Simon Angelo worked for the world’s first regulated Bitcoin fund in 2016. He currently works at a trading desk for Wholesale Investors. His work in offshore finance and global banking gives him some insights on the future of money.

When Bitcoin was a special opportunity

In October 2016, when I started working with the Bitcoin fund, a Bitcoin cost around NZD $900. Today it sits at around NZD $62,000.

Back then, the principals of the fund saw Bitcoin rather like the oil futures they had traded in the 1980s.

These were the early days of deregulation in the oil industry. Oil reserves were depleted. Demand from China was coming on stream. More oil production would be needed. The price could only go up.

It was a market with plenty of volatility, illiquidity, and scant regulation. It was all pretty chaotic. Yet there were global forces at play. These would give rise to an oil and commodity bull market, bursting a dam of money.

In 2016, they saw similar potential for Bitcoin, just as they’d seen for oil back in 1987.

There was a long runway ahead. A destination where the technology becomes widely adopted. And the potential for Bitcoin to change money as we know it.

Were they right?

Yes, there’s been an overall Bitcoin bull market. The price has grown almost 7,000% since 2016 — though there’s been plenty of volatility.

Yet much of the wider mainstream adoption they predicted hasn’t happened. Like other cryptocurrencies, Bitcoin remains a mainly speculative instrument.

Does this mean Bitcoin and other cryptocurrencies still have a bigger part to play in the future of money? What about the alternatives?

Banking and currency

Modern banking has come a long way.

With the click of a mouse and a confirmation on your phone, you can send funds around the world. This can be to other bank accounts, to brokerage accounts, or even to global smart-card services and digital wallets.

But for those seeking privacy or protection of their wealth, banking alone can fall short.

On the privacy front, okay, the ordinary punter doesn’t typically expect Swiss-style bank secrecy. Though even that is limited these days for requests made under CRS and FATCA rules.

Most alarming was the freezing of accounts for protest groups during the Canadian trucker convoy protests in 2022. This crossed the line from tax-related access to access for political purposes.

To my way of thinking, this tarnished the reputation of both the Canadian dollar and the Canadian banking system.

Increasing and invasive bureaucracy can actually limit trust in the banking system. It risks driving more people into ‘offgrid’ instruments like cryptocurrency.

A robust financial system should retain strong property rights separate from the state. Where access is limited only to tax enforcement via transparent court orders.

Unfortunately, the creep of bureaucracy has been a theme of our time.

What about CBDCs or other digital currencies?

According to a 2021 survey, central bank digital currencies were currently being looked at by 86% of central banks around the world.

60% were experimenting with the technology.

14% were deploying pilot projects.

The RBNZ has embarked on a 4-stage process and is currently at stage 2: ‘exploring high level design options for the CBDC, and their costs and benefits.’

The primary objectives of CBDCs are to help maintain trust in local currency, maintain price stability, and ensure safe and resilient payment systems.

Some analysts have pointed out that CBDCs could actually reduce trust in currencies, since they could be open to more government manipulation.

The Canadian trucker convoy protests saw about 280 bank accounts frozen without court orders under the Emergencies Act.

For people using CBDCs, the question is then what checks and balances would be in place to prevent bureaucrats simply turning them off?

Perhaps, for instance, you’ve been found mobilising a protest they deem political wrongthink. Even dangerous. Could your CBDCs be frozen or penalised at the click of a bureaucrat’s mouse?

Again, we come back to the most crucial aspect of money: It needs to be trusted.

If people have doubts about their government, or their public service, they might be unlikely to trust a CBDC. Willingness to embrace and accept it may be low.

It’s the same situation with the plethora of digital currencies out there. Who backs them? How can you trust them?

That’s the beauty a cryptocurrency like Bitcoin has (as opposed to a digital currency). It is backed by the incontrovertible verification system of the blockchain.

Which brings us to the other essential quality of money… 

Will it hold its value?

In Argentina, lack of trust in the government’s fiat currency — the peso — is entwined with another key problem.

Last week, inflation topped 140%. That means much of what you go to buy now costs more than double compared to just a year ago.

People give up buying new things and head to the second-hand or thrift market for items as simple as a pair of jeans.

An Argentinean friend of mine told me about his local hardware store with no pricing on the shelves. ‘You have to take everything up to the cashier to get the latest price.’

Well, trust is so low in the peso it may now face its demise.

The country’s presidential front-runner, former financial analyst Javier Milei, has pledged to scrap the central bank and dollarise the economy.

As we were going to press,  it was announced that Milei had won the presidential elections in provisional results.

If he goes ahead with his pledge on the currency, this could be a game changer. No country Argentina’s size has previously shed their currency for the US dollar and conceded their monetary policy to Washington.

A switch to the US dollar would be a radical step, no doubt. Yet already locals try to get their hands on as much USD as they can buy.

Property prices are listed in USD to protect against inflation.

Clearly, if a currency is to be trusted and accepted, it also needs to be stable.

This is the flipside with cryptocurrency. Values are volatile. If you were to settle on a house purchase with Bitcoin — then Bitcoin suddenly drops 10% — you’d find that house now costs 10% more when paying that way.

Which is why these cryptocurrencies have upside for trading and investment, as opposed to being a reliable medium of exchange.

Furthermore, there are thousands of cryptocurrencies. Most need significant processing power and some time to transact. So they have intrinsic limitations when it comes to becoming the real future of money.

Inflation and the future

Today, although interest rates are higher on savings, after tax, the greasy pole of inflation makes it hard to keep pace.

By definition, protecting your wealth means you may want to put longer-term funds into productive assets like stocks or property. The lesson from crises throughout history, including the Second World War, is that quality businesses can still produce, sell, and grow their value over time.

Bitcoin and cryptocurrencies do not fit into the category of productive assets. This is because their main use today is as a speculative investment and alternative store of value.

That store of value, like gold, is based on limited supply. But unlike gold, the cryptocurrencies themselves could be subject to competition and regulation. Not to mention the inherent volatility.

So, would Bitcoin interest me as much today as it did in 2016?

Well, back then, at $900, a 7,000% return was possible in five years.

But at ~$62,000, it is hard to even see $100,000 over the next five years. Holding coins over this time would also carry risk and, unless lent out, usually no yield.

Meanwhile, trust in fiat currency comes down to its ability to store value and act as a reliable medium of exchange around the world.

This is the reason why the US dollar continues to reign supreme as the world’s reserve currency. Some say it is under threat by a potential BRICS dollar that could be backed by gold.

It is hard to see the reality of this threat. The BRICS countries have divergent interests. The US dollar is backed by the world’s largest single base of taxpayers.

Thus far, the Federal Reserve has been amongst the more successful in tackling inflation. It is currently down to 3.2% in the US, gradually nearing the target of 2%.

Yes, the proportion of US dollar reserves held globally has reduced. The main reason for this appears to be the emergence of another large and reliable currency in the euro.

If our local currency weakened or looked to be threatened by out-of-control inflation, unfair manipulations of a potential CBDC, or a manifestly corrupt government, I would probably be looking for a more reliable currency such as the US dollar or euro to transact and hold wealth.

Further, holding listed assets in these currencies can help investors to diversify.

The future of money comes down to faith and trust. Like so much else does in life.

We cannot prove that our close family members love us absolutely. But we have faith that they do. Spouses promise as much at the wedding altar.

As the US dollar declares: ‘In God We Trust’. Adopted as the official motto of the United States in 1956, it denotes that ‘the political and economic prosperity of the nation is in God’s hands.’

Long may that remain, for when too much is placed in the hands of man and bureaucracy, all trust can soon erode.

For now, the real future for money is likely in the expansion of financial products that offer access to quality currencies and quality assets denominated in them.

For example, smart cards that allow you to transact offshore currencies in a cost-effective way. Brokerage accounts that allow you to hold offshore assets for growth and income. And the ability to access various currencies via lending margin on the assets you hold.

Of course, many of these sort of products will be suitable for more sophisticated investors only. Any leverage adds risk. And most people should always have a suitable level of emergency funds available at all times.

Perhaps the future for Bitcoin and oil will intersect again.

Supply of both appears limited. Appetite is strong yet uncertain. But prices are currently high, making it hard to foresee the sort of breakout we saw in 1987 or 2016.

Simon Angelo, Editor, Wealth Morning – www.WealthMorning.com

(This article is the author’s personal opinion and commentary. It is general in nature and should not be construed as any financial or investment advice. Readers should seek independent advice from a licensed Financial Advice Provider for their own situation.)

Argentinian winger Emiliano Boffelli scored all his team’s points as they defeated Manu Samoa 19-10 at the Stade Geoffroy-Guichard in Saint-Étienne, France, yesterday in a Rugby World Cup pool D match.

That gave the Pumas their first win at the tournament and keeps their hopes alive of claiming a quarterfinal berth, with two matches against Chile and Japan on the line.

Manu Samoa head coach Vaovasamanaia Seilala Mapusua said he regretted the way they lost the match, after having had their own fair share of opportunities and not executing their chances well.

Rain fell as the game started and the slippery ball became a challenge to control.

Missed opportunities gave Manu Samoa away in the first half as Argentina led 13-3 at halftime.

Christian Leali’ifano, trusted for his goal-kicking accuracy, missed two kickable penalties which could have secured the Samoans six extra points in the half.

Then after having put the Pumas scrum under pressure, halfback Jonathan Tumataene knocked on metres from the Pumas’ tryline in what could have turned the momentum their way, close to halftime.

Pumas feed off Samoan mistakes
Argentina fed off the Samoans’ mistakes and Boffelli had scored all his team’s 13 points in the first half — a try, conversion and a penalty.

Vaovasamanaia said they missed their chance of getting the win, but the Pumas adapted well to the atmosphere.

“We made too many mistakes and we didn’t adapt to the conditions, particularly at the start of the game,” he said.

“I thought Argentina executed their gameplan really well and we weren’t able to adapt. We knew that with [Emiliano] Boffelli in their team that they could slot them from anywhere and getting that yellow card early on didn’t help us.”

Vaovasamanaia said the momentum towards the end of the game was exciting but they ran out of time.

“There’s always a possibility when there’s time on the clock, unfortunately for us we ran out of time. We weren’t able to get our game going, but I’m really proud of the boys’ efforts.”

A few opportunities
He added the team created a few opportunities but did not finish that off.

“If we had finished off some of those moves, it would have become a very different game.”

Captain for the day, Chris Vui, said it was a tough clash, but they also had their chances which they did not use to their advantage.

“In this sort of game, you need to execute and take the opportunities, and for us, we probably did not take it,” he said.

“Extremely proud of the boys today. That was an awesome game. I thought both teams played that flair rugby that rugby’s missing at the moment.

“There was huge collisions. Personally, I really enjoyed it.”

He said they missed the opportunity to swing the game their way towards the first half.

A huge opportunity
“That opportunity was huge for us. That could have changed the momentum of the game,” he said.

“We probably needed to change that momentum back to us and we didn’t execute. Games like these, you only ever get one or two chances, and that was one of them.

“Next week, we’re going to look at it, and we’re going to be better for it.”

Samoa will focus on Japan, who they play next weekend.

One of the key areas they will have to work on is keeping the ball in hand, which Vaovasamanaia said is something they have been working on, even after their win over Chile two weekends ago.

“It is something we addressed last week and we will need to address that again, nailing those core roles in crucial moments. The more time we spend being put under those types of pressure will help us improve,” he added.

Samoa pressured early
Samoa was under pressure early in the game after fullback Duncan Paia’aua was yellow-carded for what referee Nic Berry of Australia was a dangerous tackle after the Pumas fullback Juan Martin Gonzales had jumped high to take the ball and landed with his head towards the ground.

Berry claimed that Paia’aua had interfered with Gonzales, thus the penalty.

The Pumas made use of the opportunity as Samoa was one man down and Boffelli stepped back in to score a try. He kicked the conversion for his team to lead 7-0.

Manu Samoa won a penalty inside the Pumas half minutes later but Leali’ifano swung the ball wide.

Boffelli extended his team’s lead to 10-0 with another successful attempt before Leali’ifano raised the flags with his attempt that went off the crossbar, reducing the scoreline to 10-3.

Then Boffelli added another penalty as the Pumas led 13-3 at the breather.

Showing good cohesion in the lineouts, the Pumas started dominating with their driving mauls as the second spell resumed.

Boffelli added another penalty before the Samoans turned the fire on.

With time ticking away and a possible bonus points on offer the Samoans went on attack again.

Flanker Fritz Lee knocked on as they countered and a possible try went begging.

Replacement Sama Malolo then dived over in a forward rush after a tap penalty five metres from the Aregentinian tryline.

Alai D’Angelo Leuila converted and the Samoans were back in the game at 16-10.

Boffelli then stepped up to have the last say of the game when he fielded another successful penalty to give the Pumas the 19-10 victory.

Game statistics
Argentina enjoyed the possession and territory more on attack.

They had 62 percent of possession in the game and 59 percent of the territory.

The Pumas also carried the ball more, covering 602 metres compared to Samoa’s 239.

In the set-pieces, Argentina dominated too winning 94 rucks and mauls against Manu Samoa’s tally of 49.

In defence, Samoa managed to make 141 tackles, which meant they were under pressure more while the Pumas were only required to make 77 tackles.

Samoa lost three lineout throws but managed to match the Pumas in the scrums.

Both teams had high penalty counts, with Samoa giving away 13 and Argentina 11.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Manu Samoa have made only three changes to their starting lineup to maintain consistency and ensure game flow against Argentina in a must-win Pool D clash in Saint-Étienne on Saturday morning (NZ time).

Head coach Vaovasamanaia Seilala Mapusua has named Paul-Alo Emile in the front row, Paul Ala’nu’uese at lock and Ben Lam on the wing in the Rugby World Cup battle.

Lock Chris Vui gets to lead the team out with his co-captain and prop Michael Ala’alatoa on the bench.

Samoa needs to win the clash to give them an advantage over the Pumas, who lost their first game to England a fortnight ago.

England has two wins and leads on the points table.

Samoa are second but need the win to give them a better chance of qualifying for the quarterfinals.

Mapusua said they are focused on stopping the South Americans, but they will need to execute correctly.

‘Under no illusion’
“We are going to have to stop Argentina from doing what they do by doing what we do and committing to how we want to play,” he told media at the team naming in Saint-Étienne.

“We are under no illusion to the threat Argentina pose and we believe that if we stick to how we want to play and play the Samoa way, I am confident we will be able to stop Argentina.”

He said the three players who had been given starting roles were being brought in against the Pumas because of their strengths.

“Brian (Alainu’u’ese, second row) has been training really well and this was a game we thought his strengths would be utilised, especially around the set-piece,” he said.

“Ben Lam has just become available after sustaining an injury a few weeks ago. He is now fit and ready to go.

“We were worried when he sustained his injury. He’s a lot on the edge for us, he’s a very big man who can move quickly . . . he brings a lot to the wider channels, his pure power and the way he plays the game. We are looking forward to finally getting him on the field this weekend.”

Sopoaga ruled out
But he will not have former All Black Lima Sopoaga, who came off the bench against Chile last weekend.

“With Lima Sopoaga’s omission [from the match-day squad], I think it’s been circulated, he sustained a (calf) injury last week against Chile,” the coach revealed.

“He was ruled out this week, we ruled him out as a precautionary. Also, because of the nature of his injury he wasn’t ready to play this week. We will reassess at the weekend towards next week’s game.”

Mapusua said his team understood how important it was for them to start well, remain consistent and finish strong, unlike their first half performance against Chile.

“The boys have realised we are in the tournament, we’ve arrived at the party. There are no second chances so this week the whole squad, there has been a real lift and energy. We know we have got a huge game coming up,” he said.

“We won’t be short of motivation.

‘Confidence in what we are doing’
Fiji’s 22-15 win over Australia last weekend is motivation also for the side as they go into the battle with what Vaovasamanaia calls an “injured Los Pumas”.

“We had confidence before the game, confidence that Fiji were going to get over and also confidence in what we are doing. That’s awesome to see our Pacific brothers doing really well and we are always going to be behind them until we have to play each other.

“We are proud of them and of course we are going to take inspiration and confidence from that. But I’d be more inclined to take confidence from the work and preparation this group of men have done over the past few months.”

Flyhalf Christian Leali’ifano will man the pivotal playmaker role and said he was excited to meet Argentina, coached by his former Wallaby headman Michael Cheika.

Cheika was Wallabies coach at the 2019 Rugby World Cup where Leali’ifano was a key player for the side.

“Excited for the challenge ahead,” Leali’ifano said.

“Not only a former coach there in Michael Cheika but just the challenge that lays ahead for this team, this group to play a tier-one nation that historically did really well at a World Cup.”

The Samoa – Argentina clash kicks off at the Stade Geoffroy Guichard, Saint Étienne at 3.45am (NZ Time) or 4.45am in Samoa on Saturday.

This article is republished under a community partnership agreement with RNZ.

Samoa team:
1 James Lay, 2 Seilala Lam, 3 Paul Alo-Emile, 4 Brian Alainu’u’ese,5 Chris Vui (c), 6 Theo McFarland, 7 Fritz Lee, 8 Steven Luatua, 9 Jonathan Taumateine, 10 Christian Leali’ifano, 11 Ben Lam, 12 Tumua Manu, 13 Ulupano Junior Seuteni, 14 Nigel Ah-Wong, 15 Duncan Paia’aua.
Reserves: 16 Sama Malolo, 17 Charlie Faumuina, 18 Michael Alaalatoa, 19 Taleni Junior Agaese Seu, 20 Sa Jordan Taufua, 21 Melani Matavao, 22 Alai D’Angelo Leuila, 23 Danny Toala.

Article by AsiaPacificReport.nz

A View from Afar – In this podcast, political scientist Paul Buchanan and Selwyn Manning examine political events taking shape in South America.

In particular, Buchanan and Manning detail how there is a presidential run-off election in Colombia this Saturday and examine the outcomes of recent elections in Chile, Nicaragua, Honduras and Peru.

Paul takes us through the political landscape and highlights what this means for populism, left-right ideologies and for the South American continent and its respective political partners.

For example; in this episode Buchanan and Manning examine the so-called Pink Tide of (supposed) indigenous socialism started by Hugo Chavez and Evo Morales – and what relevancy this has had with regard to the Summit of Americas.

And, with respect to the Summit of Americas, this event is used as a test of how far the United States has fallen as a global leader.

QUESTIONS:
What is the latest emerging from the political hot-bed of South America?
What are the political trends there with populism, pragmatism, and left-right ideologies?
Why has the Summit of Americas been regarded as a fiasco and how does this impact on the United States’ reputation?

You can comment on this debate by clicking on one of these social media channels and interacting in the social media’s comment area. Here are the links:

• Facebook.com/selwyn.manning
• Youtube
• Twitter.com/Selwyn_Manning

If you miss the LIVE Episode, you can see it as video-on-demand, and earlier episodes too, by checking out EveningReport.nz or, subscribe to the Evening Report podcast here.

The MIL Network’s podcast A View from Afar was Nominated as a Top  Defence Security Podcast by Threat.Technology – a London-based cyber security news publication.

Threat.Technology placed A View from Afar at 9th in its 20 Best Defence Security Podcasts of 2021 category. You can follow A View from Afar via our affiliate syndicators.

By Rafael R. Ioris
From Denver, Colorado

Confirming what scientists had been saying for the last several years, a new global pandemic has brought the entire world to a halt in the last three months. The rapid spreading of a new form of Coronavirus, called COVID-19, stalled global commercial chains among countries and forced societies to find new ways to run business, educational systems, and even the very operations of political deliberation. Teleconferencing, online education, and zoom-based legislative sessions became the new normal and no one is certain of when things can go back to the dynamic before the pandemic. Mirroring these events, Latin America has now become the epicenter of the spreading of the new virus, especially in its largest countries, Brazil^[1] and Mexico,^[2] where contagion rates and death tolls are on the rise.

A continent historically plagued by weak and non-democratic political institutions and entrenched huge socio-economic inequalities, Latin America’s experiences with COVID-19 have been largely defined, very much along the situation unfolding in the US, by political inability and ideological polarization. And even though there are notable exceptions, these factors have mired the region’s ability to cope with the new challenges brought up by the rapid spread of the new virus.

In a general sense, size has mattered in the ways COVID-19 infection rates were manifested in Latin America. Several smaller countries, like Uruguay^[3] and Paraguay,^[4] managed to almost stop contagion with rigid border controls, something which tragically hardened some nationalist feelings present across the region prior to the arrival of COVID-19. Addition to these strategies, Nicaragua^[5] had a different approach, keeping borders open so they could incentivize people coming through border controls and allow examinations by health authorities, something that seems to have been working well so far.

Counter-intuitively, larger countries, like Brazil, which usually possess better public health resources have fared more poorly though it is likely that things would have even worse were it not for institutions such as its Unified System of Public Health (SUS^[6]). In effect, conversely to what is undergoing in Argentina,^[7] a country with the region’s fourth largest population and where rigid stay-at-home policies were successfully implemented, and echoing events that also hindered the decision-making process in the US, Brazilian president Jair Bolsonaro at first denied the very threat posed by COVID-19 and then continued to undermine efforts promoted by their country’s important scientific, academic and public health professionals. Also in tandem with experiences of the United States, it is likely that Brazil’s federalist constitutional^[8] framework helped minimize the impact of COVID-19 in the country as it allowed local governors to act more assertively in mandating stay-at-home policies Bolsonaro’s efforts to maintain commercial activities open, notwithstanding.

In any event, Brazil faces today its most challenging public health crisis. The country has recorded^[9] at least 930,000 coronavirus cases, registered a death toll around 46,000, and displays the steepest curve of ascending cases in the world. Intensifying the regional challenges, a country where COVID-19 cases have taken a bit longer to gain momentum, Mexico now sees a rapid worsening of cases, having recorded^[10] its worst week since the outbreak, both in confirmed cases (around 150,000) and deaths (around 18,000).

It should be noted that even though any nation with the social stratification existing in Latin America would equally face tremendous hurdles to attend to the many sanitary crises accentuated by the new coronavirus, the lack of efficient, coherent leadership and inclusive decision-making processes present in Latin American has certainly made things much worse. For one, stay-at-home policies could not be put in place in efficient ways since significant portions of workers simply could not afford to stop working in the streets since their very livelihood would thus be denied.

Regionally the informal sector^[11] employs from a third to half of each country’s workforce and, especially where government economic aid was not forthcoming or was otherwise insufficient, it became extremely challenging to many not to venture outside in search of some form of remuneration or gain. Much in the same way, the halting of in-classroom education and its replacement for online education, though present across the region, impacted people differently depending on their socio-economic position. To be sure, the manifestation and especially the impacts of COVID-19 in Latin America varied according to people’s zip codes and racial composition. In effect, facing COVID-19 depended largely on one’s socio-economic reality,^[12] i.e. one’s economic means, type of employment, educational background, place and type of residence, etc.

In short, being able to have access to online education, managing social or physical distancing, and following stay-at-home policies, all depended on one’s place in the entrenched stratified societies of Latin America. These challenges have been intensified by both the political fragmentation and economic slowdown most countries in the region faced prior to the arrival of COVID-19. Latin America’s political fragmentation^[13] is today at its highest degree since the dawn of the 21st century and their most of the region’s domestic political arenas are largely defined by intense political polarization, which means that the anti-COVID-19 policies have been, in most places, mired in ideological disputes and conflicts. Coronavirus will also worsen the mediocre economic growth^[14] most countries in the region have seen in the last five years, thus also intensifying existing regional economic disparities.

Adding to the many existing and growing challenges each country in the region faces, regional political coordination, such as the sharing of successful policies put in place in one country, has become a more difficult, though still a potentially important line of action. In fact, even though Latin America, particularly South America, has experienced its most promising period of regional cooperation in the first two decades of the 21st century, regional multilateralism has rapidly eroded in the last two years.

This was a process involving the coordination of US policies to the region in order to undermine rising levels of autonomy created by new regional agencies, such as UNASUR, including by resorting once again to turning the Organization of American States^[15] into a diplomatic instrument for the promotion of US interests in the region. The arrival to power of Jair Bolsonaro and its policy of direct alignment^[16] with the US has consolidated these new trends. In effect, deepening his xenophobic isolationism, and mimicking Trump’s views and policies, the Brazilian president has recently accused the World Health Organization of being an ideologically driven organization, from which Brazil could possibly withdraw in the near future.^[17]

All in all, Latin America’s landscape in the context of the regional spread of COVID-19 is one defined by growing economic, social, sanitary, and political challenges. It is to be expected that heightened short-sighted nationalist views, deep political polarization, and entrenched economic inequalities will harden across the region, impacting more sharply and painfully historically marginalized social segments, such as afro-descendants and indigenous communities. Reversing these disheartening trends will take continued and asserted mobilization of broad sectors of all regional democratic forces. And it is very unfortunate therefore, that in such a challenging context, Latin America’s burgeoning experiences with regional cooperation in the last decade have been severely reversed in the last few years.^[18]

Rafael R. Ioris is Associate Professor of Latin American History at the University of Denver.

Patricio Zamorano, Co-Director of COHA, contributed as Editor of this article

[Main photo-credit: Pixabay, open license]

End notes

^[1] “Covid cases in Brazil,” https://www.google.com/search?q=covid+cases+in+brazil&rlz=1C1GCEJ_enUS891US891&oq=covid+cas&aqs=chrome.0.69i59l3j0l2j69i57j0l2.1440j0j7&sourceid=chrome&ie=UTF-8.

^[2] “Covid cases in Mexico,” https://www.google.com/search?rlz=1C1GCEJ_enUS891US891&ei=vILiXr3ZEIrbtQar2puoBw&q=covid+cases+in+mexico&oq=covid+cases+in+mexico&gs_lcp=CgZwc3ktYWIQAzIFCAAQsQMyBQgAEIMBMgIIADICCAAyAggAMgIIADoECAAQR1CLmwVYvqMFYJemBWgAcAF4AIABaYgBvQOSAQM1LjGYAQCgAQGqAQdnd3Mtd2l6&sclient=psy-ab&ved=0ahUKEwi9p_W6vPrpAhWKbc0KHSvtBnUQ4dUDCAw&uact=5.

^[3] “Uruguay quietly beats coronavirus, distinguishing itself from its South American neighbors – yet again,” https://theconversation.com/uruguay-quietly-beats-coronavirus-distinguishing-itself-from-its-south-american-neighbors-yet-again-140037.

^[4] “Paraguay Closes Borders and Suspends Flights,” https://www.worldaware.com/covid-19-alert-paraguay-closes-borders-and-suspends-flights-through-april-12.

^[5] “Nicaragua battles COVID-19 and a Disinformation Campaign,” http://www.coha.org/nicaragua-battles-covid-19-and-a-disinformation-campaign/.

^[6] “While Brazil’s president fights social distancing, its public health system is fighting the pandemic,”  https://www.washingtonpost.com/politics/2020/05/04/while-brazils-president-fights-social-distancing-its-public-health-system-is-fighting-pandemic/.

^[7] “How Argentina’s Strict Covid-19 Lockdown Saved Lives.” https://www.wired.com/story/how-argentinas-strict-covid-19-lockdown-saved-lives/.

^[8] “Brazil’s President Still Insists the Coronavirus is Overblown. These Governors Are Fighting Back,” https://time.com/5816243/brazil-jair-bolsonaro-coronavirus-governors/.

^[9] “Brazil: Coronavirus Cases,” https://www.worldometers.info/coronavirus/country/brazil/.

^[10] “Mexico: Coronavirus Cases,” https://www.worldometers.info/coronavirus/country/mexico/.

^[11] “It’s time to tackle the informal economy problem in Latin America,” https://www.weforum.org/agenda/2018/03/it-s-time-to-tackle-informal-economy-problem-latin-america/.

^[12] “Covid-19 Exposes Latin America’s Inequality,” https://www.csis.org/analysis/covid-19-exposes-latin-americas-inequality.

^[13] “Latin America: political change in volatile and uncertain times,” https://www.idea.int/news-media/news/latin-america-political-change-volatile-and-uncertain-times.

^[14] “Latin America faces a second ‘lost decade’,” https://www.ft.com/content/07f0e09e-0795-11ea-9afa-d9e2401fa7ca.

^[15] “How the Leader of OAS Became a Right-Wing Hawk – And Paved the Way For Bolivia’s Coup,”  https://inthesetimes.com/article/22181/oas-bolivia-coup-venezuela-maduro-trump-luis-almagro.

^[16] “Brazil: From Global Leader to U.S. Follower,” https://fpif.org/brazil-from-global-leader-to-u-s-follower/.

^[17] “Brazil could quit WHO, warns Bolsonaro,” https://www.thehindu.com/news/international/brazil-could-quit-who-warns-bolsonaro/article31768510.ece

^[18] “Is Regional Cooperation Dead in Latin America?,” https://www.americasquarterly.org/article/is-regional-cooperation-dead-in-latin-america/.

Op-Ed

Juan Pablo Vacatello
From Washington, D.C.

A few seconds past 9:00 PM last October 27, the outgoing administration of Mauricio Macri announced the first official results of the presidential election. A first reading indicated that the numbers were clear and irrefutable. With 65% percent of the votes cast, the unity ticket formed by Alberto Fernández and Cristina Fernández won by a margin sufficient to avoid a second round of voting, with 47% for the Frente de Todos (Front for All), and 41% for Juntos por el Cambio (Together for Change). With the passage of time the margin only increased, to 48.1% versus 40.37%, with 97.13% of votes cast.^[1] Nevertheless, the votes were far from the 15 to 20 percentage points predicted by polls and the results of the open and obligatory primaries conducted last August 12th.

16 million Argentines are poor

We know that this outcome was no small matter. For four years the country has endured a model of exclusion, of the destruction of the nation’s productive capacity, a doubling of unemployment from 5.2% to figures exceeding two digits, 10.6% according to an official survey conducted in September of this year.^[2] The productive potential of the country is now 62%,^[3] compared to  almost  full capacity in 2015. Out of control annual inflation reached 54.5% in September.^[4]  The national currency has been devalued around 85%, from $9.50 pesos to around $60.00 pesos per US dollar.^[5] The external public debt has also irresponsibly grown. And above all, poverty has hugely increased  to between four and five million new poor just within the past four years. In 2015, the poverty rate was 29% which represents between 11 and 12 million poor.^[6] In 2019, the rate exceeded 35.4%, which translates into 16 million Argentines.^[7]

All of this is in economic terms. We are not even talking about the change of course in political terms or the impact on social rights. Under Macri Argentina resumed a strong close relationship with the United States (deja vu of the “carnal” relationship of the ‘90s)^[8] and turned its back on the Latin American processes underway during the first decade of the twenty first century. It also joined the rest of the continental right in delivering the coup de grâce to Unasur, shaping the Lima Group and advancing hegemonic power in the region.

The electoral victory is important, fundamental. It was a win over a government with plenipotential power, having under its control public institutions, the mass media, big landowners and banks, the owners of capital. To recuperate the keys of the State is the first step.

A decisive but not easy victory

At the same time, the election  results have a disquieting and concerning dimension. Something is amiss in terms of the classical process where impoverished middle classes under right-wing governments reveal themselves overwhelmly as clear majorities through broad popular mobilization. Given the magnitude of the economic and political disaster, one would have expected an easier victory.

This election raises many questions, and we ought to try to find answers before addressing the process of transforming society. How does one explain why the neoliberal and extreme right-wing candidates garnered 43% of the vote?^[9] How does one combat the deceptive discourse of the modern right in times of post-truth? What does one do about the judicial branch, historically controlled by the oligarchy, in times of “lawfare”?^[10]

A first approximation tells us that the prevailing powers and deceitful message of the modern right have stolen our “banners.”

Macri leaves the country financially broke

The new government faces a complex situation. The country is broke. The productive capacity destroyed. The prices of commodities deflated.  Interest on the debt acquired with the International Monetary Fund will be very difficult to pay back, and the country is on the brink of default with the private international lenders. Meanwhile, there is an urgent necessity to provide a response to the 16 million poor and indigent with inequality on the rise.

The Fernández team will have  to address the expectations of half of the country which supported a return to a model of inclusion and expansion of social rights and will demand immediate results. At the same time, the team ought to combat the discourse of the hegemonic power supported by the other half of the electorate.

A new model centered on the common good

Difficult times are coming. It is clear that if one wants to transform the prevailing model, one ought to bring about structural changes. It will not be enough to incentivize consumption and reactivate the economy given the already complicated objectives to be achieved at this juncture. Perhaps the first step would be the restructuring of the tax system to make it progressive, taxing high income businesses and individuals, enabling a reduction of the regressive tax on consumption.

It is equally necessary to rethink objectives as a society. The mercantilist neoliberal view of the human being as a consuming subject has taken deep root in Argentine culture. The great challenge of the new government will be to try to modify this model for one where human life in community is at the center of the scene and solidarity with the most needy is the fundamental value and objective. This would involve a real shift in cultural values. As the new vice president elect, Cristina Fernández, said some years ago, “the Homeland is the other.”

Juan Pablo Vacatello holds a degree in Business Administration from the University of Buenos Aires. He specializes in housing public policy and is a member of various boards of non-governmental organizations in the Washington, D.C. metropolitan area.

Translation by Frederick B. Mills

End notes

^[1] “Elecciones 2019: Los resultados de las elecciones en todo el país”. https://www.clarin.com/politica/resultados-elecciones-2019-quien-gano-argentina_0_fAmHiiJe.html

^[2] “La tasa de desocupación alcanzó el 10,6% en el segundo trimestre del año y afecta a más de 2,1 millones de personas”. https://www.infobae.com/economia/2019/09/19/la-tasa-de-desocupacion-alcanzo-el-106-en-el-segundo-trimestre-del-ano-y-afecta-a-mas-de-21-millones-de-personas/

^[3] “Subió a 62% el uso de la capacidad instalada de la industria argentina en mayo”. https://www.telam.com.ar/notas/201907/375705-subio-a-62-el-uso-de-la-capacidad-instalada-de-la-industria-argentina-en-mayo.html

^[4] “La inflación argentina repuntó hasta el 4% mensual en agosto”. https://elpais.com/internacional/2019/09/12/argentina/1568310356_760861.html

^[5] El Economista América – Argentina. https://www.eleconomistaamerica.com.ar/cruce/USDARS

^[6] “Para la UCA, hay 13 millones de personas en la pobreza”, 1 de abril de 2016. http://www.telam.com.ar/notas/201604/141656-uca-pobreza-indigencia.html

^[7] “La pobreza subió al 35,4% y ya alcanza a 15,9 millones de argentinos, según el Indec”. https://www.infobae.com/economia/2019/09/30/la-pobreza-subio-al-354-y-ya-alcanza-a-159-millones-de-argentinos-segun-el-indec/

^[8] The term was used by Argentine Foreign Minister Guido di Tella during the government of Carlos Saul Ménem to refer to relations between the governments of Argentina and the United States.

^[9] As of this article goes to press, with 97.20% of votes cast, the “Together for Change” ticket garners 40.4% of the vote, the “NOS” front (a conservative, anti-abortion platform) 1.7% of the vote, and the “Awaken” front (libertarian right) 1.5% of the vote, a total of 43.6% of voters.

^[10] A term used to explain the use of positions of power in the judicial branch as a form of warfare against governments within the parameters of institutional legality.