Sergio Berensztein, Political Analyst, President of the consultancy bearing his name, and Miguel Steuerman, Director of Radio JAI, the most listened-to radio station in the Jewish community of Latin America, discuss these topics in an exciting interview that we reproduce for FinGurú.
A government team without experience, which must learn from its mistakes. Pragmatic leap: Milei calls fools those who today criticize what he questioned during the electoral campaign. Is it possible to reconcile Macroeconomics and Microeconomics? The risk of an economic opening without a supporting program.
Sergio Berensztein, Political Analyst, President of the consultancy bearing his name, and Miguel Steuerman, Director of Radio JAI, the most listened-to radio station in the Jewish community of Latin America, discuss these topics in an exciting interview that we reproduce for FinGurú.
Miguel Steuerman: Sergio, how do you analyze this moment where the country still has deep problems, and yet, politics seems more concerned with entertaining us with topics like the case of Alberto Fernández, Milei's romance with Amalia González, the Vice President, and the Montoneros, the fights in the National Congress, to mention just a few.
Sergio Berensztein: When we analyze any country today, we see that political fights are very deep, so much so that we wonder whether political systems can maintain those levels of friction without compromising governability and even national security. We must accept that there will be frictions, differences, coordination problems, ideological differences. In Argentina in particular, what stands out is that this occurs in a context where the president seeks to refound the country, and he has an anti-political position and discourse, despising politics, and he is paying a very high price for that.
To suppose that one can, technocratically, take measures in quotes, correct measures, to change society, is absurd where history has shown that this always systematically fails. At most, there exists some short-term measure that may work, but sooner or later its effects reverse. We have seen this with authoritative governments like Onganía's or the National Reorganization Process, but also democratic ones like part of Raúl Alfonsín's Austral Plan and then with Carlos Menem. This utopia of changing societies in an orderly, neat, clean way, like in the private sector (as if there weren't politics in this sector!!), is absurd and has not happened anywhere in the world.
What we are seeing now is a learning process for the president, but also for the other political actors who do not get used to this kind of shock or earthquake that Argentine politics suffered with Javier Milei's victory, which is the expression of the failure of the old politics. And there is a part of this that does not recognize it and another that does, but does not get used to this new reality or does not know how to realign. Therefore, there exists a learning process for the government, which has inexperienced officials, starting with the president himself, or the vice president, or the general secretary of the presidency, or the main presidential advisor. Therefore, what we have to expect are childish mistakes (which is what is happening). But at the same time, I see a huge amount of pragmatism: Milei criticizes those he calls "libertontists" for the things he said during the electoral campaign. That seems to me a sign of maturity, because one thing is to campaign and another is to sit on the Rivadavia armchair and make decisions. If you go in with the naivety and freshness of a campaign, you won't last long in power.
Milei's pragmatism seems to me a positive trait. For some of my pro-market and liberal friends, it is a kind of sacrilege for the government to intervene in the financial market or not to move away from the foreign exchange clamp, and for others, it is a sign of maturity and common sense (mainly the more heterodox), so from that perspective, the situation is interesting.
What concerns me? There is what is called "social patience," a society that tolerates an unprecedented adjustment, a drop in income, and a very deep recession, and the question is until when? We do not have the answer, of course, but many of these pointless political fights erode a bit the confidence in the government. We see the president ranting against the media just as or worse than Néstor Kirchner, insulting journalists who when he was employed by Scioli in the presidential campaign of 2015 and was paid with funds from the Bank of the Province of Buenos Aires; those journalists risked their lives against Cristina, for example, denouncing the memorandum of understanding with Iran. Those things, of course, generate fear, concern, negative reactions in many people, and it makes sense.
Others believe that the president, by not building a more solid political structure, by not accepting the help of his allies is losing a great opportunity. What has happened in recent days shows us that Milei is aware of this situation, since we have seen a president a little more sensible, who is building a somewhat more resilient framework. The market demands economic corrections, greater profitability, transparency in economic decisions, but above all it demands political certainty. Foreign and local investors ask for it.
Last point. The government is quite aware of some of its limitations. For example, the Minister of Economy, Luis Caputo, brings to his team perhaps the most prestigious economist to have held a significant position in Argentina in a long time: José Luis Garza. A Chilean national, he is a man with great experience on Wall Street, with academic training, with knowledge of multilateral organizations, who comes to add much management experience and prestige in the markets to the team, and, I believe, a freshness for decision-making to get out of complex situations like the famous foreign exchange clamp, which has allowed the government to have this relatively quiet transition and at the same time prevents a somewhat more vigorous economic recovery.
Miguel Steuerman: If you had a call from the president today, what would you tell him?
Sergio Berensztein: With great modesty, right? Because nothing is more difficult than sitting in that place. It is the worst job one can have, regardless of the country one is in and the circumstances. The first thing is to understand, and obviously to be very prudent when making any suggestions. The president has more information than any analyst, even those of us obsessively monitoring reality, looking for indicators and observing public opinion behavior. The president is the one who knows his own limitations best, but with all these precautions, I would say he has to review his government team. Something that presidents do permanently and after these ten months of management is a good opportunity to look and ask what works well, poorly, or moderately. There is always something to improve, and one should not be afraid to make changes.
This perspective offers possibilities, such as strengthening his relationship with Mauricio Macri and with other allied sectors, incorporating people with management experience, political wisdom, with a slightly broader agenda and less prejudice. Milei can perfectly maintain his positions, values, and ideas, but to advance down the path of pragmatism seems to me something to consider, and always with respect.
Another suggestion would be to pay attention to thinking about controversial measures considering the context. For example, the government has just decided to open the importation of steel and aluminum. Argentina has groups that produce this, at higher prices…everything is more expensive in our country…shoes are more expensive, underwear is more expensive…steel and aluminum are also so. Why? Because of labor, tax costs, financing, logistics…everything in Argentina is very difficult. Now, will you open the economy and destroy industrial jobs in critical areas when the world is revising that policy, starting with the United States, which proposes protectionist policies? Will you generate more demand for dollars when you have no dollars? I think it could be a good policy to open the economy so that the price of imported products can put downward pressure on local prices, but I am not sure that this is the moment, considering the context, and mainly the 'timing'. Give these companies a year to reconvert, tell them 'I will bring your costs to international levels, but give me international prices'. What you cannot do is ask companies for international prices with Argentine costs.
Miguel Steuerman: Let me tell you something to conclude, which is precisely related to what you just said. This week I was with an official of what we could call the "core of the president." And I asked him about the government's perspective on this issue. The answer was: 'We take care of the macro, we don't want to know anything about the micro.' One wonders if this is possible, where is the exact line that divides one from the other. And he added: 'We will take care of the fiscal deficit, of what the president understands; the rest we leave to the businessmen.' I believe it is a matter that has its risks, considering what can happen in very specific sectors.
Sergio Berensztein: Totally agree. I believe that without an orderly macroeconomics, without controlled public accounts, it is impossible to plan anything and the country has no direction without that foundation, but letting the market solve everything has enormous costs that no country does. It seems to me that the pragmatism that the government has shown in so many areas should also prevail in this aspect, especially because the little "formal" employment we have needs to be protected, safeguarded, giving companies the opportunity to modernize, become more competitive, but not overnight by changing the rules. If you are a foreign investor and you see that, what do you ask yourself? Will he do the same to me tomorrow?
Miguel Steuerman: Sergio, thank you for taking this opportunity to occupy your time to understand a little more about those issues that sometimes are not within the reach of all of us. And it is true, as you have raised, cultural transformation processes, and in democracy, are complex, take time, and are filled with frictions between different interests. Sergio Berensztein, Political Analyst and a man who permanently monitors the current Argentine political situation.
Sergio Berensztein PhD in Political Science (University of North Carolina, Chapel Hill) and Bachelor's in History (UBA). He obtained a Certificate in Social Science Research at CEDES (Center for State and Society Studies). He is president of Berensztein®, a consultancy for political and strategic analysis that he founded in 2014, with a regional and comparative perspective based on rigorous and innovative research methods, both traditional (qualitative and quantitative) and big data. He works with some of the main leaders of Argentina and the region, from both the public and private sectors, helping them understand the changing domestic and global environment, and make decisions in a context of high uncertainty. He usually gives lectures and master classes inside and outside Argentina, both in Spanish and in English. He also serves as a professor in the Master's in Business at the Economic Sciences Faculty of UBA. Since early 2019, he was appointed president of IPS (International Press Service) for Latin America.
He has served as an advisor to large international organizations like the CoAndean Development Corporation (CAF), Inter-American Development Bank (IDB), International Monetary Fund (IMF), United Nations Development Programme (UNDP), and World Bank (WB).
He served as the director of the Master's in Public Policy and taught in various programs at Torcuato Di Tella University (1997-2017), where he was part of the Board of Directors (2012-2014). He was also a visiting professor at academic institutions abroad such as Duke, Georgetown, Stanford, Princeton, New Mexico universities, FLACSO, and CIDE (Mexico) and Salamanca (Spain).
He is the author of the books “The First Fiscal Revolt in History. The 125 and the Conflict with the Agricultural Sector” (together with María Elisa Peirano, Margen izquierdo, 2020), “Are We All Peronists?” (El Ateneo 2019), “Why Do All Governments Fail?” (together with Marcos Buscaglia, El Ateneo, 2018), “Owners of Success” (with Alberto Schuster, Edición, 2017), “The Benefits of Freedom” (together with Marcos Buscaglia, El Ateneo, 2016), 125 Years of Banco Nación (Banco Nación, 2016), and “The Narco Power” (together with Eugenio Burzaco, Sudamericana, 2014), among others. He has also published more than 30 academic articles in specialized journals and edited volumes.
He serves as the host of “Power and Money,” for Americano Media (Miami). He is also the host of El Tornillo (City Channel) and co-host of Radioinforme 3, for Cadena 3 Rosario. He was co-host of the radio programs “Politically Incorrect” (Radio Rivadavia), “Return Flight” (Milenium), and “Politics and Balls” (Splendid). He was also co-host of “Intellectual Emergency” (América TV), panelist on "Loose Animals" (América TV), and columnist for A24. He regularly publishes opinion columns in the newspaper La Nación, TN.com.ar, and El Cronista Comercial, and previously in the newspapers Perfil and La Gaceta, and is frequently consulted by the main media outlets in the country and abroad.
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