Joseph Stiglitz: Argentina's COVID Miracle

[peppertree]

Last edited Thu Mar 10, 2022, 08:59 PM - Edit history (1)

Unlike the United States, which could spend one-quarter of its GDP protecting its economy from the COVID-19 fallout, Argentina entered the pandemic with the deck stacked against it.

Yet, thanks to the current government’s policies to strengthen the real economy, the country has been enjoying a remarkable recovery.

Argentina was already in a recession when the pandemic hit, owing to a large extent to former President Mauricio Macri’s economic mismanagement.

Everyone had seen this movie before: A right-wing, business-friendly government had won the confidence of international financial markets, which duly poured in money.

Then, when things went awry – as many observers had anticipated – the IMF stepped in in 2018 with its largest-ever rescue package: a $57 billion program, of which $44 billion was quickly dispersed in what many saw as a naked attempt by the IMF, under pressure from U.S. President Donald Trump, to sustain a right-wing government.

Given the mess that Argentine President Alberto Fernández inherited in late 2019, it appears to have achieved an economic miracle.

From the third quarter of 2020 to the third quarter of 2021, GDP growth reached 11.9%, and is now estimated to have been 10% for 2021 (compared to 4.5% projections) – while employment and investment have recovered to levels above those when Fernández took office.

The country’s public finances have also improved, and there has been significant growth in exports.

At: https://www.project-syndicate.org/commentary/argentina-covid-economic-miracle-by-joseph-e-stiglitz-2022-01

Nobel Laureate Joseph Stiglitz and Argentine Economy Minister Martín Guzmán - his former student.

Professor Stiglitz lauded Argentina's against-all-odds economic recovery - with real GDP now around 3% higher than the same time in 2019, and budget deficits at a modest 4% of GDP.

He noted, however, that the $44 billion bailout debt inherited from right-wing President Mauricio Macri - reportedly granted over the IMF's own objections at Donald Trump's behest - would be difficult to repay even under a 10-year agreement.

[OAITW r.2.0]

1. One constant over my 50 years of studying politics.

You can count on US support of RW/anti-democratic regimes in So. America and Central America - when the Republicans are taking care of business in the WH.

[peppertree]

2. True - and the IMF Macri bailout is probably the biggest Trump scandal NOBODY's heard of yet

Trump was very supportive of Macri - who, you might recall, shares a hard-right worldview as well as a 35-year friendship with His Orangeness.

So when Macri's debt bubble imploded in April 2018, it was easy for Macri to talk Trump into basically forcing the IMF to give him a massive bailout - especially with Argentina's elections just around the corner.

The IMF's own board - notably David Lipton, who now advises Sec. Yellen - objected; but it was no use.

$45 billion were lent to Argentina, knowing the dollar-poor country could never repay that in just 4 years (it might take 20, or more).

When Macri, in fact, lost the 2019 elections, the credit line was shut off - leaving Argentina with the tab, for what's basically history's largest campaign donation.

And the money? Macri allowed speculators (mainly domestic, some foreign) to use the bailout to dollarize their assets, and then offshore them.

[Judi Lynn]

3. The corporate media will do their best to play down the healing work Alberto Fernndez has managed

in an amazingly short time, considering the outrageous challenge! That had to have driven the fascist element still in Argentina insane, or more insane. All their hard skulking, scheming, pilfering, coersion, lying, cheating, and terrorizing, didn't bring them right back into power, yet, after the ethical, hard-working President pulled the economy out of the deep ditch where they left it.

I hope the voters there have watched very closely, and will remember this when it's time for the next Presidential election, while the country's powerful right-wing media will do their best to attack Alberto Fernández daily. Same people who completely denied the Dirty War, the tortures, the disappearances, the well-known "death flights" in which military pilots flew groups of political prisoners out to sea, or over huge rivers, while their crews chained them together and threw them out of the door into the water. They even threw a pair of French nuns who dared to protest their brutality.

Alberto Fernández is profoundly, genuinely courageous in daring to go up against the same element in Argentina to bring help to those have suffered far too long, along with their parents, grandparents, and friends of all ages.

Very cool seeing Stiglitz's concern and appreciation are engaged in caring about this administration so well.

What great news!

[peppertree]

4. You're not kidding, Judi - above all, ARGENTINE corporate media

They literally spend every waking moment trying to provoke a panic, a run on banks, and/or violence - anything they think will overthrow the Fernández administration.

In their own country!

Even Governor Gerardo Morales - best known for jailing activist Milagro Sala in 2016, you'll recall - scolded Macri's coalition today for "failed economics" and "wanting everything to explode."

Morales clearly has one foot out the door of the RW coalition - and I'm sure he's not the only one.

Thanks as always for taking the time - and a belated Happy New Year!