MercoPress. South Atlantic News Agency
The Economist on Argentina's economy: happy-go-lucky Cristina
Earlier this year, Cristina Fernández de Kirchner, Argentina’s president, proffered some advice to European governments facing recession and market panic. Its essence was “stuff the IMF and carry on spending.” It is what she and her predecessor and husband, Néstor Kirchner, have practiced since 2003. Argentina is one of only a handful of countries that refuse all dealings with the IMF. Almost a decade after it defaulted on $90 billion of debt when its economy collapsed, it still has few financial ties with the world and very little bank credit. Yet contrary to repeated forecasts of doom from orthodox economists, the economy is roaring. Read full article
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Disclaimer & comment rulesTypical The Economist-style paper: a politically motivated propaganda-piece.
Aug 22nd, 2010 - 04:23 am - Link - Report abuse 0The Economist says:
Aug 22nd, 2010 - 10:23 am - Link - Report abuse 0“Yet contrary to repeated forecasts of doom from orthodox economists, the economy is roaring.”
And.............................
“ The doomsayers have been wrong about Argentina, but they may yet be proved right in the end.”
The Economist doesn't say:
Those“ Doomsday Orthodox Economists” are themselves..........
Argentina was doomed by “The Economist” in 2001
Argentina was doomed by “The Economist” in 2002
Argentina was doomed by “The Economist” in 2003
Argentina was doomed by “The Economist” in 2004
Argentina was doomed by “The Economist” in 2005
Argentina was doomed by “The Economist” in 2006
Argentina was doomed by “The Economist” in 2007
Argentina was doomed by “The Economist” in 2008
Argentina was doomed by “The Economist” in 2009
Argentina was doomed by “The Economist” in 2010
Argentina went through steady inflation from 1975 to 1991. At the beginning of 1975, the highest denomination was 1,000 pesos. In late 1976, the highest denomination was 5,000 pesos. In early 1979, the highest denomination was 10,000 pesos. By the end of 1981, the highest denomination was 1,000,000 pesos. In the 1983 currency reform, 1 Peso argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentinos. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 (1992) peso = 100,000,000,000 pre-1983 pesos.
Aug 22nd, 2010 - 10:43 am - Link - Report abuse 0Annual inflation now 25%.
Fingers crossed, eh?
(3) Conqueror
Aug 22nd, 2010 - 10:46 am - Link - Report abuse 0Yes...... and your point is?
What doesn't make sense and this is why I think these figures are all made up is that crime and slums don't increase when economic times are good.
Aug 22nd, 2010 - 01:52 pm - Link - Report abuse 0I can't find the link but the article said there has been 1 robbery a day of people leaving banks in Buenos Aires and violent crime is up 300% in this last quarter alone.
Thought you were supposed to be intelligent, Think.
Aug 22nd, 2010 - 04:33 pm - Link - Report abuse 0DYOR.
(6) Conqueror
Aug 22nd, 2010 - 04:59 pm - Link - Report abuse 0Thanks for your supposition about mi inteligence...................but.... I still don't get it.
You mention the inflation rates of the military dictatorship period (1975-1991) and their succsessors that overtook a destroyed economy.
What is the relevance besides proving once again that we are on the right path?
When - after a period of marked recession - the Argentine economy grew 8% in 2003, the IMF forecasted that it was only temporary, that Argentina would fall back in recession. But since 2003 Argentina has been growing steadily, above 6% a year.
Aug 22nd, 2010 - 08:00 pm - Link - Report abuse 0Economic forecasting is not a precise scientific endeavor. Not only the economy is unpredictable at the middle term, but sometimes forecasting - specially forecasting by mainstream media - tends to be biased by non-economic factors. For instance, by political bias on the part of journalists. Argentina's doomsday has been chanted for all too long, but it hasn't arrived so far. And we know there are political reasons to bash Argentina: its non-aligned foreign policy and its heterodox economic stance.
Again I will say the economists didn't forecast that the Ks would steal private property to keep the money rolling out to the poor. $28B from the pensions alone can keep that sized economy going for a long time. Although I am not sure there are any more places to raid except the Central Bank Reserves. So let's see what happens after then next presidential election. The rules of economics are like gravity you can't say they don't apply to Argentina it will catch up with you eventually.
Aug 22nd, 2010 - 11:28 pm - Link - Report abuse 0“With tax revenues falling, she paid for these measures by raiding the national lottery and the pension system...and siphoned off $6.6 billion from the Central Bank’s reserves in order to pay debt.”
Aug 23rd, 2010 - 12:15 am - Link - Report abuse 0And..“According to a senior official, these were emergency measures which saved jobs and welfare payments and the alternative, a fiscal squeeze, would have made the downturn worse.”
Seems to me Argentina is burning down all the ships on the beach in order to dodge a crisis that could have been solved with fiscal policy. They might win the next elections, but at price?
I´m sorry but I have a shout fron my heart long life P long life P.
Aug 23rd, 2010 - 03:23 am - Link - Report abuse 0(10) JoseAngeldeMonterrey
Aug 23rd, 2010 - 04:27 am - Link - Report abuse 0Of course it sounds to you like ifArgentina is burning down all the ships on the beach in order to dodge a crisis that could have been solved with fiscal policy....... It is supposed to sound exactly so....
.
But.........
1) This so called “raid” on the National Lottery is just a story of using its capital to guarantee the emission of some 50 million U$D debt bonds. Hardly a sum that can “finance” Argentina, but usefull to mention in this context.....
2) The pension system was “privatized in the 90's and those private ”actors” were failing miserably in 2008. Under the excuse of the international crisis they began to crack one by one, potencialy leaving 6 million Argentines witout any pension.
Many of those private pension funds directors are today living the sweet life in Miami. Our government couldn't do other than recreate the old system of state pensions.
Pensions are today, guaranteed by the state and being paid....
3) Yes, Argentina is paying external debt with cash from the Central Bank reserves. what's wrong with it?
It is this government that has boosted those reserves from under 15 to over 50 billion U$D in the last seven years!
How would you recommend us to pay our debt?..... Taking more debt?
Really guys can anyone trust what The Economist, FT, etc. write.
Aug 23rd, 2010 - 06:13 am - Link - Report abuse 0All publications belong to the same group http://www.ft.com/aboutus/ft-group-companies
http://www.ft.com/aboutus/ft-group-companies
And part is owned buy “Rothschild banking family of England” I hope you know what that means. Do you?
So for them if you save bankers (Especially owned by them) you are the best economy in the world but if you create jobs, prosperity industries, etc you are an evil populist communist Stalin Style.
If you want to keep fresh your food without a fridge use a couple of pages of the Economist has more conservant properties than formol. They had handled to keep Britain in the middle age mentality until now. Look if they are good on doing that.
I really would be worry when they publish something good about Argentina.
So everything is ok : )
I don't trust The Economist. This has nothing to do with who runs it, but rather with the level of factual inaccuracy that run its articles. Its bias - both political (pro-West) and economic (pro-free market) - are also rather evident throughout the papers. This is just the case with Argentina. As Argentina is neither pro-U.S. nor does it obey liberal orthodoxy, it gets bashed.
Aug 23rd, 2010 - 07:52 am - Link - Report abuse 0If you don't trust The Economist please show me an article written in English that says Argentina has created/tested these new economic laws and that are working, stable and predictable.
Aug 23rd, 2010 - 12:17 pm - Link - Report abuse 0http://www.insurrectasypunto.org/index.php?option=com_content&view=article&id=3640:argentina-2-millones-de-personas-viven-en-qvillas-miseriaq-de-buenos-aires&catid=7:notas&Itemid=7
All is well...All is well... only 2MM people living in the slums of BA alone, growing everyday. My my we are prosperous.
It's not that I trust the Economist that much. They are just opinionated about many economic and political issues.
Aug 23rd, 2010 - 06:52 pm - Link - Report abuse 0I think the economic formulas to take a country out of debt and poverty have never been a concealed secret, they have been there for two millenia. Even the Romans new good fiscal policy was necessary to keep the empire from falling apart.
My point is that the current administration is trying to precisely avoid that for politica reasons.
If I am recall correctly, Cardoso in Brazil enforced a fiscal policy that was necessary to get the country out of its financial crisis and to establish a solid economic infraestructure from which the country's economy could expand continually.
in Mexico, President Zedillo also took the country through some very tough fiscal policy, and it didn't resort to taking money out of reserves to pay debt, or to nationalize private pension funds.
If the funds of the lottely were not significant, why did the administration appropriated them? doing that sends a very bad signal to the investor communities around the world. The use of reserves to pay debt, the nationalization of pension funds is what have them weary of the situation in the country.
Then of course, there's a new economy out there and we are in uncharted territory here again, there's China and India and entire continents in continuous economic expansion. Argentina may not need to go through hard fiscal policy if they can leverage on many opportunities yet I am afraid they are running on a very thin line here.
However I do believe the argentinians have shown an incredible resilience time and again and will weather any coming storm as they have done in the past.
I couldn't get enthusiastic about my currency devaluing by 10,000,000,000,000% in 17 years, then doing nothing spectacular for 11 years, and then increasing in value by less than 50% in 7 years by questionable means and figures since they fiddled with INDEC, no wonder money leaches away to foreign shores when it is made.
Aug 24th, 2010 - 02:00 am - Link - Report abuse 0With such a record, and $90 Billion defaulted to the IMF, $6.6 Billion raided from the Central Bank Reserves, $28 Billion raided from Private Pensions, and God only knows how much raided from the Lottery; a total of at least $125+ Billion in real terms lost from the Argentine Economy, I find it astonishing that the Argentine Government can hoodwink its population that, through good fiscal practice, its made $35 Billion in Central Bank Reserves over the same period.
Anyone else would be ashamed, but I suppose reality is lost in all the political hype.
(17) Wireless
Aug 24th, 2010 - 02:34 pm - Link - Report abuse 0The 90 Billion defaulted that you mentioned where defaulted BEFORE the Kirchners.... They have since successfully renegotiated 97% of all payments....
The 6,6 Billion “raided, as you choose to denominatet hem”, from OUR Central Bank reserves were used to pay Foreign Debt.......
The 28 Billlion “raided, as you choose to denominate them”, from the failed and near bankrupt private pension funds (kind of Enron in USA... remember them?) have been transfered to a State Pension System and pensions are beeing paid and guaranteed by the state....
The “God only knows how much raided from the Lottery” is very simple.... not one Peso, just using the capital to guarantee the emission of Bonds....
It is you that should be ashamed about your ignorance of actual facts of the Argentinean economy.... specially when you choose to comment on them.....
See wireless, that lottery money hasn't been stolen, they're just using it elsewhere.
Aug 24th, 2010 - 07:57 pm - Link - Report abuse 0From the Great God Wiki - “ ... It targets highly educated readers and claims an audience containing many influential executives and policy-makers...”
Aug 25th, 2010 - 02:32 pm - Link - Report abuse 0Could be that the problem is contained in that very sentence ?? :-)
Like this “highly educated” american?
Aug 25th, 2010 - 08:41 pm - Link - Report abuse 0http://www.youtube.com/watch?v=dVb3Dbgalhw
The economist is just like Clarin.
Aug 26th, 2010 - 09:42 am - Link - Report abuse 0Anything wrong with criticising the government of the day? Anything wrong with taking the p*** out of politicians? Not in the FREE world. On the other hand, there are some countries where it's not allowed.
Aug 26th, 2010 - 05:18 pm - Link - Report abuse 0Especially if you start getting close to the truth!!
BE AWARE! After I posted some history facts someone is posting under my name marco.
Aug 27th, 2010 - 02:10 am - Link - Report abuse 0Mr editor can you verify who is doing that?
Thank you
Here is what I posted that this person or persons did not like:
The Chagos Islands became, like the Falkands and a dozen other small remnants of the British Empire around the world, a Crown Colony. (Later, in a terminological manoevre to deal with the fact that the tide of world opinion had turned against colonialism, the British Crown Colonies were re-named by an act of Parliament as the British Dependent Territories; and they were subsequently re-named again as the British Overseas Territories.)
http://upload.wikimedia.org/wikipedia/commons/8/8e/English_imperialism_octopus.jpg
margo, grow another brain cell, that one's worn out with pasting outdated rubbish all over the place.
Aug 27th, 2010 - 08:55 am - Link - Report abuse 0Dont complain, the other marco appears to be intelligent!
Looks like the islanders do not like Freedom of speech nor to listen or see the truth
Aug 27th, 2010 - 05:58 pm - Link - Report abuse 0For five years Mike Bingham and his family suffered police harassment, death threats, attacks on their property, and attempted deportation.
Eventually Bingham took the Falkland Islands Government to the Supreme Court for Human Rights abuse, and won
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