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Argentina's soya war is now out-and-out political


Aaaaaaaaaaah........ relief from Otto again! A regular reader wrote me a mail this morning on the Cobos drama, and because his observations were different from mine and very sharp, I asked him if I could post his mail up here. He came back with one better; the note that follows. So thank you "Latino Observer" for taking the time out and giving us another angle on the whole Argentine Agro happenings. Enjoy!


Argentina's soya war is now out-and-out political

Cristina's government suffered a setback in the early hours of July 17th by losing the Senate vote to approve the soya export tax legislation. The vote was a 36 - 36 tie but Vice President Cobos' casting vote went ….TO THE OPPOSITION, thus defeating the government's proposals.

Veep Cobos' "betrayal" will stir up a political shit storm. We all know that this is not just about taxes and will now become an even more political conflict than it was before. Cobos should be out on his ear in double time. The question is whether he was "rewarded for his vote" by certain economic interests?

No doubt the Argentine media which is clearly anti-Cristina will portray this as a "fracture in the government ranks"; hence political crisis; hence government weakened; this will keep up the pressure on Néstor and Cristina, and in this way maintain indecent historical economic privileges. We will see the outcome shortly, but Cristina's vision of a "new more equitable Argentina" is certainly on hold for the moment.

Cristina's government is facing what Venezuela did in 2001/2003. Chavez passed 49 new laws which prejudiced the ruling oligarchy's interests and so they tried an ouster. Well, not try, they did overthrow him for 47 hours.

There is a similar scenario in Argentina as social conflicts and polarization sets in, especially if the government tries to revive the tax-on-soya legislation. It is obliged to do this in order to have enough income to institute effective social/health programs and in this way revive its flagging popularity and set the stage for Néstor's re-election in 2011.

With soyabeans reaching more than US$15/bushel on the CBOT – the highest level since the Soviet Great Grain Robbery of the early 1970's, Argentina's farmers are raking in billions of dollars. Maybe, they could offset any future conflict with Cristina, if, for example, they made some "voluntary social contributions" to Argentina's poor and excluded? This is very unlikely but it would certainly take the wind out of Cristina's sails.

What is almost incomprehensible is that the Argentines have very, very short memories. The middle classes are supporting the agro boys when, back in 2001, the banks (same economic and political class as the landed oligarchy) shipped all the dollars out of the country in armored vehicles driven to Ezeiza airport, ripped off middle class savers and depositors and so on. There was no law to prevent dollars being flown out of the country, so nothing "illegal" was done. Amazing!?

Now, the historical oligarchic political class which includes the big agro boys, is being supported by the middle classes who were shafted themselves by this very same political class. This is tantamount to self flagellation and can only be explained by 1) the effect of the anti Cristina and anti Néstor media and 2) a general scorn by the moneyed classes for the destiny of their poor countrymen 3) historically Peronism screwed up left and right politics which are not clear cut.

With all the mainstream media supporting the agro boys (as they did with Menem regime, since the media is owned by intertwined economic interests from other financial sectors of the Argentine economy) it's not been too difficult to demonize the government. This is despite the "good intentions" to bring about more social equality in Argentina - as Chavez has done in Venezuela.

You will remember back during the 2001-2002 crisis that there was real hunger among the poor in Argentina, but the agro boys kept on exporting, and exporting. With enough food grown in Argentina to feed 500 million people, how could any government permit hunger? Argentina is not Sudan or Ethiopia, but it could soon be similar to Bolivia, Ecuador and Venezuela when the next battle of government vs. landed oligarchy is announced.

Guest blogger – Latino Observer