest levels.
In 2001 Argentina was overwhelmed by a deep economic crisis caused by
the recession triggered by the Asian financial crisis of 1998 which also
led to an institutional crisis. The country was forced to admit that it
was impossible for it to meet economic commitments made with other
states and we therefore witnessed the default of its international
obligations. The pegging of the peso to the dollar was abandoned and
this encouraged the return of goods to real values, producing a large
depreciation of the peso and a frightening growth in inflation, with
consequent blockage of the economy, increase in the unemployed and the
new poor, crisis of liquidity from the system, increase in crime and
spread of acts of vandalism against banks and commercial establishments,
social instability.

Argentina's attempted economic recovery

In 2002 the Argentine economy began to stabilize coinciding with the
election of Nestor Kirchner as President, the defaulted debt was
restructured and the debt with the IMF was repaid and some public
interest companies were nationalized. Fundamental for the recovery
economic was the so-called "soy boom": the conversion of many vast
agricultural areas to the production of soy and the consequent strong
exports (heavily taxed since 2008), led to economic growth and a flow of
foreign currency, however the debt towards the foreign exchange remained
high.
For two subsequent mandates, Argentina was presided over by Cristina
Kirchner, the president's wife, who committed herself to the recovery of
the country's economy but the drop in the prices of agricultural
products on international markets led to the worsening of the crisis; in
2014 the dramatic growth in inflation exploded to the point that in July
of that year the country's second default was announced. With the
presidential elections of 2015, Mauricio Macrì was elected and adopted
liberalist-inspired policies, starting with the liberalization of the
exchange rate of the Argentine peso, whose exchange value with the
dollar was established by government decree and heavy limits were placed
on the possibility for citizens to purchase foreign currency. This led
to the disappearance of the black market of currencies, together with a
nominal devaluation of the peso of over 40%.

The BRICS alternative

The election in 2019 of Alberto Fernàndez as president, accompanied by
Cristina Fernàndez de Kirchner. It confirmed the political choices of
previous administrations which identified a possible solution to
Argentina's problems within the context of a "regional" solution, common
to other countries on the continent, also taking advantage of President
Lula's return to power in Brazil.
The left-wing component of Peronism, led by Kirchner, identified
regional ties and Argentina's entry into the Brics on 1 January 2994 as
the solution to the country's major economic problems.
Through closer ties with Brazil, with which there is a large volume of
economic and commercial exchanges, the Argentine government thought of
creating a blockade, also using the Brics' aspiration to replace the
dollar as the reference currency. This project worried the United States
a lot and they poured their support into Milei. However, to understand
how the president-elect has conquered growing sectors of society,
breaking the bipartisan logic between right-wing and left-wing Peronism,
we must start from the complex procedure that regulates the
identification of presidential candidacies.
After an initial phase of open, simultaneous and mandatory primaries,
through a hybrid system, the candidates are selected, placing a limit on
the proliferation of small minority forces (it being necessary to reach
a threshold of at least 1.5% of valid votes ). This is how we proceed
with the organization of the first round: to be elected President, the
candidate with the most votes must obtain 45% of the votes or 40% and
there must be a difference of 10 points with the second candidate.
Otherwise, the two candidates with the most votes advance to the second
round. Milei, in both the first and second rounds, obtained
approximately 30% of the votes (29.86% and 29.99% respectively). winning
in the heart of Argentina's agrarian region, where social and economic
opposition to centre-left Peronism arose during the 2008 mass protests
against a change in the tax regime on grain exports, and where a new
centre-right majority, which managed to offset the weight of Peronism in
the popular and populous suburbs of the city of Buenos Aires (the
so-called 'conurbano').
In the provinces of Córdoba, Santa Fe and southern Entre Ríos, La
Libertad Avanza won against the candidate supported by the Peronist
right and managed to win over a part of the Peronist electorate, as
demonstrated by its victories in the traditionally Peronist provinces of
the north- west, such as Salta, Tucumán and La Rioja - in the latter two
it won the primaries and obtained a good result in the first round
(34.9% and 37.6% respectively). This means that Peronism lost power in
the face of discontent, which Milei instead knew how to capitalize on.
Only in the province and autonomous city of Buenos Aires did the old
two-party structure maintain some relevance, with around 70% of the
votes divided between Peronism and the right-wing coalition.
This means that Milei represents a renewal of the right in Argentina who
managed to undermine the electoral organization divided into two
coalitions, one dominated by Kirchner's terrorism, interrupting a cycle
that lasted 12 years, and the other center-right led by the Republican
Proposal party ( PRO) by Mauricio Macrì. A far-right leader, who harshly
criticized the leaders of both coalitions as a "political caste",
managed to represent discontent and take power in a context of deep
economic crisis and open conflict between the various factions that make
up the main electoral coalitions.
The new President is a true outsider who came to power thanks to a weak
electoral machine, the La Libertad Avanza movement, created in 2021 to
support his candidacy in the legislative elections in the city of Buenos
Aires. he managed to establish a relatively close relationship with a
depoliticized electorate. Convinced of the power of direct contact, he
relied on a small group made up of his sister, a handful of young social
media specialists and some minor political laborers who negotiated with
local conservative leaders or leaders marginalized by the parties
traditional, in order to guarantee a national extension to La Libertad
Avanza. The weakness of this structure was demonstrated by the party's
mediocre results in the provincial elections in which it failed to win a
single governorship. In other words Milei is an individualistic leader
without organization, without militant structure and without political
cadres.
His electoral campaign was based entirely on rhetoric on an offensive
form and content of his infectious words towards his opponents defined
with trivial language from time to time as shits, shitty thieves,
bastards and so on and so forth.
put. Behind these invectives, his vice president, Victoria Villarruel,
acts more effectively, against the protection of human rights and
democracy, and who claims the legacy of the coup generals and the "dirty
war".
Milei is the President with the most ambitious reform program in the
history of Argentina, but he does not have the resources and strength to
carry it out. To achieve this he will need to create a coalition with
the right-wing Peronists of the (PRO) who openly supported him in the
second round, compensating for the weakness of his La Libertà Avanz
movement by providing manpower to monitor the polls and accompanying the
transfer of votes from the right classic to the new one of Milei, proof
is that in the second round 92% of voters from the traditional right
voted for Him. Those who voted for him represent both the productive and
medium-high sectors disappointed by Juntos por el Cambio, and the
«small" lower economic sectors with informal jobs. These sectors have a
negative view of the public sector, of the job stability of public
employees. However, a large percentage of its voters do not support the
austerity policies that are necessary but would hit the working class.
For example, according to some studies, a large majority believes that
the state should provide good retirement pensions, which are one of the
main expenditure items in the Argentine public budget. Even if the
geographical and social diffusion of the vote covers the whole country,
Milei arrived at the presidency without any control over the provincials
and with a bloc of only 38 deputies out of 257 and 7 senators out of 72.
His institutional weakness makes him dependent on agreements with other
political forces, in particular with the PRO and its allies and with the
dissident Peronist sectors of official Peronism.
What resources will he have available to manage the social protest that
will likely emerge in the face of public budget cuts and other reforms
that affect the power of the unions? Milei won in all but three
provinces with more than 11 points ahead of the Peronist candidate
(55.7% to 44.3%). His victory extended to 352 of the country's more than
500 electoral districts, including departments, municipalities and
parties (territorial entities halfway between municipalities and provinces).
The games are on.

The Editorial Team

https://www.ucadi.org/2023/12/20/lenigma-argentina/
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