Soft civic-military coup in Argentina?

Soft civic-military coup in Argentina?

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 According to BBVA Research, inflation in Argentina will reach ionospheric levels in 2021 (above 50%), which will cause the loss of competitiveness of Argentine products with the consequent constriction in exports and an increase in the trade deficit that will lead to a rate of devastating unemployment of 20% in 2021. 

By German Gorraiz Lopez

© The Radical Outlook

The Pacific Alliance was born in 2011 with Mexico, Peru, Chile, and Colombia as founding states, the US and China as observers, and Australia and Canada as future associated states and currently represents 41% of the GDP of Latin America and 57 % of its foreign trade with a potential market of about 230 million people. The celebration in Santiago de Chile of the XV Summit of the Pacific Alliance already laid the foundations to incorporate Mercosur (Brazil, Argentina, Paraguay, and Uruguay) following the Kantian theory of the “carrot and stick” exposed by Sherman Kent in his book “Strategic Intelligence for North American World Politics” (1949).

According to the ex-Managing Director of the IMF, Lagarde, “the strength of the dollar together with the weakness of product prices creates risks for the balance sheets and financing of the debtor countries in dollars”, from which it is deduced that the economies of Latin America and the Caribbean 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”


Macri’s acceptance of the IMF’s postulates entailed mortgaging Argentina’s economic sovereignty since after the IMF’s disbursement of about USD $ 52,000 million, there would be a delay for the current Government of Debt maturities for 2021 estimated at approximately USD 15,000 million $, an unaffordable amount for the Central Bank of Argentina that would have liquid reserves of about $ 2,500 million, so Argentina and the IMF would have started negotiations to restructure the total amount of debt with the said agency, estimated at $ 45,000 million.

Children of the ‘Disappeared’ demonstrated in Buenos Aires in 2015. EPA/David Fernández

In addition, according to BBVA Research, inflation in Argentina will reach ionospheric levels in 2021 (above 50%), which will cause the loss of competitiveness of Argentine products with the consequent constriction in exports and an increase in the trade deficit that will lead to a rate of devastating unemployment of 20% in 2021. Likewise, uncontrolled inflation leads to the loss of purchasing power of workers and pensioners, the contraction of domestic consumption, and the disincentive for saving and seeking income outside of productive activities that could lead to Productive desertification that was unable to satisfy the demand for basic products.

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 US will use the Kentian strategy of the “carrot and stick” to pressure the Argentine government

According to the ex-Managing Director of the IMF, Lagarde, “the strength of the dollar together with the weakness of product prices creates risks for the balance sheets and financing of the debtor countries in dollars”, from which it is deduced that the economies of Latin America and the Caribbean 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 80s) aggravated by a notable increase in social instability, the increase in poverty rates and a severe decline in democratic freedoms.

The results of the Argentine primaries, which plunged the markets into a panic, cast doubt on the ambitious reform agenda of the incumbent President, Mauricio Macri.Photograph by Ronaldo Schemidt / AFP/ Getty

At the geopolitical level, 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 of China installing 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 US will use the Kentian strategy of the “carrot and stick” to pressure the Argentine government until it is able to install a joint base in Ushuaia and thus control mega-container traffic 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 “civil-military soft coup” that would have the blessings of the Biden Administration and whose first outline would be the statements of the Clarín Group spokesperson would not be ruled out, Marcelo Longobardi on Radio Miter who stated that “one 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”

The views expressed in the article are the author’s own and do not necessarily reflect our Editorial Policy


Author

Germán Gorraiz López is an economic and geopolitical analyst. He regularly collaborates in several Spanish and Latin American digital and printed publications.


Republishing is allowed with a copyright credit to © The Radical Outlook

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The Radical Outlook

The Radical Outlook is an online news web Portal designed for in-depth news analysis from the Eurasian region and beyond. It is Founded by a geopolitical analyst Shahzada Rahim.
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