Mafia

Veo en Sine Metu un link a forbes.com con un muy buen análisis de la situación argentina. El título hace referencia a unos de los personajes de The Sopranos, una serie de HBO sobre una familia de la mafia.

Argentina and Tony Soprano--Perfect Together
Argentina recently reminded the world why its economic prospects are bleak; why as a country it continues to fall behind the rest of the world; and why half the population lives in poverty, with little possibility of improving its lot in life. The government has declared that it's going to shaft private bondholders. Argentina defaulted on some $80 billion of dollar-denominated debt three years ago. Add in the unpaid interest and these obligations come to more than $100 billion.

After stiffing bondholders for over three years, the government is now making them an offer that they should indignantly refuse: It will pay bondholders about 30 cents on the dollar. Argentina is, in effect, giving the rest of the world its middle finger. The country is quite capable of restructuring this debt in such a way that bondholders eventually could be made whole--or almost whole--in the years ahead.

This is lawlessness, pure and simple. The government figures it can stiff these creditors and get away with it. What government officials don't understand is that the rule of law is essential for future prosperity. Investors will be loath to make the kind of commitments they would normally make in Argentina because of fears that the government will arbitrarily change the rules some day and stick them with losses.

Argentina's treatment of these bondholders is symptomatic of the country's malaise. Domestic crime is rampant, having increased exponentially after the economic crisis of 2000-01. The courts are corrupt, and many politicians are on the take. By trampling property rights, especially of individuals, the government has made it clear that anything goes, that those who have the power can wield it without restraint.

Sadly, Argentina's attitude is not new, which is why, although a century ago Argentina was one of the most prosperous countries on Earth, today it would be lucky to make the top 60. Sure, its economy has recently enjoyed a brief spurt of growth, thanks to a global commodities boom and the government's not servicing its debts. But this is no more than the equivalent of a dead-cat bounce. Already the pace of growth is slowing. Needed investments in the economy are not being made, and the situation looks to get worse. Inflation is stirring again, and Argentina's president is now hinting that if prices do go up, controls will be clamped on.

The International Monetary Fund deserves its share of discredit for pushing antigrowth, pro-inflation, pro-big-tax prescriptions on Argentina. But Argentina's government deserves most of the opprobrium for its thuggish behavior.

Bondholders can cry over their losses. But Argentineans should be crying over the great potential that's been gratuitously lost.