It’s no secret that these are testing times for Argentina. If you’re not in the country and have been reading some of the stories in mainstream global newspapers in recent days, you’d be forgiven for imagining a country in ruins. Again.
‘Peso collapse raises fears Argentina lurching towards decennial crisis‘, screamed the headline of an article about last week’s currency devaluation in The Guardian. In it, author Uki Goni quoted a pensioner in Almagro who has been without power for 40 days and ex-central bank president Martín Redrado (now working for opposition deputy Sergio Massa) on his way to concluding that the government’s “glow has definitely gone now, obscured by runaway inflation, an alarming growth in crime, and revelations of seemingly rampant corruption among the president’s top officials”.
The Guardian article perhaps stood out, coming as it did from one of the UK’s flagship liberal publications, but it was not alone. Headlines in the financial press were, unsurprisingly, loaded with doom: ‘Argentine Peso Fall Threatens Government‘ (Financial Times), ‘Argentina: Bad to Worse‘ (WSJ), and Bloomberg’s ‘Argentine Default Chaos Relived as Blackouts Follow Looting‘, which rolled in December’s police strikes and blackouts into its apocalyptic analysis of the country’s economic future.
This kind of international coverage of Argentina, particularly its economy, is not new – the country seems to have been on “the edge of the abyss” since around 2009 – and usually touches on real problems here. But it continues to disappoint in showing no real interest in presenting a balanced debate of a complex situation.
This is partly down to the government’s own communication problems, as pointed out in an interesting column by Marcelo J. Garcia in the Buenos Aires Herald this weekend: “With little access to official sources, the correspondents tend to rehash whatever gets published in the most-read local press, which is mostly anti-government.” To that you can add that local anti-government press then cites international media to validate its position.
Garcia concludes that it is “therefore no surprise that the headlines have been unequivocally negative for years”. It is true that the government hardly makes life easy for journalists, but then again, good quality journalism isn’t supposed to be easy. It is not hard in Argentina to find qualified economists, political scientists, and academics that have a different view from those that so frequently cited in these critical pieces. More likely, then, they are just not looking. (Whether this is primarily the fault of the correspondent or his/her editors in the US/Europe is another debate entirely).
The all-too-frequent result is an over-simplified, incomplete, and partial analysis of what is going on here, usually framed within the parameters and assumptions of “orthodox” economic theory that naturally clash with the government’s explicitly heterodox policy mix entirely.
The ‘Passive’ Market
All this is not to say that the government is blameless – far from it. Its efforts to mould a different type of capitalist economy – lazy reporting of Argentina as “socialist” is another common mistake made by international media – have suffered from serious administrative and communicative deficiencies. Together, these frequently undermine the effectiveness of its policies, some of which were badly-thought out in the first place, and give the opposition parties and media plenty of ammunition. Economy Minister Axel Kicillof’s claim on Sunday that new regulations for buying dollars would be “biased towards those who have less”, when the day after it became clear that only the top 25% of earners would be entitled to exchange currency, is a fitting example.
It would also be short-sighted to ignore the impact of corruption, which is a far broader problem in Argentina than just the current executive, but nevertheless is a big problem when credibility is so important in the economic world of self-fulfilling prophecies.
But neither should we swallow the idea that the ‘market’ – often erroneously considered a synonym for ‘the people’ – is a passive bystander, struggling to make the best of whatever difficult hand it is dealt by an overbearing State. Any analysis built on this basic assumption is fundamentally flawed.
There are powerful forces at play, and if the global financial crisis has taught us anything it should be that they are not looking out for the interests of the majority. In Argentina, there is undoubtedly a minority that stands to benefit enormously from a full-blown economic crisis (complete with ‘mega-devaluation’), and the inevitable change in government that would follow. And an even smaller group that has the power to tilt the odds in favour of such an outcome. Whether they are conspiring to do so is harder to prove, though it would be naïve to rule that out as a possibility.
The year 2014 is set to be decisive for Argentina, one that will go a long way to defining the legacy of ‘Kirchnerism’ and will have a huge impact on the political course the country chooses at next year’s elections. It’s time for the media to step away from the proverbial abyss and concentrate on giving its coverage some real depth.