Monday, November 23, 2015

What Argentina Isn't

Excellent op-ed in Bloomberg by Alejandro Rebossio on how changes in Argentina will be oversold. In general terms that is a theme I've returned to many times over many different issues. So many countries in Latin America have been labeled at one time or another as the star, as a game changer. This often is tied to ideology, where a new leftist government is solving the problems left by conservative governments, and vice versa. Over and over.

It is one thing for a country to earn money for its speculative investors for a season and quite another for it to develop in a sustainable and equitable way. Despite the boost in gross domestic product and reduction in poverty and inequality that Latin America enjoyed in the first decade of this century, such balanced development remains its most demanding challenge, even if it’s less eye-catching for the markets.

Balance is boring, so much so that it gets ignored. It's rare to read about Evo Morales' fiscal moderation, for example, because it doesn't fit prevailing narratives too well. Right now the Argentine election narrative in the U.S. is business-friendly growth, usually based on the assumption (spoken or assumed) that such a path is also optimal for the average Argentine. That's doubtful but will likely be the narrative for a while.


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