What does it mean when Eduardo Duhalde, the newly installed president of Argentina, announces his economic policies will favor the productive sector over the financial sector? Within three days of taking office, he was already currying popular favor by taking shots at the banks.
On Friday, in a choice piece of rhetoric during a speech to a group of industry executives, Duhalde said, "We have to end the decades in Argentina of an alliance that has made the country suffer, and that's the alliance between the political power and the financial sector." This is unquestionably a very strange statement given that Duhalde is from the Peronist party, which was in power for all but two years since 1989.
So the Peronists' top man -- in fact their presidential nominee in 1999 -- now admits that his own party is responsible for the country's misfortunes and economic suffering. And I emphasize his reference to an "alliance" between the political and financial sector which sounds like an admission of corruption.
Step back for a moment and you will realize that the Peronist party must be anything but unified. One may argue that the greatest threat to Duhalde's presidency is none other than former president Carlos Menem.
It was Menem who, in 1991, installed a currency board and pegged the peso to the dollar. This is the system that Duhalde is now dismantling with extreme prejudice. How can one read Duhalde's remarks as anything but a slur on Menem? Argentina burns as these Peronist politicians squabble over power.
Banks make a nice target for Duhalde because they were allowed to flourish in the 1990s with the help of the currency board. Menem boasted of having built Argentina into a financial stronghold, encouraging an influx of foreign banks.
If all else fails, you can blame your troubles on foreigners. Even better, put the blame on foreigners who prospered in the glory days. Surely they are to blame for the nation's troubles.
From that perspective, Duhalde's outburst against the banks takes on an insidious "us versus them" populist taint.
The critical question will be how far Duhalde goes in erasing dollar assets from the banks by "pesoizing," or turning dollar-denominated debt into peso-denominated debt. It's a crowd pleaser because it removes the weight of dollar indebtedness on ordinary Argentines in the face of devaluation.
Underlying this is a dangerous belief that banks are some kind of unlimited reservoir of wealth that can be tapped at will. Banks are rich, right? Actually, they're not. The banks in Argentina are, for all practical purposes, on very thin ice.
If the idea of pesoizing bank assets goes far enough, Duhalde will not have to worry about not favoring the banks in his economic blueprint. He won't have to worry about the banks, you see, because there aren't going to be any -- he will have killed them dead. And if he thinks he can do that and last, he is very much mistaken. At the end of the story is a simple truth. Argentina cannot survive without its banks.
David DeRosa, president of DeRosa Research & Trading, is also an adjunct finance professor at Yale School of Management and the author of In Defense of Free Capital Markets.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
RESTAURANT POISONING? Deputy Minister of Health and Welfare Victor Wang at a press conference last night said this was the first time bongkrekic acid was detected in Taiwan An autopsy discovered bongkrekic acid in a specimen collected from a person who died from food poisoning after dining at the Malaysian restaurant chain Polam Kopitiam, the Ministry of Health and Welfare said at a news conference last night. It was the first time bongkrekic acid was detected in Taiwan, Deputy Minister of Health and Welfare Victor Wang (王必勝) said. The testing conducted by forensic specialists at National Taiwan University was facilitated after a hospital voluntarily offered standard samples it had in stock that are required to test for bongkrekic acid, he said. Wang told the news conference that testing would continue despite
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)