Tuesday, July 8, 2014

Policy makers’ lack of imagination can be costly

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08 Jul 2014 | Tony Leon | Original Publication:  BDlive

When confronted with the harsh realities of the world policy makers too often try to cling to old certainties, writes Tony Leon

ARGENTINA’s win over Belgium at the weekend has, for the first time in nearly 25 years, secured it a place in the Fifa World Cup’s semifinals. If Lionel Messi continues to be the gift that keeps on giving to his team and country, Argentina could just win the tournament.

If they can overcome the Netherlands, which ironically now has an Argentinian queen, they will face either archrival and neighbour Brazil, the tournament host, or Germany, of whom English football great Gary Lineker once said: "Football is a simple game: 22 men chase a ball for 90 minutes and Germany always wins."

Readers might recall the extraordinary onfield antics, replete with cartwheels on the sidelines of the pitch and kissing and hugging the players, of the maladroit Argentinian coach during the team’s calamitous World Cup campaign in 2010 in SA. Diego Maradona — quite correctly judged by Fifa, alongside Pele of Brazil, as the "footballer of the 20th century" — never managed to transfer his brilliance as a player to the more technical rigours of being a coach. He bears responsibility for his team being bundled out of the World Cup quarterfinals in Cape Town 4-1 by the methodical Germans. But he was equally responsible, as the key player in the 1986 tournament, for the country’s victory when Argentina last won the World Cup.

One of the more engaging conversations I had during my time in Argentina was with one of its foremost political analysts, Rosenda Fraga, who always found a witty metaphor to describe his country’s condition. He once explained the country to me rather memorably. "Argentina is a perplexing combination of two of its most famous sons, the literary giant Jorge Luis Borges, who walked with a limp, and the football legend, but decidedly nonintellectual Maradona. But all too often, it is the foot of the former and the head of the latter."

We know just how ephemeral a win in the World Cup proves to be. Spain won the cup four years ago in SA and ignominiously exited this year’s tournament in its early stages. As for hosting the global football fest, don’t even go there. SA managed a flawless world event in 2010, with genuine outpourings of fervent patriotism and national pride, despite the indifferent performance of our team, and even without a deputy minister suggesting the obligatory playing of our national anthem twice a day.

But within two years of managing such an event, we were catapulted into the global headlines when Marikana revealed our darker side. The pain has continued almost uninterrupted since then: from weak economic growth, declining investor confidence, continuing strike actions and two red cards from the credit rating agencies.

This year’s host, Brazil, did things the other way around. While the mostly violent service delivery protests here — more than 3,000 since January this year alone — in their intensity and frequency have been a more recent development, the streets of Rio de Janeiro and Sao Paulo were rocked by demonstrations before the World Cup as Brazilians seethed with anger at the cost of the tournament.

While SA’s relegation to a BBB-credit rating happened only last month, four years after hosting the World Cup, for Brazil, once acclaimed as an economic powerhouse, its downgrading to just one notch above junk status happened in March.

Argentina’s cresting of the World Cup wave has mirrored its slide downward on the economic front into far more dangerous territory than any occupied by either Brazil or SA. While its football fans were celebrating at the weekend, events in and around the courthouses of New York suggested that, for the second time in 13 years, Argentina is staring at the prospect of a sovereign debt default. The country has entered a 30-day grace period that expires at the end of the month, by which time it will either have to reach agreement with its holdout creditors or fork out an unaffordable $15bn to meet its obligations to its sovereign bond holders.

For the past 10 years or so, it has adamantly refused to negotiate with the so-called "vulture funds" that refused the "haircut" imposed on all bondholders by the government following its previous national default and economic crisis in 2001. Argentina’s attempts to defy the economic laws of gravity are coming to an end.

In the Financial Times, Philip Stephens recently borrowed an aphorism from someone in Moscow trying to explain President Vladimir Putin’s aggressive and self-defeating behaviour: "When you do not know what to do, you do what you know."

Too often, policy makers in Buenos Aires or Moscow, or even Pretoria, come to think of it, when confronted with the harsh realities of the world as it is, not as they wish it to be, try to cling to old certainties, even demonstrably failed ones. Such a failure of imagination can be very costly for a country, far more than winning or losing a football tournament.

Leon is the author of Opposite Mandela (Jonathan Ball) Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA


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