South America’s New Pariah
Yes, Argentina should be kicked out of the G-20.
8:30 AM, May 8, 2012 • By JAIME DAREMBLUM
Today in Washington, Argentine vice president Amado Boudou will be addressing a Council of the Americas conference on the global economic recovery. I have no idea what Boudou will say in his remarks, and I have no idea how the attendees will receive it. But I do know this: Having a senior member of the Kirchner government speak about responsible economic policy is like having a senior member of the Iranian government speak about religious tolerance.
Néstor and Cristina Kirchner
It’s been less than a month since President Cristina Kirchner announced that she was nationalizing a majority stake in Argentina’s biggest oil company (YPF), a stake that had previously been owned by the Spanish firm Repsol. Her decision triggered outrage in Madrid, and the Spanish government immediately retaliated, saying it would curb imports of Argentine biodiesel fuel. (Meanwhile, the Spanish technology company N2S canceled plans to establish an office in Argentina.) For its part, Repsol vowed to challenge Kirchner’s expropriation in the international court system.
The Wall Street Journal urged Western officials to go a step further: “A better way to send a message to Buenos Aires would be for the world’s civilized countries to expel Argentina from the G-20. When its president wants to behave like a real head of state and not a thug, the country can be invited back into the club of serious nations.” The Washington Post echoed this call for Argentina to be removed from the elite club of major economies (it suggested Chile as a replacement), and a British member of the European Parliament said the EU should at least discuss the idea. The Economist argued that if Western countries booted Argentina from the G-20, terminated its borrowing privileges from multilateral organizations, and stopped allowing its citizens to enjoy visa-free travel in Europe, “Argentines might see the true cost of their president’s antics.”
Those antics have made Argentina a global pariah. Apart from Cuba, Venezuela, and perhaps Bolivia, it is hard to think of another Latin American nation with worse economic management. (Even autocratic Sandinista leader Daniel Ortega is trying to maintain a relatively attractive business climate in Nicaragua.) At a time when most of the region is modernizing and seeking to lure foreign investment, Kirchner has embraced policies worthy of Hugo Chávez. The result? Massive capital flight, soaring inflation, and “the largest number of protectionist measures worldwide,” according to the Latin Business Chronicle.
Not only has the Kirchner government adopted a series of disastrous economic policies; it has also been lying about the consequences. Indeed, for several years now, Buenos Aires has systemically doctored its official inflation data, and it has bullied those journalists and consultants who dared to report the truth. Back in February, the Economist declared that it would no longer be publishing inflation figures supplied by the Kirchner government: “We are tired of being an unwilling party to what appears to be a deliberate attempt to deceive voters and swindle investors.”