January 24, 2018

The week

Monday, March 20, 2017

If three’s a crowd, what about 300,000?

A man is passed over the barricade in the mosh pit area to security during a show of Argentine singer Indio Solari in Olavarría.
By Michael Soltys / Senior Editor

The rock concert stampede in Olivarría last weekend is right up there among Argentina’s biggest disaster stories of the last quarter-century and at first glance it might be difficult to understand why. The most common yardstick for such traumas tends to be the death toll and here Olivarría falls well short of the other catastrophes in that period — the terrorist bomb destruction of the Israeli Embassy exactly 25 years ago today (29 deaths), the same fate suffered by the AMIA Jewish community centre 28 months later (85), the Cromañon rock club blaze almost at the close of 2004 (194) and the Once rail tragedy of 2012 (52), not to mention other minor massacres drawing less coverage such as various nasty prison incidents. By contrast, there are only two known dead (amazingly enough) from some 300,000 “el Indio” Solari addicts running amok and even assuming the worst for those who have yet to be located by their families (and rock fans are not usually famous for being home-birds), the death toll still does not come close to any of the tragedies listed above.
Perhaps the real impact of the Olivarría story lies in it being a metaphor for much of what is wrong in Argentina these days. President Mauricio Macri put his finger on one of the more obvious conclusions when he said: “This is what happens when the norms are ignored.” But while such anarchist/libertarian attitudes are more or less a permanent condition of a society strong on family values and weak in civic sense, this also refers more specifically to some current events. Like the pickets — what are they if not transgressors of the norms big time?
Take Wednesday, for example. Back in that revolutionary year of 1848 the British Chartists had secured a million signatures for a radically democratic petition and were going to present it on a given day in force, leading to widespread hopes and fears on the respective sides that Britain would then become a republic. But those familiar with British weather can probably guess what happened and Elizabeth II is now into the 65th year of her reign. This Wednesday (the centenary of the abdication of Russian Czar Nicholas II, as it happens, as well as the Ides of March) might not have had the same potentially momentous historical consequences but there was a similar chain of events — the pickets out in force until dispersed by the most torrential downpour so far this year (in this city at least, as opposed to some long-suffering provinces). But they will be back — and the frustration will be felt most keenly by Macri’s core constituency baffled over why he should try to ride this tiger.
The Olivarría story also reflects a stubborn economic stagnation. Among the war-cries of the general strike which the CGT has just called for April 6 is demanding a halt to allegedly soaring imports (even if these actually fell last year, at least in value if not in volume) — the model would thus be protectionism gearing the economy to a small domestic market of 40 million consumers struggling to keep up with inflation and other taxes. Amid these demand constraints, if you suddenly find yourself with a product commanding an instant market of 300,000 consumers, you do not look the gift horse in the mouth and you do not ask questions — you just sit back and enjoy your luck. That is another face of the Olivarría tragedy — the rare success story which went so horribly wrong.
We could go on but better leave some space for what happened in the week as well as the weekend.

The most immediate concern of countless families is returning their offspring to school, especially in Buenos Aires province, but since last Friday’s column devoted almost half its space to this “class struggle,” we will not repeat too much here on this still unresolved issue. The simple way of describing the situation would be to say that there is no school while the teachers remain on strike but that would also be simplistic. Strike adherence is not 100 percent by any estimate — especially not in private education while even the unions at this stage are calling two-day rather than indefinite strikes (something which perhaps only exists in the imagination of the unionist Roberto Baradel). Over half the provinces have settled on the quiet — these do not include pivotal Buenos Aires province but here Governor María Eugenia Vidal is making certain inroads with carrot and stick methods. The carrot is a lump-sum bonus for teachers defying the strike (a lump sum could also be the way around the deadlock over the government’s stubborn defence of a wage guideline below 20 percent) while the stick consists of docking pay for services not rendered — quite effective in eroding adherence as the days go by. As a result it is hard to say whether or not the strikers are a majority of teachers because the estimates are quite evenly divided.
The government continues to stand firm against national bargaining even though the opinions within its ranks are not unanimous.
Meanwhile the Macri administration is not only seeking to drive a wedge into the ranks of the teachers but organised labour as a whole in the hope that the CGT strike called yesterday for April 6 will not be quite so general. Thus this new sector-by-sector approach saw Macri announce on Wednesday a productivity pact with the car industry (including SMATA auto workers union), seeking to follow up a similar multi-sectorial agreement last month to revive Vaca Muerta shale. The auto pact shoots for seven-digit vehicle production by the year 2023 — the aim is to export 35 percent of production and expand the workforce from 85,000 to 115,000. Yet having seen the effect of first pickets and then rain on Wednesday’s traffic that same day, one can only shudder at the thought of a million more cars on the roads.
SMATA might be on board with productivity for now but other trade unions are more apprehensive, fearing for employment levels. There is a growing government reductionism (no doubt originating in the electoral strategy of the spin doctors) which attributes all resistance to Kirchnerite sabotage, including the labour disputes, but in point of fact it would be simplistic even to identify this with trade unionism, even if the CGT is placing itself at the head — thus much of the protectionist noise against imports (about which there was a Labour Ministry meeting on Tuesday to explain government policy without changing many minds) is coming from manufacturers encouraged by Donald Trump.
Not very much politics this week to honour this column’s original “Politics & Labour” slug because candidacy deadlines still have another month or so to go and decisions are usually last-minute — thus ex-president Cristina Fernández de Kirchner, Renewal Front leader Sergio Massa and Macri’s maverick ally Elisa Carrió are all waiting to see who blinks first and tosses their hat into the Buenos Aires province ring because they probably would not risk a run if the others do not force their hand.

The so-called productive sector with its long history of cultivating state contacts rather than any entrepreneurial heroism might have its faults but also has some cause for complaint — and not just about the tax burden, their favourite gripe. Perhaps the economy’s real problem is that there is too much money in money — confirmed by the Central Bank report showing that over US$490 million of the almost US$590 million invested in Argentina last month went into portfolio or financial investment.And much of the latter heads for government bonds as the public-sector borrowing requirement to plug fiscal gaps remains high, thus crowding out the private sector in this sphere as well.
More bad news for the productive sector was the 55 percent leap in credit card spending abroad this summer to some US$800 million — this adds up to exported consumption or imports which do not arise from government free market dogmas but from consumer reactions to inordinately high prices here (with some items like consumer electronics or garments often double elsewhere). Therein lies the fatal flaw of the Kirchnerite model which (very crudely simplified) argued that if wages, prices, taxes and the exchange rate are all kept high, then there is more money to go round for everybody. If the dollar stays low (despite the Federal Reserve finally raising interest rates this week) following a year of over 40 percent inflation, then surely this is a disarray of relative prices to rival the consequences of a decade of virtually frozen utility bills.
The latter are not going anywhere following the unpleasant surprise of the 2.5 percent February inflation figure announced by INDEC statistics bureau last week (higher than most private consultants) — the adverse effects of any steep public service or transport fare increase for future inflation and hence collective bargaining clearly outweigh the benefits of subsidy savings to bring down the fiscal deficit, at least in electoral terms. But keeping a lid on inflation also risks slowing down the sluggish economy as a whole — there are no easy calls.               
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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia