Last 31th of May and after an intense parliamentary session, the Argentine Senate approved the legislation that limits the tariffs for communal services (gas, water, electricity), which suffered a runaway rise since the last devaluation of the Argentine peso. President Mauricio Macri, as he had anticipated (and, in fact, signed previously) vetoed the law, arguing that the cost of denying the fare reality[1] would amount to around 110 billion pesos (approximately 3,800 million euros)[2].
This measure marks the umpteenth attempt of the Argentine president to normalize the socioeconomic situation of the South American country. Throughout its recent history, Argentina was characterized by taking unexpected and, in many cases, contradictory paths. Liberal, conservative, social democratic and populist, Argentine has also protected Nazis and war criminals fugitive since the end of the Second World War. However, it has also been one of the first countries to recognize the State of Israel[3], an ally of the United States during the Cold War[4], and an enemy of the United Kingdom during the Falklands War. It seems like the main characteristic of Argentina throughout the 20th century has been uncertainty. Despite 2018 is the 35th anniversary of the Argentine democracy (of full force and undisputed good health), it is worth clarifying that only in 1999 was the first transfer of command between a democratic president and a counterpart, under normal circumstances[5].
The rise to power of President Mauricio Macri, which took place on December 10, 2015, marked the first electoral victory of a candidate not emerged from the two historical political parties in Argentina: the Justicialist Party (founded by Juan Domingo Perón in 1946) and the Radical Civic Union (founded by Leandro N. Alem in 1891). Throughout two and a half years of government, President Macri promoted several measures with the stated objective of “making Argentina return to the world”[6], to turn the country of Lionel Messi and Pope Francisco into a reliable place, respectful of the Rules and attractiveness for investors. Quite an odyssey!
In spite of everything that I have said so far, there are reasons for optimism because the numbers are on our side. Argentina is the third most developed economy of Latin America after Brazil and Mexico. Argentina is also a member of important international organizations such as the G-20 and the G-77. It has a GDP (nominal) around 450 billion euros and a GDP per capita (nominal) of around 11 thousand euros. The main asset of the country was and still is, the immensity of its natural resources; as an anecdote, it is worth saying that, at the beginning of the 20th century, the country was already known as ‘the world’s breadbasket’. Argentina not only has an important agricultural wealth but also an enormous mining, gas and oil potential. Furthermore, the country also has vast reserves of fresh water, lithium, and phosphates. With a thriving service sector, there are already numerous Argentine companies with an international presence and some of them are even listed on the New York Stock Exchange[7].
With the approval of the International Monetary Fund (institution to which Argentina returned[8] after a long time)[9] and the support of front-line countries (such as the United States, Japan, France and the United Kingdom)[10], the second decade of the 21st century can be the take-off platform that Argentina not only needs but is also looking for.
Quick facts about Argentina
About the author:
Eduardo Fort holds a degree in Political Science from Complutense University of Madrid. He has participated in academic projects related to History of Ideas and Political Theory. He has collaborated with various media – newspapers and television- as an international analyst and specialist in Latin America.
Sources:
[1] In Argentina, due to policies designed by the government of Néstor Kirchner (2003-2007) and Cristina Fernández (2007-2015), large sectors of the population are benefited by a system of subsidies for energy consumption.
[2] Braslavsky, G (2018) Tarifas: Mauricio Macri vetó la ley en tiempo récord y se endureció con el peronismo. Clarín. Available online: https://www.clarin.com/politica/macri-veto-ley-tiempo-record-endurecio-discurso-peronismo_0_HkDzglA1m.html [Last access: 07.06.2018]
[3] Argentina recognized Israel on February 14th 1949, less than a year after the proclamation of the State of Israel.
[4] Argentina collaborated with the United States providing “military advisers” for the counterinsurgency in Central America, as well as joining the US boycott to the Moscow Olympic Games in 1980.
[5] In 1989, president Raúl Alfonsín had to leave office six months earlier. In 1995, his successor Carlos Menem was re-elected.
[6] Cué, C (2017) Macri: “Los argentinos dijeron basta de echar la culpa al mundo de lo que nos pasa”. El País. Available online: https://elpais.com/internacional/2017/02/23/actualidad/1487876091_370254.html [Last access: 07.06.2018]
[7] To mention a few: the Globant computer, the Mercado Libre that buys and sells platform, or the Macro and Supervielle banks. To these it should be added Corporación América (which controls 51 airports around the world) and the energy companies Central Puerto, Genneia and Pampa Energía.
[8] Todo Noticias (2018) Macri: “Decidí iniciar conversaciones con el FMI” (Video file). Available online: https://www.youtube.com/watch?v=YTiTFcACJKU [Last access: 07.06.2018]
[9] Viaña, D (2018) ¿Por qué Argentina ha tenido que pedir otra vez ayuda a su ‘odiado’ FMI? El Mundo. Available online: http://www.elmundo.es/economia/macroeconomia/2018/05/10/5af34989e2704eb1158b46a9.html [Last access: 07.06.2018]
[10] Rumi, M (2018) La Argentina recibió el apoyo de países clave en el directorio del Fondo. La Nación. Available online: https://www.lanacion.com.ar/2133945-la-argentina-recibio-el-apoyo-de-paises-claves-en-el-directorio-del-fondo [Last access: 07.06.2018]