“The devaluation of weight? It's the most normal thing in the world, we've been expecting it for months. And it's all the fault of Cristina Kirchner”. Giulio Sapelli, professor of economic history at the Statale di Milano and great expert on Argentina (famous his "South American Journal” of 2011), commenting on the collapse of the currency of South America's second economy, which in the last month lost 17% against the dollar, reaching 8,24. In terms of weight, it is the heaviest collapse in the last 12 years, i.e. since the times of the so-called "corralito", whose specter is now re-emerging: "For Kirchner, the hour of truth has come: in 2002 Argentina had laboriously back on track thanks to the boom in the price of commodities, but his insane policy has ruined everything”.
An overly redistributive and "parasitic" policy, according to Sapelli. “He made a series of mistakes one after another: first too much Peronism in exploiting the boom with rent seeking, i.e. with state monopolism, as opposed to free competition. Argentina has subsidized too many things, from petrol to food. And what little he did liberally, i.e. privatizations, he did in an unfortunate way, which I would define as Prodi: not to create large groups but to sell them to friends, as in the case of our Ilva. Not to mention the restriction of the circulation of money, for fear of a new corralito, and the sale of central bank reserves in dollars. With these ingredients, the collapse of the currency is inevitable”.
In short, Kirchner has paralyzed the economic system, by not creating effective demand according to the Keynesian principle e driving away foreign investment, as in the case of the meat market. “Argentina has always had the best quality, but due to export duties it has been overtaken not only by Brazil but also by Uruguay and Paraguay, countries with a great tradition but much smaller”. Not to mention the management of some international affairs, such as that linked to Repsol, and the progressive estrangement also from the IMF due to the bonds, "a still unresolved issue". All elements that scared the markets quite a bit.
Now the result is effective inflation between 26 and 30%, despite the government talking about 10% ("They fired several of our Istat technicians to put the estimates in the hands of officials, but they can no longer lie") , and the poverty and unemployment rates "double those in Italy". And now how does it come out? “First of all by dismissing Kirchner: Peronism has failed and an alliance between liberals and socialists is now needed to relaunch the country. I would see an intelligent person in charge like the liberal of Italian origins Mauricio Macri, governor of Buenos Aires in his second term (and for 12 years, from 1995 to 2007, president of the Boca Juniors football club)”.
But concretely, what can the economy cling to? “To Patagonia. The only area of Argentina where the situation is flourishing is Patagonia, thanks to the discovery of deposits of shale gas which can become a great opportunity. But it is absolutely necessary to detax investments, and also to detax the production and export of meat, which must once again be produced according to the best standards and marketed all over the world, not focusing on soybeans which have a less interesting market”.
