We understand that this course of action depends almost entirely on the disarmament of the agrarian right wing collation, focusing the interventions on the concentrating agents (agrarian pools, landowners, exporting companies) and for the benefit of the middle and family agriculture.
Damian Lobos*
Argentina´s next government will have a complex fiscal situation. After three years of a “gradualist” policy, 2018 was the perfect-neoliberal-storm; capital flight of US$ 30,000 million dollars, US$ 57,000 million indebtedness with the IMF, reductions in retirements and pensions, and massive budget cut for 2019 (to the point that at this moment we are the only country in the world that does not have a ministry of health). Fall of % 3.5 of the GDP, poverty reaching % 33.6 (the highest in decade) and the polls stopped being the crystal mirror in favor. With this panorama, the Peronist opposition, embodied in the figure of the ex-president Cristina Fernandez, discusses the creation of a broad alliance between the left, the so called “progressivism” and part of the center. The fine points are not discussed, but what seems to be a primary agreement is the need to change the course of the economy, leaving aside the recession model and returning to the expansive Keynesian measures.
The question that buzzes all ears is; Who will pay for that? Many have evoked the huge feat of the first Kirchner government, which paid the entire debt with the IMF (2006) and negotiated the private debt with a 25% reduction (2003/2005, with second chance in 2010). What the nostalgics often forget is that all of that was achieved after a declaration of default, after the abandonment of the exchange rate parity and the political-social crisis of 2001. Currently, the “rescue” agreement (triples quotation marks) of the IMF seems to be done to eliminate this possibility, ensuring the resources for the 2019 due dates, year in which the government will want to finish big and take more debt or sign a new agreement – more pyrrhic than the current one.
The objective of the “Fund” (as we say to the IMF) maneuver seems obvious; prevent the incoming government (be it of any wing) from declaring the default in the first year of administration. With that time bought, the bet is to build a panorama where the option of taking external debt at good rates is the most succulent, stress the internal discussions of a weak political coalition and pushing the government to the right. But the swings of the world economy give no respite to speculators; if the commercial war between the USA and China continues, there seem to be no much room for financing an economy like Argentina – especially if Brazil´s Bolsonaro becomes a contender.
The two historical sectors of Argentina rentism appear again in the speculative horizon: the financial and agricultural-export sector. Historical experience has shown that the former may be the most tamable, with a major alliance between the national industrial sector and the trade unions, sustained by a policy of lowering the interest rate for industry and for the consumption of the middle class. The previous government applied ceilings to the exchange of foreign currency and used central bank reserves to pay debt, measures that would seem simple to reapply.
The same cannot be said of the agricultural export sector. The bid for its resources has been the key that explains the course of Argentina history. Just to make recent history, the boom in commodity prices was one of the central aspects of the economy after abandonment of convertibility. The result was the creation of an extractivist coalition where, during the years 2002 and 2010, the expansive and redistributive policies were combined with the excessive and unbridled advance of the soybean export complex. After the North American crisis of 2008, and faced with the possibility of a new recession, the government of Cristina Fernández proposed the creation of a regime of mobile export rights, with an aliquot on the rise, due to the increase in international prices. This project generated a strong media and political conflict of great weight, named “conflict with the countryside”, which was resolved in a coalition between the most concentrated export sectors and the squirearchy, and the medium and small producers of the Pampean region, both defending a policy of liberalization.
This was the platform under which the retrograde right wing won the elections in 2015. The proposal of Macri and his team was the elimination of the “bad, very bad tax” (as they say to export rights), which they barely assumed (absolute elimination for wheat and corn, and progressive for soy). But after the capital flight of 2018, the government found in the increase of the “bad, very bad tax” a simple way of currency availability. In addition to that, an increase in tax collection is expected in 2019, due to good harvest forecasts.
What is the expected level for 2019 of the “bad, very bad tax”? As shown in the graph, it is exactly the same percentage of the total tax collection as in 2008.
This brings us to the political problem about the real possibility (or not) of being able to expropriate part of the surplus of the agricultural export sector by the government that assumes in December of next year. We believe that it is not only a good option in terms of tax collections, but also an essential structural need for the country. We understand that this course of action depends almost entirely on the disarmament of the agrarian right wing collation, focusing the interventions on the concentrating agents (agrarian pools, landowners, exporting companies) and for the benefit of the middle and family agriculture. But if something has shown us the recent history of Latin America and the Global South, it is that this type of measures requires popular mobilization, creativity and the radicalization of politics.
For this reason, it is essential that land rights become an issue for the next elections, as it was in South Africa, and that the agrarian popular organizations assume their historic role.
* Damian Lobos is part of Asociación Civil “Pedro Ignacio de Castro Barros”, Observatorio AUPA – INTA AER Córdoba, Argentina. He is ASTI Alumni (2017).
Editing: Boaventura Monjane
