Sunday, August 26, 2012

Guest Blogger: 

Argentina: La economía del país sureño va en picada, al tiempo que se intensifica la crisis (The Economy of the Southern Country Goes into a Tailspin while the Crisis Intensifies) 



Argentina’s economic situation is getting worse. Meanwhile, President Kirchner fills the country with populism, pressures foreign capital, and threatens to nationalize the companies that want to repatriate capital (as was done with “Repsol”); and she keeps silent about the country’s grave problems, like, for example, Argentina’s 25% annual inflation rate that is eating up the money of the Argentinean people. Nor does she speak of the fall in industry or the lack of reinvigoration of consumer spending. 

If we think about what this means for Argentineans to see their money dwindle without the power to avoid it, as a consequence of inflation, the situation is alarming. Traditionally, the government uses the strategy of filling the market with money to accelerate economic growth. This would succeed in stimulating the economy, but apparently this has had not yet had any effect in Argentina. 
This case is even worse if we see that economists agree on their prediction that Argentina has a 99% chance of entering the second half of this year (that is to say, now) into an economic recession. 

The problem is not just an economic issue. Experience in Latin America tells us that during the crisis, everyone should participate in the solution, perpetrators as well as victims, because the consequences are the same for all citizens. But in Argentina it would appear that there is another idea. Facing an economic crisis, the strategy that the government has taken has been to politically persecute important figures of national politics instead of asking for their support in looking for solutions. Another strategy has been to silence obvious situations, like, for example, that today Argentina presents the highest inflation rate on the continent. Parallel to this, the government has ordered financial investigations, for tax evasion, against business owners that are against the government. This attitude, not only failing to address substantial economic problems, scares investors and creates panic in a population that already lived through a similar, and very dramatic,  situations  in the past. 

As if that weren’t enough, the president encourages her followers to discuss a constitutional amendment reform that would make it constitutional for her to stay in power for a third term. In other words, while the ship is sinking, she asks us to make an appointment with the hairdresser. 

In reality, President Kirchner is not the only head of State with the reelection virus. We see it with the Venezuelan president, who after 14 years is presented again as a presidential candidate. It is seen with President Correa, of Ecuador, who doesn’t lose an opportunity for publicity, as we are seeing with the case of the asylum granted to Australian Julian Assange. It is also clearly seen in the case of Evo Morales of Bolivia, and as is happening with Daniel Ortega in Nicaragua, who has already won re-election despite the fact that this is prohibited by the Constitution of his country. All of this occurs in those nations without a valid  counterweight in the balance that shows the errors of these leaders, but the political oppositions in these countries, including Argentina, are discredited and very divided. For this reason, those oppositions, like medicine, sometimes turn out worse than the sickness which it is supposed to cure. The question is, “How long will citizens continue to calmly accept the decisions of their leaders?” Currently, the former president De la Rua is on trial in the Argentine court on corruption charges.  Will this be done with President Kirchner in the future?

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