Tag Archives: Macri

An Argentine renaissance?


It’s been said that the only problem that Argentina has is that it is populated by Argentineans. With its incredible endowment of resources – the richest soils in the world, a variety of climates including a huge temperate zone, mineral resources including oil and uranium, vast hydroelectric resources, a homogenous population of European descent –.it should be one of the world’s most prosperous and stable societies.

It’s in the lost annals of history that less than a century ago, Argentina seemed destined to become just that, one of the major countries of the world, just behind Italy. In fact in 1909, per capita income in Argentina was 50% higher than in Italy, 180% higher than Japan, and almost five times higher than in neighboring Brazil. Buenos Aires was – and remains — one of the leading cultural centers of the Ibero-American world.

But Argentina’s dependence on unprocessed agricultural exports set it up as a particular victim of the Great Depression and the adverse terms of trade for commodities. What followed were decades of far-fetched efforts to industrialize through state capitalism under demagogic leadership, most famously represented by Juan Peron and his consort, Evita – romanticized in the U.S. but in fact an insidious influence..

Pres Barack Obama’s short visit to Buenos Aires scheduled for March 23 and 24 is a recognition that something is afoot. In fact it’s a revolution in Argentine politics brought about by the election last November of the U.S.-educated, pro-business conservative Pres. Mauricio Macri, former mayor of Buenos Aires One of Macri’s announced principle aims is too strengthen Argentina’s foreign ties after years of combative relations under his leftist predecessors, particularly with the U.S.

“We believe this is really a new beginning and a new era in our relations with Argentina,” top Obama foreign policy adviser Ben Rhodes says. Recognizing this, French President Francois Hollande and Italian premier Matteo Renzi scooted in for visits just ahead of Obama.

Macri’s election was a surprise and he has an enormous job ahead of him..Although Argentina’s 38 million live in Latin America’s third largest economy, a $100 billion default in 2001 made it a financial pariah, closing it out of international capital markets.

Macri has moved swiftly to try to clear the remaining $9 billion in claims by offering a $6.5 billion settlement. Within days of taking office, he whacked 21,000 public sector workers from the bloated public payroll, devalued the peso and zeroed out long-running fuel subsidies, Macri has made it clear that he is against a government role in promoting industry,. He has proposed tax cuts for upper-income groups. That suggests that budget cuts are in the offing, since Macri has pledged to reduce the government deficit.

But Macri’s rapid policy moves have already created largescale opposition. Within a few weeks of his taking office, he was already hit by public sector workers as a protest against rocketing inflation — at a stubborn 30%.– and his job cuts. Polls indicate Macri still has the approval of much of the electorate that put him in office, with polls saying support runs relatively high at 60%. Still it has fallen 11 percentage points in the two months since he took office. And some 12% of those polled who voted for him said they would change their vote now.

Macri has made his new orientation for Argentine foreign policy clear. He has denounced the taking of political prisoners by the increasingly leftist dictatorial government in Venezulea and called for it to be tossed out of Mercosur, the South American politico-economic alliance. His pro-U.S. sentiments have been made equally clear,

Instead of continuing his flirtation with the Cuban Communist dictatorship, Obama and the U.S. would be better served with some kind of dramatic gesture of support for Macri, perhaps new and more liberal insurance to back promotion of U.S. investment.




Argentina: a new beginning?


Hear, mortals, the sacred cry:

“Freedom! Freedom! Freedom!”

Hear the sound of broken chains

See noble equality enthroned.

Those words from Argentina’s national anthem have a new ring after Sunday’s victory of Mauricio Macri, the centre-right mayor of Buenos Aires, in a run-off election for the presidency.

Macri’s victory brings, temporarily at least, an end to the Peronista epoch.

Although Juan Peron, and his adulated wife, Evita, ruled the country for little less than a decade [1946-55], his presence and at least nominal allegiance to his politics have dominated the country ever since. Even Macri, although building his campaign on change and a return to market economics, once dedicated a statue to the former leader.  Endowed with enormous natural resources, the Argentine economy has fluctuated violently with the political demands of the Peronistas.

At the turn of the 19th century Argentina was considered on its way toward the living standards of Europe and America. From 1880 to 1905, expansion resulted in a 7.5-fold growth in GDP, per capita income rising from 35% of the United States to about 80% during that period. But the Great Depression took a terrible toll and by 1941 its real per capita GDP was roughly half that of the U.S.

Peron, a great admirer of the European fascist dictatorships of the 1930s, originally installed in a military coup, made an appeal to the rapidly growing industrial work force. He trumpeted respect for workers and built a government-controlled Peronista union organization of two million workers. He attacked the country’s previous corrupt, oligarchic regimes with their nominal dedication to democracy with an appeal to the country’s underclass, the so-called “descamisados” [shirtless ones]. His beautiful, shrewd wife, Eva, became a national and international starring personality. 

Peron nationalized railroads, strategic industries and services, improved wages and working conditions, paid off the full external debt and achieved nearly full employment. But the economy went into decline in 1950 because of the unsustainable rapid growth of Evita’s elaborate social welfare benefits, and with her death and a falling out with the military, Peron’s days in power ended abruptly. But during the last seven decades Peronismo has dominated the Argentine political scene and despite its singular Argentine aspects, has become something of a model for the Hemisphere.

Now, Macri’s victory sends a signal throughout Latin America, with Argentine’s 42 millions living in the region’s third largest economy, the second in South America after Brazil. Buenos Aires has long been an important cultural center for the Spanish-speaking world, the most important after Madrid until the large immigration of Spanish Republican exiles to Mexico in the late 1030s. Macri’s victory is the most significant defeat for a leftist candidate in South America for more than a decade. And were he successful, it could return some of the Argentine glory.

But Macri faces formidable obstacles. Not least is the memory of former Pres. Carlos Menem who in the 1990s tried to turn the Peronista drift around, privatizing state utilities and laying off government workers. His free market program collapsed in 2002 living a bitter memory.

Macri has proposed a formidable agenda. He wants to immediately lift restrictions on imports and on US dollars. He needs to tame inflation surging at 30% with devaluation. [A foreign exhange scandal as erupted in the Central Bank where President AlejandroVanoli, a Peronista, insists in serving out his term to 2019.] Macri has promised the powerful farm lobby to junk the corn and wheat export taxes and a quota system, but that comes in a sagging world commodities market.

Macri, 56, will need all his popular backing as former Boca Juniors football executive. [He once wanted to play himself.] His liberalization program was charged in the campaign as part of an agenda of a  spoiled son a very rich, self-made Italian immigrant father. He is likely to face a hostile Congress with its 70-year-long Peronista heritage. But if he is successful, it could be a turning point not only for Argentina, but restoring the country’s once leading role, a welcomed stimulus for all Iberoamerica.