I must admit I had my doubts when earlier this year Argentinean economist Arnaldo Bocco told me that the economy would be the government of Cristina Fernández de Kirchner’s strongest suit in going into the mid-term elections in October 2013.
Most of Argentina’s right-wing media, and the western press that seems to slavishly echo it, had for months been going on about how the Argentine economy was going down the tubes. How, under socialist mismanagement, a growth rate of 8 per cent in 2011 had collapsed to around 2 a year later. And how hedge funds, with which the government was doing legal battle, were going to force the country into another catastrophic default. There was a fair bit of ill-concealed gloating that the economic ‘bad child’ was at last getting its comeuppance.
Well, there might be a few red faces about this week, as figures show Argentina’s economy growing at a rate of 7.8 per cent in May, as reported by Reuters and The Wall Street Journal. The government’s own prediction of 4.4 per cent annual growth for 2013 seems almost modest.
Okay, economic growth is not the Holy Grail as far as New Internationalist is concerned. We are more concerned about sustainability, equity and survival of the planet. But Argentina’s idiosyncratic and unorthodox approach – be it climbing out of the world’s worst debt crisis a decade ago by getting the IMF off its back, or standing up to ‘vulture’ hedge funds today – may yet again be proving the pundits wrong.
The country’s hated currency controls (anathema in the global creed of free trade) have stopped a massive outflow of capital ($21.50 billion in 2011) and produced a small inflow of $110 million in the first quarter of 2013. While Argentina’s ongoing battle with the rapacious ‘vulture’ hedge funds is gaining an ever wider degree of international support – at the Brussels Court of Appeals recently and even within the IMF, which is apparently preparing to back Argentina’s case against ‘vultures’ NML capital et al.
There are ongoing doubts about the quality of the Argentine government’s economic data. But you do wonder whether the opposition embodied in Argentina’s powerful Clarín media group – part owned by US media investor Ralph H Booth who bought Goldman Sachs’ major holding in 2012 – isn’t laying it on extra thick and desperate these days?
Read more about Argentina in June 2013’s New Internationalist magazine.