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2023-08-22 Caribbean-Latin America
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Sad tango. Argentina on the verge of default
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Direct Translation via Google Translate. Edited.
by Ol'ga Kuznetsova
[REGNUM] On August 13, primary elections were held in Argentina, the main purpose of which is to approve the final list of candidates for president, provincial governors and parliament. General elections are expected in October 2023. To participate in the voting, each candidate must receive at least 1.5% of the vote, and the results of the primaries help determine the strongest participants from each party, in order to roughly imagine the balance of power on the eve of a large-scale election campaign. Talk about the default in particular and about the economic situation of the state in general became the main thing for presidential candidates, forcing populists and oppositionists of all stripes to enter the arena, as well as resuming the discussion about the possible (non) entry of Argentina into the BRICS bloc (Argentina filed an application last year).
Continued from Page 3
ANARCHO-CAPITALIST RUSHES TO THE PRESIDENCY
As a result of the primary elections, the candidate of the Libertarian Party Promotion of Freedom, Javier Miley, came out on top . An interesting personality: he calls himself an anarcho-capitalist, and Argentina - "tax hell"; advocates cuts in government spending; actively criticizes the current government and, unlike his competitors, did not hold public office.
In addition, Miley is no stranger to scandals and eccentricity - either she opposes abortion and LGBT people, or she admits that she is not indifferent to threesome sex. He also likes selective abuse and periodically promises to reduce taxes by 90%.
Tax cuts, however, are by no means the most "fun" of his ideas. At the moment, the politician is throwing out extremely radical proposals: disband the Central Bank, fully dollarize Argentina, privatize all state-owned enterprises and encourage investment in mining. Which it is proposed to give later on account of the payment of external debt.
Along the way, Miley is open to dispersing two of the ten Argentine ministries and working closely with the United States. Which, however, became clear immediately after the declared desire for "dollarization".
For his behavior - and also for the fact that the people are to some extent "led" to such a style - many Latin Americans have repeatedly compared Miley with the former President of Brazil, Jair Bolsonaro, and with Donald Trump himself. Of course, this also implies accusations of active populism.
Interestingly, the victory of Javier Miley in the primaries does not at all guarantee his potential success in the elections in October - some even attribute it to the fact that almost 70% of the Argentine population ignored the vote.
And at the same time, even such a victory for Miley is a wake-up call for the current government, whose associates showed record low results in the primaries, largely due to public dissatisfaction with the solution of economic issues.
WAITING FOR DISASTER
At the moment, the economy of Argentina is, to put it mildly, far from being in the best condition. Over 35% of the population live below the poverty line, half of the merchants are trying to take their businesses into the shadows, and interannual inflation has reached 122%.
At the same time, unemployment figures are artificially lowered, and this is quite easy to do - you just need to make cuts unofficially. True, there is no way to get away from the problem that the country actually spends more than it earns.
The national budget deficit has already reached 2.5%. At the same time, Argentina has a huge debt to the International Monetary Fund (IMF), but cannot boast of extensive access to new loans to repay it. Some analysts even classify the situation with this debt as unsolvable.
Business consultant Octavio Dürich reports that the local economy has a currency control system in place. Its essence is an artificial increase in demand for the Argentine peso, which entails the desire of citizens to exchange it for foreign currency, which is more in demand. Thus, the national central bank can safely charge a more attractive value for the peso, which is artificially high.
Such tricks do not pass without consequences. They have a negative impact on regional markets and local industry, which is already not in the best shape.
To put it bluntly, at the moment Argentina is on the verge of a new default, and no one is clearly going to take it away from there.
BRICS: HOPE WITHOUT HOPE
According to the Argentine journalist Diego Intursari , the new Argentine leader - no matter what party he belongs to - will inevitably face the need to find financing to pay off the external debt to the IMF.
And here, the South American country would not be hurt by BRICS membership - this, for example, opens up opportunities for obtaining a loan from the BRICS New Development Bank, which would allow Argentina to cover part of the existing debt.
Argentina is being pushed to review the results of the Falklands War
True, it is extremely unlikely that most of the current members of this bloc will be pleased with the new "partner", who in fact will be more like a dependent and a burden.
BRICS is not a new national idea at all: already two of the alleged winners of the Argentine elections do not plan to join there. And incumbent President Alberto Fernandez unexpectedly denied the information about his arrival at the summit of the bloc's leaders, which will be held in South Africa tomorrow, August 22.
ANGLO-SAXON HAND
Considering the current state of Argentina, it is clearly not necessary to talk about any entry into the BRICS, or especially warm relations with Russia. The country is firmly on the hook of the International Monetary Fund, which is under the influence of the US and the UK.
You can also recall that Argentina is one of the countries with the largest proven reserves of lithium (19 million tons) and has long become a battlefield for transnational corporations, actively exporting from here everything that even remotely resembles minerals. Thus, the proposals to “pay with natural resources” with the IMF on account of debt smell like the authorship of quite certain political groups.
And, given the lack of sane alternatives, the implementation of such plans is hardly surprising or unrealizable. Everything is simple: either a new disastrous default, or the search for a new "bottom" in the loss of sovereignty - this time due to the export of minerals.
Moreover, the identity of the new president will not matter. Before the globalists from the IMF, both Kirchnerists and anarcho-capitalists with sideburns are equally equal.
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