Could It Be That The Argentinian Government Has Some Bad Economic News To Bury?

February 5, 2012

Anton Goryunov writes from Buenos Aires: We at Stirring Trouble have our own way of judging what is going on in the world. We try to notice things that other people sometimes overlook. Like if we hear that frisky businessmen from China no longer tip hookers generously over in Europe and the Sates we assume that things in the Chinese economy are not going all that well and that we should expect trouble soon. Or if we hear more and more decent cars making those whistling noises, we know that the middle classes are squeezed and can’t afford to change their brake pads on time

Which brings me, funnily enough, to the latest stand-off between Argentina and Britain over the Falkland Islands, also known as the Malvinas, if your sympathies are on the side of the Argentinians. For the past several months President Christina Kirchner’s people have been making a lot of noises about the Falklands, as if the issue of their sovereignty was back with a vengeance. Seriously tough statements were coming from Buenos Aires, especially when it was announced that Prince William was arriving to the Falklands to serve six weeks as a search and rescue helicopter pilot, even though everyone knows that he is just trying to get away from his wife for a bit of manly fun with the boys. (The Prince, in case you’re interested is already on the islands and having a great time.) And then Buenos Aires went apeshit about Britain sending a state of the art destroyer Dauntless on a seven month deployment to the South Atlantic. The Argentinian foreign ministry even said that this was an attempt to ‘militarise the dispute over the islands’. In the same statement it was pointed out that Prince William was going to step on Argentinian soil dressed in a uniform of a conquistador, i.e. invader.

But my question is this: why do President Kirchner and her government pile up the pressure? Are the problems with the supposedly booming Argentinian economy by any chance that are biting too hard? It’s really difficult to know what the real state of the economy in Argentina is, as officials have been fiddling the stats here for the past couple of decades or so with much success, preventing the likes if the International Monetary Fund and others to take a proper look at it. So the wonderful growth of 8 per cent registered last year should not be treated all that seriously. In 2008, for example, at the height of the world financial crisis, Argentina boasted a 0.9 per cent growth of the GDP, when in reality it contracted by 2.5 per cent.

The thing is that the Ms Kirchner’s government has had a tendency of blowing loads of money to get the economy out of trouble. So it wouldn’t be unreasonable to presume that government overspending has started to hit back, with that deficit burdening the economy. Last year the inflation rate in the country was 9.6 per cent, according to official stats, but people in the know have told Stirring Trouble that it ranged from 24 to 27 per cent. If that is the case, then the spending power of the domestic consumer that supposedly powering Argentina’s economy might be not all that impressive. And if so, the clouds are probably gathering.

So what would be the best way to get the people thinking about other things instead of the economy? Well, a good juicy stand-off with Britain over the Malvinas might be just the right sort of thing to do. Especially as there’s been a lot of talk about vast reserves of oil and gas discovered around the islands and that sort of makes the whole case for a possible new attempt to grab them back all the more relevant in the eyes of the public. Especially, as the US would not be helping Britain this time, like it did in the last war, because President Obama just doesn’t like Britain all that much and prefers to build bridges with nations in Latin America.

I suppose the game that Buenos Aires is playing was given away by Argentina’s Vice President Amadou Boudou last week, who said that Britain has been using the tension over the islands to distract the attention of the British people from the rising unemployment and other economic problems. If we compare the two countries, it would probably be safer to presume that Argentina’s economic woes would be much more serious than Britain’s. But as Mr Boudou has inadvertently revealed the sort of thinking that is prevailing among his political colleagues, we could deduct that the Argentinian government is hoping to have a bit of fight over the islands to bury some seriously bad economic news at home.

Yep, it’s the small things that so often reveal the big ones. Like tips to hookers and whistling brake pads. And

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Category: Pardon Me For Asking · No Comments »
Tags: Argentina, Britain, Falklands, Prince William, stand-off