Matías Kulfas (Buenos Aires, 51 years old) was until June 4, 2022 Minister of Productive Development of Argentina. Until then, he was part of the small circle of senior officials who defended the president, Alberto Fernández, in his internal fight with Cristina Kirchner, the vice president. His departure from the Government was evidence that Fernández was losing quotas of power day by day in favor of the most radicalized sectors of the Peronist alliance Frente de Todos. “Cristina openly began to attack economic policy,” laments Kulfas, author of A Peronism for the 21st century (Siglo XXI Ediciones), an essay that he has just published with proposals for the renewal of the movement that has been in the Casa Rosada since 2019. “We need a new scheme in economic matters, with a Peronist matrix but different from Kirchnerism,” he says.
Ask: Why is the idea that the only way out is exile prevailing among Argentines?
Answer: Out of frustration. Argentina, during the last 50 years, has not found its way. Since the 1970s, Argentina has alternated between the neoliberal model and the inconsistencies of a national distributionist model, which is the one embodied by Peronism. The problem is not the pendulum, but that the two places are non-places. Liberalism because it is unfeasible and conflictive, and this is not a submissive society. And on the other side, Peronism, which has not been able to manage the necessary co-evolution that must exist between productive development and income distribution. We are not the worst in the world, but there is a feeling that the country is ready for more. And that needs a political order.
Q. In his book, he tells how the first Kirchnerism, the one initiated in 2003 by Néstor Kirchner, generated a change in that sense, but then did not react in time when conditions were no longer the same…
R. Kirchnerism comes to refound the historical values of Peronism after what was the neoliberal decade of the nineties with Carlos Menem. It had a very good first moment, with the economy growing, improving social indicators and employment and with a very measured macroeconomic management. Nestor Kirchner may have been the president who best understood the benefits of fiscal discipline. Later, that was distorted.
Q. For internal or external reasons?
R. There was a change of international context, but above all internal. All that rational look that Kirchner had changed completely with the arrival of Cristina as president [su esposa], in 2007. She had another conception. She recently said that the fiscal deficit is not a problem, that everyone has a fiscal deficit and that this does not affect inflation. But she omitted to say that the countries that have fiscal deficits have well-oiled financing mechanisms and do not resort to permanently issuing currency.
Q. The eternal debate between issuing or borrowing…
R. I am not dogmatic regarding the monetary issue. Argentina during the pandemic had to finance an aid package and had no other source than the issuance. But it is one thing to do it in a timely manner for a specific problem and another to be doing it all the time. There, a surplus of pesos is created that generates more inflation, which is what happens today in Argentina.
Q. Was it malpractice or the fault of the fight between Alberto Fernández and Cristina Kirchner?
R. Alberto had a different vision, and that is why he started with a like-minded economic team. But what in the campaign seemed something positive, a dialogue-oriented Alberto and with the idea of ”returning better” without repeating the mistakes of the last Kirchner government, soon changed. And Cristina began openly attacking economic policy.
Q. But did Kirchnerism assume that it had made mistakes when it handed over the Government in 2015?
R. That critical look did not exist in Cristina or in her teams. In 2019 the proposal was “we have to resume what was done well in previous governments”, when the context was completely different. The one of 2019 is an over-indebted Argentina, with very low levels of reserves in the Central Bank and with a recession. And as if that were not enough, a pandemic came, the war in Ukraine and then the drought. For Alberto they were all against, and the most serious was the internal fight [con Cristina Kirchner]-
Q. Worse than the pandemic and the effects of the war in Ukraine?
R. When a government is cohesive, it can have economic policy responses that compensate. But if there are inconsistencies and teams that boycott others, it is very difficult.
Q. And how did you live as a minister day by day with this internal tension?
R. As for me, I was very devoted to management. Today they are all pandemic specialists, but in March 2020 no one had any idea. A health policy and economic aid package had to be implemented in record time and without precedent. And then he was responding to criticism. Discussing in the open, through the media, was something very harmful and rarely seen.
Q. You speak of three Kirchnerisms. Are we entering a fourth Kirchnerism, regarding the political and economic crisis?
R. No, there was no fourth Kirchnerism and I don’t know if there will be. It seems that there is no Kirchner solution to Argentina’s problems, as the journalist José Natanson says. In all the criticisms of Cristina and her teams there was no answer. They never said “such a plan must be promoted” headed by an economist of that conceptual framework. When the political situation reached an extreme limit, the replacement came from the side of [el ministro de Economía] Sergio Massa, who is not a Kirchnerist and has another vision. In this context of restrictions, Kirchnerism has no answer. That is why he proposed a new scheme in economic matters, from a Peronist matrix but different from Kirchnerism.
Q. How is that Peronism of the future?
R. Peronism continues to think about the industrial with a head of the 20th century. Faced with the ideas of the right that the labor market must be made more flexible and labor rights swept away, it was blocked in the past. And it is neither one thing nor the other. In addition, Peronism has systematically refused to discuss a stabilization plan. Until the war in Ukraine we could discuss whether inflation was lowered with a policy of shock or gradualism. Now that inflation has gone above 100% there is nothing to discuss. We need a comprehensive stabilization plan to bring it down at once.
Q. There has been talk again of dollarization to lower inflation. Is it a possible solution?
R. Planned dollarization is an alternative, albeit one of the worst. Above all, because Argentina has not taken inflation seriously for years. With Cristina the problem was denied; then Mauricio Macri came, he said that it was a very simple problem to solve and he left double what he had inherited; And in this government, when the time came to discuss a plan after the war in Ukraine, the policy was already detonated. Peronism continues to think that the problem of inflation has to do with monopolies and oligopolies. They exist, but they also exist in Brazil, Mexico and Spain and there is not so much inflation there.
Q. Would you vote for Cristina Kirchner if she were a candidate?
R. No, because I want Peronism to be renewed. And I’m not talking about leaders, but ideas.
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