Infighting in Argentina

unions would have a right to strike for any reason they see fit. Limits would only apply if a strike affects essential public services. When expropriating land, the state will pay a “just price” for compensation, a weaker protection than the formulation in the current constitution, which says that owners will receive compensation for “the pecuniary damage actually caused”. Water rights, previously treated as part of someone’s private property, become a public good. They would be regulated under a new state body that would issue permits. Farmers, who consume 72% of Chile’s water, say this creates uncertainty over the value of their land.

The final document shows flashes of restraint. It enshrines the independence of the central bank and maintains most checks and balances. It circumscribes regional governments’ power to borrow and repeatedly mentions fiscal responsibility.

But constitutional scholars fret about the creation of a 17member judicial council, which would have a broad mandate. It would nominate all judges; previously the Supreme Court, the Senate, the president and the court of appeals all had a role. Every five years the council would review the work of judges at public hearings (though it would not be able to review sentences). Rodrigo Correa of Adolfo Ibáñez University worries that this could put judges under pressure from public opinion.

The draft also tackles many subjects not normally considered constitutional. One article gives citizens the right to “adequate, healthy, sufficient, nutritionally complete and culturally relevant food”. The text mandates that the healthcare system, courts and police all operate “with a gender perspective”, without elaborating.

If voters reject the new constitution, the old one would remain in force. It could be improved. A supermajority in Congress could revise or scrap some of its 21 “organic laws’‘ which make tweaking legislation difficult. For example, changing education policy in Chile is almost impossible. The country’s Constitutional Tribunal also needs to be reformed. It often protects vested interests: in 2018 it prohibited a law that would have given the consumerprotection bureau the right to sanction companies that colluded to fix prices.

Mr Boric will want the new constitution to be approved. His plans, such as creating a more elaborate national health service, would be easier to bring to fruition if it passes. But as the polls have turned against the charter in recent months, his people have stressed that they can implement their agenda even if it does not. Still, it would be a blow for Mr Boric, who championed the assembly, if its new constitution is stillborn. n

Expounding fathers

National constitutions currently in force

Word count*, ’000, at July 6th 2022

Latin America & the Caribbean Rest of world India ~145,000 80

Chile†

Ecuador Brazil 60

40

United States Mexico

Argentina Indonesia 20

0

1789 1850 1900 50 2000 22

*As originally adopted †Proposed Source: “Characteristics of national constitutions, version 3.0”, by Z. Elkins and T. Ginsburg, Comparative Constitutions Project, 2021; Centre for Law & Policy Research

Argentina Find works; insert spanner; repeat

B U E N O S A I R E S Martin Guzmán resigns because of political infighting

For several months Argentina’s president, Alberto Fernández, and his more leftwing vicepresident, Cristina Fernández de Kirchner (no relation), have publicly aired their differences. Since September Ms Fernández has published blog posts that denounce the president’s supposed austerity. When he reached an agreement with the imf in January to restructure a gigantic debt, she flew to Honduras in a huff. To mark remembrance day in March, which commemorates the victims of Argentina’s military dictatorship, her son, a congressman, organised a separate parade to rival the president’s powwow.

Now the saga has taken its most dramatic turn. On July 2nd Martin Guzmán, the economy minister, published a sevenpage resignation letter in which he suggested that the spats between his superiors had prevented him from doing his job. The resignation is a victory for Ms Fernández, who had been pushing for Mr Guzmán, the president’s closest ally, to go.

It comes less than a month after Matías Kulfas, the minister of industry and another ally of the president, was forced to resign after casting doubt on the role of Ms Fernández’s allies in the licensing of a gas pipeline (the case is being investigated; Ms Fernández described Mr Kulfas’ comments as “very unfair”). Both he and Mr Guzmán have been replaced by ministers closer to Ms Fernández.

Markets reacted badly to Mr Guzmán’s departure. The cost of a dollar on the black market, which more accurately reflects the value of the peso, shot up from 239 pesos to 260 (the official rate is artificially maintained at around 125). Some government bonds are trading as low as 20 cents on the dollar. The cost of insuring the country’s debt rose by 6%. Some businesses suspended sales, because the economic outlook seemed so uncertain. Meanwhile annual inflation is above 60%. The central bank has scant reserves of dollars.

Mr Guzmán was seen as one of the more sensible figures in the cabinet. He restructured $65bn of debt to international creditors in 2020 (equal to about a year’s government expenditure). He also cut the fiscal deficit after a spending boom during the pandemic and led talks to renegotiate the $44bn Argentina owes to the imf. None of this improved investors’ confidence in the country, which is a serial defaulter, though it did buy the government time. Yet it sparked the ire of Ms Fernández, who recently said that inflation is not caused by fiscal deficits but rather by debt. She also suggested the president should “use his pen” to halt imports. She believes that is the best way to remedy the dollar shortage.

Silvina Batakis, the new economy minister, is a former civil servant. She was the economy minister of Argentina’s most populous province from 2011 to 2015, where she defended the use of price controls and higher wealth taxes. But more recently she said she believed in a balanced budget, agreed to stick with the deal with the imf (though she said “adjustments” were needed), conceded that price controls alone do not lower inflation and said that energy subsidies must “rapidly” be reduced—a particular affront to the more extreme elements in the government. Implementing these measures could stem another crisis. That is, if Ms Fernández allows it. n