IPS-English ECONOMY-ARGENTINA: Mr. Kirchner, the Éminence Not-So-Grise
 
Date: Fri, 25 Apr 2008 17:26:19 -0700

 
Marcela Valente

BUENOS AIRES, Apr 25   (IPS)  - Above and beyond its impact on the
markets or the economy itself, the change of economy minister in Argentina
has clearly demonstrated the enormous power that former President
Néstor Kirchner exerts within the government of his wife and successor,
President Cristina Fernández, analysts say.

Martín Lousteau resigned as economy minister Thursday night after
hearing Kirchner's speech at the launch of his presidency of the governing
Justicialista (Peronist) Party (PJ), in which he indirectly criticised
the minister's proposals for controlling rapidly increasing consumer
prices.

Lousteau's replacement is Carlos Fernández (no relation to the president),
an economist who only a few weeks ago was appointed head of the Federal
Administration of Public Revenues (the tax office). In that position,
he had a very low profile, but was in almost daily contact with Kirchner.


In the reshuffle, Guillermo Moreno, the domestic commerce secretary,
was confirmed in the post he has held since the Kirchner administration
(2003-2007), although he is under fire for his controversial price
control methods and his growing influence, which some observers say
is even greater than that of the economy minister.

”It's not that Kirchner has a growing influence on the Fernández
administration, but rather that he is in charge; he is the political
leader, and her role is merely formal,” political scientist Sergio
Berensztein, a professor at Torcuato Di Tella University and a member
of the consulting firm Poliarquia, told IPS.

”The Kirchners believe that increasing their political power will
give them control over inflation, and so they generate greater confrontation
and uncertainty,” said Berensztein, who added that this is not a new
strategy, but one that has become more accentuated since the new government
took office on Dec. 10.

Kirchner's influence is an open secret. Ministers and other officials
admit privately that the former president phones them to tell them
what they should or should not do. But his début as head of the PJ
and the change of minister suggest that Argentina's First Gentleman
is beginning to step out of the wings and into the limelight.

This view is shared by several opposition leaders. Elisa Carrió,
head of the Civic Coalition, who came second in the last presidential
elections, said that ”Kirchner is the real power in Argentina,” and
that his confrontational character ”weakens the president's position.”

Meanwhile Senator Gerardo Morales, head of the Radical Civic Union
party, said that the replacement of Lousteau by Carlos Fernández ”is
another sign that the economy continues to be in Kirchner's hands.”

Economist Claudio Lozano, a congressman for Proyecto Sur, said that
Lousteau's replacement does not imply any change in economic policy
because ”it is still being managed by Kirchner and Moreno.” This continuity
is cause for concern because of the country's growing inflation, which
is fuelling poverty and inequality, he said.

Less vehemently, Analí del Franco of the consulting firm Analogías,
which carries out opinion polls for the government, told IPS that
Kirchner has a ”high” level of involvement in his wife's administration,
but denied that his participation weakened her. ”They are a team.
Their decisions are always shared,” she said.

”Yes, they are a team, but he is the one in charge,” Berensztein amended.

Lousteau's resignation took place in the midst of an unresolved conflict
between the government and farmers' associations, and at a time when
inflation appears to be spiralling out of control. The economy minister
had proposed measures to curb prices, but Kirchner appeared to dismiss
these out of hand in his speech Thursday.

”Those who bankrupted the country now want to freeze the economy!
Let's have an end to this hypocrisy! To lower prices, we must get
rid of shameless speculators!” roared the former president, to ovations
from the party faithful.

One hour later, Lousteau resigned. Cabinet chief Alberto Fernández
(no relation) said early on Friday that the president considered ”his
time was up,” and he acknowledged that some of the departing economy
minister's proposals ”did not coincide with the general interest.”

Like many economists, Lousteau believes that at present demand is
increasing faster than supply, and therefore economic growth, which
has exceeded eight percent a year since 2003, should slow down to
avoid the price increases that are particularly affecting foods.

He also maintains that interest rates should be raised slightly to
encourage saving, and that the National Statistics and Census Institute
(INDEC), which was subjected to government intervention by Kirchner
in January 2007, should return to normal functioning. 

The institute, under the control of Secretary Moreno, has lost credibility
since last year amid criticism by experts and a number of accusations
concerning its statistics.

According to INDEC, annualised inflation to March 2008 was 8.8 percent,
but private consulting firms say that it is at least 26 percent. When
she was sworn in, President Fernández promised new methods for measuring
consumer prices, and Lousteau stated that he was working on a new
index.

However, the former minister could not reach agreement with Moreno
over this issue.

The crisis with agricultural producers' associations was triggered
in March by the announcement of increased taxes on soybean exports,
proposed by Lousteau. 

Disgruntled farmers blocked highways in the interior of the country
for three weeks, interrupting food transportation by truck, until
they declared a truce to participate in negotiations.

Lousteau kept to the margins of the talks, which have so far not
been fruitful, while Moreno has taken a very prominent role. Like
Kirchner, Moreno believes that ”shameless speculators” are to blame
for inflation and must be combated.


*****
+ ECONOMY-LATIN AMERICA: From Optimism to Concern (http://ipsnews.net/news.asp?idnews=42086)
+ ARGENTINA: Empty Shelves, Drowned Chicks as Farm Strike Rages (http://ipsnews.net/news.asp?idnews=41823)
+ ELECTIONS-ARGENTINA: President Kirchner's Legacy, Pending Challenges
(http://ipsnews.net/news.asp?idnews=39806)
+ Analogías (http://www.analogias.com.ar/english/index.htm)
+ Poliarquía - in Spanish (http://www.poliarquia.com)


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