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keys to Cristina Kirchner’s analysis of the economy in the Milei era

The former president, Cristina Fernández de Kirchner, reappeared this Wednesday and provided a 33-page document on the debt crisis in Argentina. What are the highlights.

1. The theory of inflation

Unlike the liberal market theory that considers that inflation is due to monetary issueCristina Kirchner maintains that inflation skyrockets due to dollar shortage and that compulsive indebtedness in said currency only aggravates the external restriction of the two-monetary economy.

Cristina affirms that it does not mean ignoring the fiscal issue, but that it is not only a question of expenses but also of income. She mentions 40% of the informal economy, under-invoicing of exports, over-invoicing of imports and taxes.

And, he points out a “clear absence of risk perception in a tax system not only prepared for avoidance and evasion, but also to tax production and work over financial matters.”

2.Third debt crisis in historical key

For CFK, the first was with the last civil-military dictatorship. The second, incubated in convertibility which imploded in 2001. The third, carried out in eThe Government of Mauricio Macri qIt involved a return of the IMF.

After a historic revival, he stated that debt in dollars is an “insurmountable condition” for the development of the economy and highlighted Néstor Kirchner paying the IMF. He also cited Nicolás Dujovne, former Minister of Finance of Mauricio Macri stating that his Government had levels of “very low” debt.

In a fragment, Cristina mentions to Luis Caputo, the current Minister of Economy of Javier Milei and assigns him as a participant in the 2018 debt that, given the inability to meet debt maturitiesthe Government turned to the lender of last resort, the IMF.

“The multilateral organization granted the Macri government a loan for 57,000 million dollars – the largest in the entire history of the IMF, equivalent to 60% of its loanable capacity disbursing 45,000 million dollars that were used, mostly, for the flight of speculative capital that had entered Argentina until that same year. More than a loan, it was a monumental scam”.

3. Criticism of the neoliberal model

“Secondly, the failure of the neoliberal adjustment and external debt programs, with or without privatization and its consequences with the increase in poverty and violence for the entire Argentine society, but which has always meant an excellent plan of business for a few. Each neoliberal cycle ended up crystallizing a formidable transfer of income from all Argentines to the most concentrated groups in the economy”.

4. What he said about the Government of Alberto Fernández

From the Government of the formula headed by Alberto Fernández and herself, she highlighted the restructuring of the external debt with private bondholders contracted during the Government of Mauricio Macri but criticized that there was no reduction in interest or almost a reduction in capital.

“Despite obtaining very important trade surpluses in the first years of management, the government did not achieve the necessary strength in terms of reserves due to poor administration of the dollars obtained, in an Argentina where economic tension is inextricably linked to scarcity or abundance of dollars,” he questioned.

Then, she marked her main difference with the Government of which she was vice president: signing an agreement with the IMF in 2022 that validated the loan and “condemned the government to a kind of agony by being forced to implement the policies dictated by the multilateral organization that ordered, among other things, a devaluation of the exchange rate above the inflation rate, feeding it back into a vicious and lethal circle.”

Finally, regarding Sergio Massa, at the end of Alberto Fernández’s Government he recalled that the IMF forced the Government to devalue in the middle of the presidential elections, bringing inflation to double digits. “confirming once again that inflation, in Argentina, is inextricably linked to the dollar and not to the fiscal deficit.”

5. Javier Milei: “an economist showman in La Rosada”

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