The acceptance by Macri in 2018 of the IMF postulates meant mortgaging the economic sovereignty of Argentina because after the IMF disbursement of about 57,000 million USD $, the current Government was left with debt maturities for 2022 estimated at about 19,000 million USD $. Said amount was unaffordable for the Central Bank of Argentina, which would have liquid reserves of some 2,500 million USD $, for which reason Argentina and the IMF would have initiated negotiations to restructure the total amount of the debt with said organism, estimated at 45,000 million USD $ and On January 28, an agreement was reached to restructure said Debt.
However, according to the Argentine Central Bank, inflation in Argentina will continue to run wild in 2022 (above 50%), which will cause a loss of competitiveness of Argentine products with the consequent constriction in exports and an increase in the trade deficit that will lead to a devastating unemployment rate of 15%. An uncontrolled inflation entails the loss of purchasing power of workers and pensioners, the contraction of domestic consumption and the disincentive for savings and rent-seeking outside productive activities that could lead to a productive desertification that unable to meet the demand for basic products. Similarly, the Argentine economy will be more exposed to a possible appreciation of the dollar and the reversal of associated capital flows, which could reissue the “Lost Decade of Latin America” (Decade of the 1980s) aggravated by a notable increase in instability social, the increase in poverty rates (nearly 40% of Argentines would be close to the poverty line) and a severe setback in democratic freedoms.
Geopolitical turn of Alberto Fernández
Given the political myopia of the IMF in not applying a haircut to the Argentine debt inherited from the neoliberal stage of Macri, President Fernández would have initiated a rapprochement with Russia and China to stimulate mutual commercial transactions as well as attract investments that seem essential to refloat the battered Argentine economy. Thus, Fernández, during his visit to Putin, offered him the possibility of being “the gateway to Latin America” and in his meeting with Xi Jinping, he confirmed Argentina’s adherence to the Belt and Road Silk Project, which it could mean for Argentina. the chilling sum of 24,000 million dollars in investments and the stop pivoting in the orbit of the United States. However, the Biden Administration would be seriously concerned about the growing presence of China and Russia in the country as a result of the supply of medical supplies in the context of the current health pandemic, and especially about the possibility that China will set up a joint military base with Argentina in Ushuaia in exchange for Chinese financial support to install a gigantic logistics center in the province of Tierra del Fuego.
Despite the fact that the Argentine President himself would have promised Joe Biden’s special envoy, Juan González, that “there will be no foreign bases in Argentina”, the United States will use the Kentish “carrot and stick” strategy to pressure the Argentine Government until it succeeds in installing a joint base in Ushuaia and thus control the traffic of mega containers through the Drake Passage, an alternative to the Panama Canal. In the event that the Government of Alberto Fernández is not sensitive to the dictates of Washington, a “soft military civic coup” would not be ruled out, which would have the blessings of the Biden Administration and whose first outline would be the declarations of the spokesperson for the Clarín Group, Marcelo Longobardi on Radio Miter who stated that “some day we will have a surprise because we are going to have to format Argentina in a more authoritarian way to handle such a disaster”.