Benjamin Gedan is a foreign policy expert who held several posts in the Obama administration – the last one being the National Security Council’s Director for Venezuela and the Southern Cone – and is currently a professor at John Hopkins University and the Director of the Wilson Center’s Argentina Project.
The Bubble sat down with Gedan during one of his visits to Argentina, to both learn about the institution’s criteria when it dissects the country’s politics and selects the events and facts that are relevant to their work, as well as to get his take on the current state of affairs in the country – particularly, the bilateral relationship with the United States.
Gedan lauded the work the Macri administration has been doing in its attempt to implement its reform agenda, highlighting that, in his opinion, the structural problems it inherited from the former government are almost “insurmountable.”
He also indicated that the current international context presents several challenges that would have perhaps been easier to overcome years ago; but said that at the same time, some of them can be taken as an opportunity for Argentina to become a global actor – both in the political and the economic landscape.
“When looking for partners – the US and others – Argentina has become the natural place, both for investors and foreign governments,” he said about this.
Let’s delve into each one of these subjects.
Analysis of the Macri Administration’s Work So Far
When consulted about the success the government has had in pushing its reform agenda, Gedan said it is doing a good job, clarifying that all analyses should take into account that it has taken on “an impossible task.”
“I know it is unpopular to blame the last government for what’s going on, and this government has moved on after two years. Polling suggests that only a third of Argentines now hold the last administration accountable for economic problems. But reality is that you can’t overlook the budget deficit that was inherited, the loss of foreign exchange, the inflation problems that Argentina had with the recession from 2016,” he said.
Gedan went on to say that the government was able to obtain some quick victories as soon as it took office – “getting rid of some of the export taxes, floating the peso; removing some of the import restrictions” – but indicated that “what they are doing now, are the hardest things for anyone to do.”
“They are continuing with the subsidy reductions. Labor reforms are impossible almost anywhere, particularly in an economy that is recovering very slowly. Does that mean they shouldn’t be pushing it? No. Does it mean they are going to succeed with the Gradualismo approach they are taking? Maybe not. But I’m very sympathetic with the government because I think it’s on the right track and I think it faces this impossible political economy in a country where you can’t even say ‘ajuste.’ And you can’t not acknowledge that austerity is part of what’s needed to right the fiscal ship,” he argued.
During a talk at Di Tella University last Thursday, IMF Director Christine Lagarde provided a similar analysis, praising the government for “attacking the issues in a very determined way” – noting that the policies are not “gradual” in terms of depth of measures that are decided, but “rather substantive and sustainable” over time, which is what in her opinion characterizes gradualismo.
Challenges and Opportunities in the International Context Macri Inherited
Gedan said that in his opinion, Macri – that’s to say, his presidency – was “born at the wrong time,” considering that his administration proposes a free trade approach at a time where the international community and the United States are much more closed and protectionist.”
He then proceeded to name other factors that create an adverse international scenario for his agenda: “He comes in and faces this enormous crisis in Brazil – your key trading partner. So I think the international context has been difficult. It is obviously not the commodity super-cycle that the previous government enjoyed. I think this has made things very difficult for Macri,” Gedan analyzed.
However, there is a silver lining: the opportunity to rise as a regional leader, and a global actor: “There is a lot of inward focus on places like Brazil and Chile [as the former is heading toward an election and the latter just had one]. Mexico and Colombia are looking inwards too. So, when looking for partners – the US and others – Argentina has become the natural place, both for investors and foreign governments. So I think in that sense, he has had an advantage. The fact that they are hosting the G20, that they hosted the WTO’s ministerial event last December, it all means that they have really been taking advantage of that opportunity,” Gedan said.
The Bilateral Relationship with the Trump Administration
The Argentine media has placed strong emphasis on the alleged friendship between Macri and Donald Trump, speculating with the possibility that it will report tangible benefits to Argentina in its bilateral relationship with the United States. However, this has not happene, and the countervailing duties on Argentine biodiesel exports – some as high as 72 percent – that came following November 2017’s findings that producers were receiving “unfair” subsidies can attest to it.
Regarding this, Gedan said that he believes that this administration, same as the last one, does value Argentina. “They see it as an important partner on issues such as Venezuela, but also generally on regional leadership. They obviously see Argentina as an important market for the United States and hope that Argentina succeeds.”
However, he argues there is a slight issue: “They are just not willing to do anything to help Argentina. It is a strange dynamic where I think they are in love with the reform program here, but unwilling to lift a finger, at least on commercial matters, to help.”(Editor’s note: Gedan was interviewed days before the Trump administration opted to at least temporarily exempt Argentina from US steel and aluminum tariffs).
Nonetheless, Gedan said he doesn’t think Argentina is being singled out in any of these issues (“not even in Biodiesel”), but that these decisions come as a result of the protectionist policies that Washington is currently implementing. The fact that Indonesia was imposed the same duties as Argentina further illustrates this point.
“What happens is that the voices in Washington that care about protecting US companies have become predominant in a way they were not in other periods, where the State Department was able to say ‘This is a government in Argentina that we need to be supporting, even at some minor commercial cost to the US in the short term.’ That argument is just not palatable in the US anymore,” he explained.
The role Argentina has in the handling of the Venezuelan crisis, and whether the measures taken are enough.
Gedan is an authoritative voice to discuss this issue: as mentioned before, he was the director of the National Security Council’s Venezuela desk, as well as overseeing the Southern Cone, during his tenure. Regarding this, he said that even though Argentina has been “an extraordinary leader, both at the OAS as part of the Lima Group, and in being one of the first countries to talk about an oil embargo as a policy recommendation,” both the country and the entire region should be doing more.
“There is this strong culture of non-intervention, that when anyone even modestly criticizes Venezuela they are like ‘wow, look what I’ve done.’ The region needs to consider other tools, including sanctions, which is never part of the conversation here. But I think they could be because the scale of the tragedy; the risks of a refugee crisis are so high, and the example of the dismantling a democratic system is so pernicious for the region, that I think Argentina and the others have to do much more,” Gedan said.
The Argentina Project and its Criteria at the time of Selecting What is Relevant for Its Purposes
The Macri administration’s agenda has put Argentina back on the radar of the United States. The creation of the eponymous project illustrates this interest and that’s why the criteria the institution uses at the time of choosing what issues to focus on – whether it is on social media, reports, or the weekly asado – provides a useful window to observe what information American multinational companies, and the journalistic and diplomatic communities are interested in.
“We focus less on polls, less on campaigns. For example, take the march called by Hugo Moyano. You may focus a bit on the personalities involved and what he said about Macri’s father. We are much more interested in what it means for the reform movement. How is Macri going to advance labor reforms, why are they important in Argentina, and what does it mean for competitiveness,” Gedan said.
The Macri administration has the world’s attention. It will be up to them to take advantage of it and use the spotlight in its favor.