Argentina threatens consultants who flout party line

by Vault Consulting Editors | February 04, 2011

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The government of Argentina issued a directive this week to consultants under its jurisdiction: fall in line, or face the consequences. Government officials are apparently unhappy with analysts at consulting firms that have published data suggesting that inflation is actually above 10.9 percent, the figure set forth by the Argentinean government. The directive arrived in the mail today in the form of a questionnaire, which demands that firms provide detailed explanations of their findings within 48 hours. Those who fail to respond in time face fines of up to $125,000.

The Financial Times reports that the government's estimate of 10.9 percent is largely baseless and in stark contrast to independent estimates, which put inflation at 25 percent in 2010 and as high as 30 percent this year. Argentina has historically struggled to keep inflation under control, the publication asserts, and recent history has been no different; food prices, for example skyrocketed 40 percent last year, leaving employers scrambling to adjust pay in line with supposedly-accurate figures. "Official price data have become so out of step with reality that union leaders, even in the public sector, disregard them when negotiating pay rises," the Times reports.

Argentinean consultants described the government initiative as "an attempt to shoot the messenger." "It would be worrying if this were an attempt to limit the availability of public information," said Rodrigo Alvarez, economic consultant at Ecolatina. "It looks like they're trying to discredit these private indices now that salary negotiations are getting under way," added Nicolas Bridger of Prefinex, a small consultancy.

The looming presidential election in October seems to be playing a part in the government crackdown. Incumbent Cristina Fernandez has not yet indicated whether or not she plans to seek re-election.

For more information:
Financial Times

Filed Under: Consulting

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