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Argentina’s Decline

The onetime ‘jewel of South America’ is suffering the effects of leftist populism.

10:30 AM, Feb 9, 2011 • By JAIME DAREMBLUM
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Cristina Kirchner would argue that her spending and investment policies—facilitated by high global soy prices—have helped the Argentine poor. Yet those same policies have produced runaway inflation, which is much harder on low-income citizens than it is on the rich. Indeed, the Kirchner economic agenda has been disturbingly similar to the Chávez agenda. While Kirchner has not created a dictatorship (as Chávez has), she has often behaved in an authoritarian manner. For example, Kirchner has frequently bullied opposition journalists, and press freedom has deteriorated significantly under her watch. Meanwhile, she fired Argentine central bank president Martín Redrado in January 2010 after he refused to transfer $6.7 billion worth of foreign exchange reserves to help the government repay defaulted debt. 

Argentina used to be hailed as “the jewel of South America.” Today, it is a country in serious decline. Kirchner continues to deny that inflation poses a real economic threat, thereby weakening her (already diminished) credibility and exacerbating investor fears. Argentines deserve better political and economic leadership than they have received from the current government. Whether they get such leadership will depend on the outcome of the next national election, which is due in October.

Jaime Daremblum, who served as Costa Rica’s ambassador to the United States from 1998 to 2004, is director of the Center for Latin American Studies at the Hudson Institute.

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