While Argentina’s institutions remain relatively strong, particularly in the aftermath of the bloody military dictatorship that ended in 1983, politically we remain infants, as the past few weeks have demonstrated. Thrust from power, Peronism — and its more radicalised version, Kirchnerismo — has shown its worst face, looking to obstruct the legislative process with verbal violence in the Chamber of Deputies while allying with fringe leftist parties to wreak havoc in the streets of Buenos Aires. Sore losers.
With a minority government, President Mauricio Macri had to strong-arm Congress, consuming political capital to pass key legislation for his ambitious reform agenda. Yet, it wasn’t the underlying law that merited its passing, rather, it was the graphic image of raw power: Macri negotiated with Peronist governors, offering them much-needed cash in exchange for loyal deputies’ votes. As a battle raged on in the streets, the president took a break to play paddle. Macri’s own ‘Quixotisation,’ as he assumes the Peronist/Kirchnerite modus operandi.
Unfortunately, this may be the only way things work in our beloved country.
Macri’s reform agenda includes muchneeded changes for a system that is obsolete. Argentina has the highest labour costs of Latin America, one of the world’s most uncompetitive regions in economic terms, according to a June 2017 report by the Inter-American Development Bank.
Another report put together by the Economy Ministry in the same month showed the “tax burden” in Argentina stands at 32 percent of GDP, 40 percent higher than in the rest of the region, while corporate tax rates are the highest in the world. According to the World Economic Forum’s Global Competitiveness Report, the total tax rate as a percentage of private profits stood at 137.4 percent, meaning the state makes more out of a company’s profits than its shareholders.
Thus, Macri’s tax reform (reforma tributaria), passed this week, is a welcome step forward. As will be the labour reform expected for March. The “previsional” or pension reform, which resulted in a new formula to calculate disbursements, which will effectively lower payouts in the short-term by about six percentage points, is also a crucial part of the debate. The problem was there was no debate. Through Marcos Peña, chief-of-staff, to María Eugenia Vidal, governor of Buenos Aires Province, the ruling Cambiemos (Let’s Change) coalition insisted that pensioners wouldn’t face a reduction in payments. That’s a plain lie.
Instead of having a proper debate in Congress, Cambiemos used its political power, and the media was complicit.
No-one asked Macri why they sought to shave $100 billion off of state expenditures in 2018 by cutting pensioners’ take instead of targeting, for example, taxes on mining companies. Global mining giant Glencore pays three percent royalties, as does Barrick Gold, as the recent Paradise Papers investigation published by Perfil revealed. Reporters could’ve asked the president why he signed a presidential decree lowering export taxes on soybeans, which will cost the state US$1 billion in 2018, according to a report by the Rosario Chamber of Commerce. Instead, they asked Macri if his government felt their communication strategy was flawed.
Not that they could’ve had a proper debate anyways. In the tense discussions ahead of the pension reform, CFK’s former finance minister — now deputy — Axel Kicillof accused the Macri administration of generating inflation. During his two year-tenure, Axel’s record speaks for itself: 81.3 percent accumulated inflation. The Kirchnerites, together with Sergio Massa’s Frente Renovador (Renewal Front) and other left-leaning parties only debated ideology, ranting on about neoliberalism and the military dictatorship instead of proposing changes and amendments.
Out in the streets, violence prevailed. First, the security forces violently repressed those protesting. On Monday, the cops were sent out for a beating at the hands of an organised group of piqueteros that showered them with a barrage of rocks, molotov cocktails, and even homemade mortar guns. It’s surprising no-one was killed, though 162 people ended up wounded, 88 of them police officers. Let’s hope we can begin to grow up.
In his column, Tharoor wrote about India’s first prime minister, Jawaharlal Nehru, and his democratic convictions: “[Nehru] had spent a political lifetime trying to instil the habits of democracy in his people — a disdain for dictators, a respect for parliamentary procedures, an abiding faith in the constitutional system. He himself was such a convinced democrat, profoundly wary of the risks of autocracy, that, at the crest of his rise, he authored an anonymous article in the Modern Review warning Indians of the dangers of giving dictatorial temptations to Jawaharlal Nehru. ‘He must be checked,’ he wrote of himself. ‘We want no Caesars.’"