JOSÉ LUIS MACHINEA: A JOURNEY AROUND THE WORLD WITH A TOP GUIDE

Labeling Jose Luis Machinea just as an economist is sort of a misnomer or, at the very least, such definition fails to capture this multifaceted man as this interview will prove. He is indeed an economist with unbelievable achievements under his belt, but also an intellectual whose encyclopedic knowledge permeates any conversation. His career has been marked by top positions in Argentina (1 of the two economists having filled the most influential economic positions) and abroad. Nevertheless, he comes across as a humble man who seems to socratically lose himself in the pursuit of the truth along with his interlocutor. He took over as Minister of Economy amid huge turbulence, but he must have remembered it was not the first time, but from a different angle. 

This interview is in fact a journey around the globe on which Jose Luis Machinea gives a masterful lecture on politics, leadership, history, technology, power, and strategy, and - certainly - also economy.

Audio with the whole interview included above.

Jose Luis Machinea

Economist - Universidad Católica Argentina

Master´s in Economics - University of Minnesota

PhD in Economics - University of Minnesota

Undersecretary of Planning (1983-1985)

Undersecretary of Economy (1985-1986)

Argentina’s Central Bank Governor (1986-1989)

Argentina’s Minister of Economy (1999-2001)

Machinea, you have always handled yourself easily on the economic front and somewhat easily on the political one. You have known both universes for many years. And you are the right person to explain today’s world landscape. At present, the world is facing economic and political challenges. We have Brexit with a very weakened Therese May, both internally and externally. In the United Kingdom, her own people are giving her the thumbs down and Brexit, to Europe means no turning back. There is also a trade war between China and the United States which is triggering a worldwide dynamic affecting several countries, even a US company like Apple has stated that is being hit by this war. On the other hand, there does not seem to be economic prosperity anywhere in the world. Even in the US, the government´s “positive” figures are quite controversial according to experts and an economic crisis is believed to be brewing. How do you see all these facts? 

“At hard times people begin fault-finding. In our case we lay the blame on imperialism, and in Europe on the European Union. ”

With great concern. The world is going through a very complex phase, both economically and politically. We have new world leaders in positions unimaginable not long ago. We knew left-wing populist governments in Latin America, but now the world shows us right-wing populist ones which lead to events like Brexit. The “Let’s leave the European Union and we’ll have a better life” motto is ensued by the realization that the outcome does not quite match it, but now there is no going back. And we see other situations like Trump in the United States and similar cases in some other European countries like Italy. That’s why it’s worrisome from political and economic standpoints. A world economy that has grown in the past two years to a degree that exceeds the countries’ own capabilities to withstand such growth. Trump’s tax reduction is a case in point. He reduced taxes in an economy that was growing, but now we are anxious to see how this story ends. The US shows a higher debt burden, with a higher deficit, and seems to be heading for an economic slowdown in 2019 and 2020. Germany, which has been the driving force of Europe’s growth for a long time, suddenly shows some signs of burnout. There are, no doubt, several kinds of problems in Italy. France also shows leadership problems that are impacting the economy. This is a much uncertain world, with more complex situations as well because we don’t know what the new leaders - at least some of them - will do or decide tomorrow, which also generates volatility in the financial markets. You take a glance at the headlines and read that one day the US Stock Exchange rose 2%, the following day 2%, but 3 days later it fell 3% or 4%. A volatility not observed in the developed world for a long time. To these facts, we should add that household debt, companies’ debt, and governments’ debt are the highest ever. How to get out of all this? Well, there is not much room for a much more expansive fiscal policy because we have a debt level that is worrying, not so much in the short term as interest rates are still very low. But we cannot think these low interest rates will linger on and therefore this level of debt at higher interest rates is clearly more worrying. 

“The idea of a leader as savior is opposed to the idea of institutions. ”

In the United States, there was a striking case, the conflict between Donald Trump and Jerome Powell, the Governor of the Federal Reserve - unprecedented in the US. In your experience as Argentina’s former Central Bank Governor, can you explain in which context this took place and why this is different from anything before? 

Well, Trump’s intervention was not a happy one, to put it some way, I mean, exerting pressure on the Fed. But, at the same time, there was a reason behind it. Raising interest rates was unnecessary. The problem was he made his differences with the Fed public and thus exerted pressure on the Fed, which gave rise to further uncertainty in the markets. Economists like Paul Krugman and Larry Summers had also stated that it was not the right time to keep raising the Fed’s reference rate. Of course the Fed saw the economy kept growing, but what perhaps it did not see was the signs that such growth tended to end or wane. Anyway, what Trump did was awful because he caused high uncertainty in the short term, in turn, Powell, who had to change plans because he realized the economy is not that good, looked pressured by Trump, but I believe he was not. He was in fact pressured because the context of the US economy has changed and is giving clear signs that what we have to expect is a slowdown in the growth rate. 

“When we speak of leaders, we speak of people with medium-, long-term vision, usually not found in other politicians. Leadership implies decision-making skills in complex situations”

What we can see now is an absence of leaders. Therese May shows no leadership. Angela Merkel seems to be the only very strong political figure, she is respected, but said in two years she is stepping down. Emmanuel Macron is charismatic, but has no power. The only one who seems to have struck some balance is Justin Trudeau. And what is Donald Trump, the most baffling President so far, but in charge of, no doubt, the strongest world power?

“The knowledge economy is OK, it should be supported, but how many people does it employ? 10% of labor? It should be along with an industrial sector to strike a political and economic balance ”

I quite agree with you. We knew many leaders in Europe. From the very creation of the integration project of Europe with Gaspari in Italy, Adenauer in Germany, Schuman in France, who were in fact leaders, and put a project of the magnitude of Europe’s integration in motion. In the past few years, we have not seen the emergence of new leaders like those in the 1950s, the 1960s, or even the 1970s, and the world now is in need of such leaders. I think that leadership is always important, but - no doubt - when major decisions have to be made, for example about what to do now with the EU, leadership is even more important and therefore those leaders are further missed. When we speak of leaders, we speak of people with medium- and long-term vision, usually not found in other politicians. And we don’t see that very often. Merkel may be an exception, definitely. She has had long-term vision. You may or may not agree with her, and over time she became a leader that we are going to miss. So, definitely, leaders are important and leadership implies decision-making skills in complex situations. 

Now, the idea of a leader as a savior, a leader who will come and save us, is at times opposed to the idea of institutions. We have to create institutions. It is true that when we build institutions, the leader is somehow forced to take a back seat or he is imposed limits, for example Trump’s case in the US. Trump wants to make decisions, but he can make fewer than he wishes, luckily in most cases, because there are institutions, there are checks and balances, with Congress or the Judicial Branch, that stop Trump from getting ahead with some decisions. So, the creation of institutions, which has mostly been lacking in Latin America, but usually present in the developed world, is as important as or more important than the need for leaders, that is, those people taking complex decisions at difficult times. 

A statesman is essential.

Of course. What we saw in Europe after two world wars was the result of leaders who had a long-term vision of Europe and committed themselves to that long-term vision because oftentimes we see that the people ruling a country or in important positions take too many short-term decisions. And having that long-term vision, which implies a bare minimum of consensus within a society, is missed even more today and in Latin America we have not had it for a long time. 

On the economic front, the European Union is supported by some and trashed by others arguing that in fact it straitjackets European countries. However, some countries like Spain have shown prosperity thanks to it, others like Greece have not. What’s your view? 

I think that the European Union has been very important for many European countries, and particularly those countries with lower income per capita like Spain, Portugal, and even Greece, over and above its history in the past ten years and its leaders’ economic mismanagement. Or Italy, which was powerful but not that much, and until 10 years ago it was in a situation close to Germany’s or France’s. So, I think progress has been notable and, among other things, it fostered communication. But it was a scenario where a political rather economic integration was attempted, without having done first the homework at an economic level. It is very difficult to have a political integration when there is no one capable of making economic decisions at the level of the European Union. Decisions are still made at country level and at hard times many people begin finding fault, in our case we lay the blame on imperialism, and in Europe on the European Union. That is what happened with Brexit, that is what is happening now in Italy. I think there are things to correct in the European Union. Perhaps we should not be so optimistic as to think there will be a political integration, at least not in the short term, but I think that it has been and should continue to be a good institution for the world and Europe. Some problems or inefficiencies resulting from the lack of decisions at the level of the European Union should be corrected, those having to do with sovereignty. Who hands over power to the European Union? No government is willing to do it. They do it to a certain degree. When the European Union wants to manage monetary policy, which is done by the Central Bank, or the fiscal demand on resources, etc, the others say “enough”. That has to be taken into account. But in this context we cannot be so enthusiastic as to attempt to do something we know is not going to work because countries are not willing to hand over sovereignty. So, the European Union is good and has to continue but it has to be less ambitious in terms of the objectives it had some 10 or 15 years ago and admit that political integration seems difficult. 

How is Brexit going to affect the United Kingdom and Europe as a whole? 

It affects both, but largely the United Kingdom. If my memory serves me well, the European Union’s exports to the  United Kingdom must be 5% of its total exports, but the UK’s exports to the European Union account for 50% of the UK’s total exports. That is to say, it means little to the European Union, but much to the UK. Therefore the UK will be harder hit. But not only in that respect. Take a look at what is going on with the banks. Or will trade agreements between the UK and the European Union have to be negotiated? In that sense the situation will become more complex in terms of transportation and other aspects. They used to operate from the UK knowing that what they did in the UK was valid in the EU, well, not anymore. Therefore there are several banks and insurers that are moving to the Europe’s mainland. In my view, it was a very bad deal for the UK, and it is now very difficult politically to solve it not only in the UK but also in the rest of Europe because the European Union is not willing to make any compromises. That is, if you leave, you leave, but not only from areas not convenient to you. It does not work like that. And I think the European Union is doing the right thing otherwise there would be a contagion effect, that is, something like .... the part you don’t like you don’t do it, but you remain inside. 

Part of the society in particular will be very affected, particularly the youth with a certain level of education because there used to be many university agreements, and that was all shattered. However, another ghost comes into play, which seems to affect mostly Europe, “immigration”. Is this situation magnified in economic terms or is this real?

It is real. But it is particularly real when economies don’t grow, and the blame game starts. Accusations that 10 years ago, when countries were not in crisis mode, such as  “the problem is that we are part of the European Union”, “The problem is that immigrants flow in” did not exist, now emerge. Crises lead to reactions of this type and therefore to populist politicians with a better reach.

And something more serious like the emergence of far-right movements ...

Exactly, even to that point. Immigrants have, in the world as a whole, and clearly in the European Union and in the US, played a key role in the growth of economies. For a long time, they did the jobs that nationals did not want to do. Many of them have studied and are now professionals unlike their parents and grandparents. So I don’t think immigration is the problem, but the lack of growth of the economies and the search for easy explanations to complex problems. 

Now, zooming in on Latin America, we can say that this region seems a difficult one. But, even so, throughout the 2000s many countries prospered, but not Argentina. Argentina seems doomed to go through recurring economic crises, and what is even worse, Argentinians expect them, crises have become the norm. What is the reason in exact terms? 

Well, if you take a look at Argentina over time, from 1930 to date, Argentina’s per capita income convergence with that of the rest of Latin America is a clear example of this. In 1930, Argentina’s per capita income was, if my memory serves me well, three times as much as that of the rest of Latin America. Today is not the same, but not much more than the 50% of that of Latin America. Why was Argentina’s path like that for such a long time under different policies, of any kind, even with military regimes - which luckily we do not have any more? Why? If we Argentinians had the answer, we would surely be better off. But, no doubt, conflicts resulting from income distribution, for example, have been prevailing in Argentina. We Argentinians believe we are rich. We have always thought it. And therefore when in our economic situation something goes wrong, someone is to blame. Sometimes this is right, but not always. But believing that someone is to blame all the time and not that the economy is not growing .... reducing it to the idea that someone took away my share, leads to permanent conflicts. And how have conflicts been solved? Many times through inflation, which we end up unable to stop. You want to satisfy everyone and at the end of the day you have a higher deficit and a more complex inflationary situation or debt, you get into debt, but debt has a limit. I think that has been a pervert dynamic for Argentina, and we have the eery feeling that it tends to get worse. When you listen to political discussions in Argentina, you get surprised at some ideas such as defaulting on debt. After a long time, instead of learning, we show less ability to agree on rational things with outlandish proposals in the way. The sort of debates present in Argentina don’t take place in other Latin countries, such as Chile, Colombia, or Peru. Brazil is a particular case. Of course there are debates, like anywhere, but debates on punctual things with exact figures. Here everyone can present unfounded arguments, which is a shame because Argentina needs consensus based on the magnitude of the problem we have. We have to realize we are no longer rich - if that was ever the case - and that there is no money to distribute freely. Of course, not any solution goes. No doubt, there is an income distribution problem in Argentina, there is a poverty problem, and we have to face it, but in turn if we prove unable to reach long-lasting policies, with constant ever-changing plans, it is difficult to think we will ever be able to grow again.  Unfortunately, we have not been able to generate a consensus and, above all, to lay the groundwork for a more rational discussion on Argentina’s ills. 

The two factors the man on the street, with no grip on economic and political issues, suffers are inflation and devaluation. How is it possible to go through such reality in which major assets are explicitly in dollars like properties or hidden ones as in foodstuff and medicine?. Sometime last year, I watched an interview with the president of a private medical insurer in which he said that the recent devaluation had had a great impact on them because 60% of their inputs are imported. Also, the president of a car company said most components in a car are imported. 

Well, in addition to the imported inputs in the case of car companies, this is a bi-monetary economy and we have to understand it as such. As you correctly say, people still think of properties in dollar terms. Even at times of low inflation in Argentina, people kept thinking in dollar terms for certain transactions. A by-monetary economy that has  given rise to dollarization proposals or a system very close to dollarization such as convertibility. And we have had it. I believe that this is a factor that hinders anti-inflation policies, or growth plans. But the question that emerges is: Is dollarization the solution? I don’t think so. I will present pros and cons. The pro is that if we could live more reasonably in a dolarized economy, OK, we could say let’s have dollars and that’s it. But what happens when Argentina’s economy has external shocks?` and external shocks in Argentina are quite different from those in the US, for example. If our shocks were similar to those in the US, when we had a negative external shock and so did the US, if the US faced that situation with an expansive monetary or fiscal policy to make up for part of the shock, it would be great for Argentina, but the shocks in the US bear no resemblance with those in Argentina. When grains prices collapse in Argentina, the US hears a whisper and therefore we end up with no instrument like an expansive fiscal policy, no monetary policy available and therefore the impact of a negative shock is very difficult to compensate. 

The extreme case was the 1930s with the gold standard. When commodities prices began to plunge, the world economy was driven into a deep recession, the gold standard did away with any sort of maneuvering room and countries wanted to take some measures to get out of that situation. It was the case of the US. Roosevelt stated that he wanted to find some mechanism to increase the price of the products sold by the agricultural sector in the US and the only way to do it was leaving the gold standard otherwise he couldn’t devalue. That is to say, you are left with no instruments, no exchange rate, no monetary policy, no fiscal policy, it’s very strict. We can say “well, these are the costs”. The benefit is that when the international situation is doing fine, we are better off than having an economy based on a local currency, it is true, but this does not allow having policies to face complicated situations and that is what Argentina faced with the convertibility. 

Nevertheless, Domingo Cavallo continues to think that the best plan for Argentina is a currency basket, why do you think that this is so when convertibility brought along many difficulties?

“We Argentinians think we are rich. We have always thought so and when in our economic situation something goes wrong, someone is to blame”

Well, he keeps thinking that the costs of maintaining a local currency are higher than the benefits of having it. But, again, what I said before, what can we do in the face of an external shock? Of course there are costs and benefits. I believe that the costs of adopting a convertibility-like system either pegged to the dollar or to a currency basket, which is pretty much the same, has higher costs than benefits. Argentina’s case somehow proved this. We may well mention other cases in Latin America. Either  way may give rise to problems. I particularly prefer a currency basket because otherwise we are tied to just one currency. It’s preferable to have a basket because you will always have a currency that reflects what is happening in different parts of the world and not only in the States. But this does not lessen the problem we were speaking about before; I will still be unable to resort to monetary and fiscal policies, to an exchange rate. Take Ecuador for instance. It did well.... until 4 or 5 years ago. Above all when oil prices were high and world economies were growing, it was a party. The same happened in Argentina with the convertibility. While the world was doing fine, it was great. But what has happened in Ecuador in the past 4 years? It hasn’t grown. Its 2018 PCI is lower than its 2015 PCI. 

“Crises lead to anti-immigration reactions and therefore to populist politicians with a better voter appeal”

And it has no monetary policies to resort to... 

No, it cannot. Neither can it use fiscal policies because it used up all the bonanza money. Anyway, in Ecuador they were smarter than us because they channeled a lot of money into public works. The expenditure on infrastructure went from 5% to 15%/16% of GDP so, at least, they were left with a very reasonable level of infrastructure. Argentina, instead, spent it on consumption or on transfers with no effect on infrastructure and therefore Argentina now lacks the ability to have a more competitive economy. They were indeed smarter, but anyhow, when the shock came they had no economic policy instruments. 

I also watched an interview with an Argentine businessman that stated that Argentina insists on having industries when in Argentina they have never been successful and we should focus on selling knowledge as we still have very good human resources. What’s your opinion?

“With institutions a leader is forced to take the back seat or he is imposed limits ”

It’s OK. When you take a look at the world, you see that trade has slowed down its growth in the past few years. Trade grew a lot - almost 50% above GDP - from 1950 to around 2000 and therefore it was a growth engine for several countries, definitely all Asian countries and today it is not so. However, when you analyze the situation closely, you see that services still grow above the trade of goods, and when I speak of services, I speak of sophisticated services, I am not necessarily speaking of tourism, which may be sophisticated, or transportation, I mean the new services involving advisory on medicine, engineering, or software to mention just a few. Argentina is doing very well in this field. I think it’s great and it should be supported so that it continues to be relevant in our country. No doubt. The question is: Is it enough? So, you take a look at the world and ask yourself: “What is happening in the world?” For example, India. India did that. It reached a very sophisticated level at certain activities and today it is exporting services to the whole world, even more than - at least until 2 years ago - China, which follows it in services in the developing world. India is in charge of the accounting of the World Bank, the accounting of the Fund, Medical diagnoses - you take an X-ray and the following day you have the diagnosis anywhere, each time more and more sophisticated things, but you take a look at what is happening in India and you ask yourself: “Ok, but how many people does this kind of services employ?” 10% of labor? It’s not enough. Of course, this is great, because they are doing state-of-the-art things....

But it has to be complementary ...

“Whenever we speak of Mercosur, I have mixed feelings. We should move seriously to a free trade zone of goods and services ”

Sure. It has to be developed along with something else. China, for example, does have that, a service industry along with an industrial sector, an industry that is growingly sophisticated. So, here in Argentina, what would you do with the people in Greater Buenos Aires, where there are workshops and industries with varying degrees of sophistication? If you think the knowledge industry will replace all this, you are wrong, it will not. I agree with the fact that Argentina has the chance to export knowledge and above all train skilled labor, add value to the goods it exports. So, we have to do it, but today it is not enough. Even the agriculture sector is not enough. We have to have an industry even when I agree that it is not what it used to be. In the past, the only chance to grow lay in the industrial sector - in the 1950s, 1960s, 1970s - and not only in Latin America, but in Asia as well. The World Bank used to say that the industry was the way to grow. And I think that this is still somewhat true, but not that much because today technological development, which is the relevant field today, is spreading everywhere, it is present in every sector. The agricultural sector has an impressive level of technology, in the services we have mentioned before, which are very sophisticated, and also in the industrial sector there is a high level of technology. So, it’s not only industry what we need, we have to technify the Argentine economy and that implies that services have to be more important. The agricultural sector has to further deepen its technological change and our industry will be partly state-of-the-art and partly a source of employment necessary to strike a social and political balance.  

What chances does Mercosur stand? It has never fully materialized, and now there is a new player, Bolsonaro, who threatens to opt out of it. 

Whenever we speak about Mercosur, I have mixed feelings. I have always supported Mercosur. I think it was a great idea put in motion by Alfonsin in the late 1980s, and then continued by Menem. But, clearly, Mercosur has not made any progress in the last 20 years. In fact it has moved backwards at times. We were going to be a great Common Market, only one currency, and today we still have barriers to trade goods, not to mention services. We came to a halt halfway, in the worst of all worlds because we remained with the Mercosur straitjacket and no benefits. Just as in the EU, we don’t have to expect so much from Mercosur and we should move seriously towards a free trade zone of goods and services, which would be great, and only then could we discuss having common tariffs on overseas trade. Putting the spotlight on goods and services trade and not so much on the idea of a common market gives countries further leeway to reach agreements with the rest of the world, and in this sense it has always been an obstacle for Uruguay and Paraguay as they have always pursued this kind of agreements, but have been held hostage in Mercosur. Our integration with Brazil would be great, but we have to admit that in over 20 years we have not been able to make any progress therefore we should have less expectation and work seriously on concrete things. To Argentina in particular, Mercosur should be a privileged market because it is where we export more added value, among other things, more industrial goods. We just have to change its format, there should be total free trade of goods and services. 

Sometime last year, on TV, Paul Krugman was asked what his opinion was of Donal Trump’s economic team and he laughed. What do you think of Macri’s economic team? 

(Machinea smiles) It’s a very reasonable economic team. The problem was when the President stated that this is Argentina’s best economic team of the past 50 or 60 years. It is not so. Of course I do not think this economic team is laughable as Krugman inferred of Trump´s, probably very rightly. I think these people are very capable. The design of the economic policies was wrong. The idea of splitting power so that a minister of economy would never have much clearly ended up being a disaster in coordination terms. Partly this has been corrected. Policies have also somehow been corrected. I may disagree with some things they present, but it is far from being a laughable team at all, but the President´s statement that it is the best team in Argentina´s history was a mistake; I think it is a dignified team facing very complex circumstances. 

How do you see today’s Argentina, in 2019? It seems to be a puzzle. People seem to be pessimistic because the outlook is not good, which is quite paradoxical because we are in an election year. On the one hand, it is good that the government does not make use of populist measures, typical in an election year, but on the other hand all this situation arouses anxiety. 

Argentina is facing a very complex situation because the drop in the economic activity  has been unbelievable, in the industrial sector, in the construction sector... also in the agricultural sector because to top it off it was affected by the drought. But, relative to 3 or 4 months ago, we have made notable progress. Four months ago we all thought this could wind up in a super crisis. Under no circumstances do I see such a chance now. The situation has shifted back to normal. There is definitely less uncertainty. Is this enough? Surely not. So I have two comments in this regard: First how do I think the economy will continue given this economic policy and Argentina’s circumstances? I think the Central Bank will keep reducing rates, which is very good news. Maybe it would be OK to have rates at half percentage points, but that will not happen and at least we should have way more reasonable rates, more in accordance with the inflation rate, which is not what occurred in the previous months. In growth terms, in 2019’s first quarter we’ll see - not vis a vis 2018’s first quarter, which was very good - but if we make a seasonal adjustment, as we economists usually do, 2019’s first quarter will not be as bad as 2018’s fourth quarter. And 2019’s second quarter will be better because we will not have a drought and luckily we’ll have very reasonable grain production. All this, exports, and increased purchasing power after a sharp drop last year should help the economy - if not to grow extraordinarily - at least to push it out of this situation and I suppose all this will take place from 2019’s second quarter on. And it’s also worth pointing out that just as pensions plunged last year, this year they will grow because they are adjusted to past inflation, and wages - which dropped I believe around 12% - will increase, very likely not to 2017’s levels, but anyhow there will be an improvement, just in relative terms, which should lead to increased consumption and exports as a whole, which are sort of OK because Argentina has a fairly competitive exchange rate today. We won’t be able to achieve much more. I insist, interest rates should go down faster, but I guess the Central Bank  is cautious, which is very reasonable because the worst thing that might happen, not only to the campaign but to Argentina itself is another dollar run, but now, luckily, they are speeding the reduction up. 

Without playing clairvoyant, who do you think will win the presidential election in 2019?

I don’t know, but I do believe the government has helped polarize this election and from a polarization standpoint, between Mauricio Macri and Cristina Fernandez, the government stands a better chance. But this polarization both for the political system and Argentina is a disaster. A permanent polarization with no options, all the time black and white is negative for the political system and the country. If a third option comes along - this idea of the Peronismo Federal -, it will depend on the candidate they choose, Sergio Massa, Roberto Lavagna, Juan Manuel Urtubey. But, for the moment, the feeling we get is that this 3rd potential candidate will not be the one facing the run-off, but you never know. There is a void, there are people angry with Macri, but who won’t vote for Cristina either, so there is some space for some reasonable candidate to gather a sizable number of votes. But it all depends on, among other things, whether Peronism is capable of finding this candidate and agreeing on him. 

Particularly in a country where the political construct is frantic, in just a few months you can create a political candidate. 

Sure

I don’t know whether in the rest of the world this is the same, but here there is this phenomenon. 

Well, Bolsonaro until 3 months before the election did not stand much of a  chance, and his popularity improved extraordinarily after the well-know attempt against his life. There are several cases in Latin America in which a candidate comes along against a background of citizens dissatisfied with the political system, with the candidates, in Argentina’s case with the previous and the present one and would like to have another option. So a new candidate might emerge and do well. But today we have a very polarized political system and within this context Macri stands better chances of winning than a few months ago.  

Machinea, thank you very much. 

Jorge Reparaz
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