Don’t cry for me Argentina
Three days in Buenos Aires at the time of uncertainty over whether Argentina would declare its economy in default or not, was interesting. What was surprising was that nobody in Argentina cares about the consequences, writes Prince Michael of Liechtenstein.
There was something else. Everybody is waiting for President Cristina Fernandez de Kirchner’s term in office to end in October 2015. So why does nobody care about the default and why is everybody waiting for President Kirchner to leave office?
Cristina Kirchner’s late husband, Nestor Kirchner, was elected Argentine president in 2003. A president can only serve for two terms of four years, so in order to prolong the family's rule Nestor Kirchner did not run for a second term. He stepped aside for his wife Cristina Kirchner to be elected president in 2007.
His intention was to seek re-election as president after her. But the plan was scuppered when he died in 2010 and his widow was re-elected for her second presidential term in 2011.
Eva Peron, the charismatic and highly popular wife of three-times President Juan Peron (1946–1952, 1952–1955, 1973–1974), was celebrated in the musical Evita. Eva Peron died while first lady aged 33 and the highlight of the musical is her famous song ‘Dont cry for me Argentina’. Christina Kirchner’s ambition was to be a second Eva Peron.
The Kirchners rule in Argentina has been left-wing, populist and quite authoritarian. Their typical left-wing politics have seen nepotism rewarded within her party and policies favouring nationalisation, price control and government meddling in business. Corruption has flourished and investments have stopped resulting in high inflation levels.
Inflation has ruined savings and pensions and led to increased poverty among the elderly. Under-employment, where people are employed below their skill levels, is high. The official unemployment figures appear reasonable as artificial jobs have been created by the administration. This is a truly negative achievement in a country which could be one of the richest in the world.
Optimism for the future is growing as people can see an end to President Kirchner’s rule. New economic activity is being held back until she has gone.
It is this hope and expectation which overlays concerns about government default, which nobody really expected to happen.
Argentina’s economic problems - inflation and under-employment - are so substantial that the risk of default is almost ignored by most people. And default is not necessarily detrimental to the country's economy, as GIS expert, Professor Enrico Colombatto explained in his report ‘How bail-in, bailout, and no economic rescue for countries will work in future’.
Although it is not known what a future government will do, one thing is certain - Argentina will not cry for the Kirchners.