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Argentina, Article: The Chance for Argentina
By
Carl Moses
, Frankfurter Allgemeine Zeitung, November 16,
2015,Frankfurt am Main, Germany.
The election of the liberal-conservative Mauricio Macri as new president can already now be
termed as a historic event in many regards. - perhaps even for entire Latin America. For the
first time a democratically elected president will govern in Argentina who is not coming from
one of the two large traditional parties - the peronist party PJ, or the social democratic UCR.
The party, only ten years ago established by Macri as an answer to the repeated failure of the
old parties, is the first governing party, which is not peronistic, but at the same time also not
anti-peronistic. Macri has the ability, to finally unite the Argentinians, and not to divide them.
Macri´s party PRO is as well the first governing party in Argentina since hundred years,
which is committed to a market economy, without reservations. This still does not mean, that
suddenly the majority of the Argentinians is in favor of liberal economic thought. To the
contrary: Polls do show, that a large majority of Argentinians, by comparison to other
countries, oes show great skepticism towards the market and wishes a strong intervention by
the state in the economy. The election victory of Macri should therefore not be misunderstood
as a departure by the population from the economic policy of the departing president Christina
Kirchner.
The Kirchner era, which began 2003 with the husband of Kirchner and predecessor Nestor, is
viewed by most Argentinians as an era of economic upturn and social achievements. In the
first eight years of their government terms, the Kirchners, in the shadow wind of the raw
material boom, and not least because of their hard stand against foreign creditors, could spend
the money voluminously and distribute social entitlements. Also in the last eight years of
economic stagnation, with at the same time galloping inflation, and ever scarcer becoming
foreign currency reserves, the government managed, to administer the scarcity in such a way,
that most of the Argentinians were not impacted by it. Macri won the election especially,
because the majority of the Argentinians was simply hung up with the authoritarian
government style and the friend-enemy-thinking of the Kirchnerism, which was permanently
looking for conflicts.
Whether Macri will be successful, will depend, on whether he will be fortunate with his
economic policy. There, Macri is standing before immense and immediate challenges, of
which many Argentinians are not fully knowledgable. The foreign reserve cash box of the
central bank is empty, the Peso is clearly overvalued. ‘The quickly increasing government
deficit is financed by the printing press, because Argentina, because of its never ending debt
conflicts, has hardly access to foreign credits.
As large as the challenges are, though, the chances for Macri are, to end the decades of
Argentina tumbling from boom to crisis and to bring it back onto a stable path. As Macri
rightly states, Argentina is not short of foreign exchange but short of trust. According to
estimates, the Argentinians hold abroad foreign currencies in the countervalue of half an
annual GDP in bank safes or have them bunkered below mattresses.
IAFEI Quarterly | Issue 31 | 17