What the Kirchners think is their "new model" for Latin America is essentially the short-term reward resulting from the massive devaluation of the currency a year and a half before Nestor Kirchner took office, the skyrocketing prices of the country's commodities, and the president's decision to pay back barely one-third of the face value of $140 billion worth of government debt paper.
The prices of Argentina's cereals, fuels and minerals have experienced a double-digit rise this year, continuing a trend that, together with cheap tourism, has helped generate GDP growth rates of between 7% and 9% in the last four years. As the world's fifth largest exporter of foodstuffs, Argentina is having a field day with the voracious demand coming from China and other nations. At times, Argentineans seem to be reliving their golden 19th century days when their abundant meat and cereal exports attracted millions of Europeans to Buenos Aires in search of the cornucopia.
But these blessings conceal two fundamental problems. The first is a dysfunctional institutional environment. It did not start with the current administration but the presidential couple has made it worse. The second problem is a byproduct of the first: An economy riddled with political bottlenecks that are consuming the capital accumulated in the previous decade, and fueling inflation.
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Empeñados en el cortoplacismo. Es increíble, pero seguimos creyendo que comiéndonos el capital nos salvamos. Y que dura para siempre.
ReplyDeleteCon una buena cosecha nos salvamos todos. ¡Si Dios es argentino!
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