Monthly Archives: November 2012

Argentina Economy and Politics

As noted elsewhere, Robert recently returned from a week in Córdoba, Argentina. The economic and political environment in Argentina has become more stressed since the Pierce family lived there in 2010.

Inflation has really struck the national economy, and, of course, the people. The international financial community has accused the government of  woefully underestimating the problem in its official inflation rate numbers. The World Bank and IMF and others say it is between 20 and 30 percent per year.  This makes people very cranky about their government, which for nine year has been led by the Kirchners, a socialist-leaning husband and wife couple. Néstor was president 2003 to 2007. Christina became president thereafter.

Of late, there have been a wave of serious popular demonstrations against the tightening policies of the government. It was described to Robert as a revolt by the middle class.  Sort of a Tea Party -like movement that the current government is publicly writing off as aimless. Robert’s friends in Córdoba seem to agree with some of the arguments of the protesters. But, by their own words, they are not especially interested in politics and are not taking part, for now.

What are the protests about? Inflation, the perceived unfair redistribution of wealth, and the increasingly severe restrictions on importation of foreign goods and the purchase of foreign currency.

Argentina has had a very hard time attracting investment and keeping money in the country since it floated the peso and defaulted on national debt more than 10 years ago. At this time, anyone who is able to accumulate wealth in Argentina promptly converts the money to dollars and invests it in Europe or the United States.  In things like Miami real estate.

In response, the government has  made it illegal to buy dollars except under government license.  The government also continues to severely limit imports of foreign made goods. This, combined with the common middle-class person’s perception that Kirchner buys the votes of the poor and chronically unemployed portion of the population with a steady stream of welfare payments, that there is widespread corruption, that rule of law does not exist, and that  Kirchner will soon seek to amend the country’s constitution to allow her a third term as president, are making things pretty ripe for change in Argentina.

Argentina Economy and Politics

As noted elsewhere, Robert recently returned from a week in Córdoba, Argentina. The economic and political environment in Argentina has become more stressed since the Pierce family lived there in 2010.

Inflation has really struck the national economy, and, of course, the people. The international financial community has accused the government of  woefully underestimating the problem in its official inflation rate numbers. The World Bank and IMF and others say it is between 20 and 30 percent per year.  This makes people very cranky about their government, which for nine year has been led by the Kirchners, a socialist-leaning husband and wife couple. Néstor was president 2003 to 2007. Christina became president thereafter.

Of late, there have been a wave of serious popular demonstrations against the tightening policies of the government. It was described to Robert as a revolt by the middle class.  Sort of a Tea Party -like movement that the current government is publicly writing off as aimless. Robert’s friends in Córdoba seem to agree with some of the arguments of the protesters. But, by their own words, they are not especially interested in politics and are not taking part, for now.

What are the protests about? Inflation, the perceived unfair redistribution of wealth, and the increasingly severe restrictions on importation of foreign goods and the purchase of foreign currency.

Argentina has had a very hard time attracting investment and keeping money in the country since it floated the peso and defaulted on national debt more than 10 years ago. At this time, anyone who is able to accumulate wealth in Argentina promptly converts the money to dollars and invests it in Europe or the United States.  In things like Miami real estate.

In response, the government has  made it illegal to buy dollars except under government license.  The government also continues to severely limit imports of foreign made goods. This, combined with the common middle-class person’s perception that Kirchner buys the votes of the poor and chronically unemployed portion of the population with a steady stream of welfare payments, that there is widespread corruption, that rule of law does not exist, and that  Kirchner will soon seek to amend the country’s constitution to allow her a third term as president, are making things pretty ripe for change in Argentina.