Argentina would make a great lesson for civics if world leaders are interested in taking a look at the best ways to grind a country into the dirt.
One hundred years ago, when Harrod’s started looking for a place to install its first overseas branch, it chose Buenos Aires in Argentina. In 1914 Argentina could truthfully be called the country of the future. The economy had grown faster than that of the United States and its GDP was higher than Germany, France or Italy. Blessed with fertile agricultural land, a sunny climate and a new democracy, immigrants arrived from everywhere. For the ambitious and young, the decision between Argentina and California was a difficult one.
There are still many things to like about Argentina. The Patagonia wilds, the world’s best soccer player, Lionel Messi and empanadas. The Argentines, for the most part, are among the kindest, most caring people on the globe, but the country is a wreck.
Harrods shut its doors in 1998 and Argentina is, again, at the center of a market crisis. The current crisis can be squarely placed on the doorstep of its president, Cristina Fernandez de Kirchner. But Cristina is just the latest in a long line of financially illiterate leaders that stretches back to Juan and Eva (Evita) Peron, and even before them. The Argentines used to look down on the Chileans and Uruguayans, now those two countries are richer than Argentina. When it comes to educational tests, Chile and Uruguay join Brazil and Mexico in besting South America’s second largest country.
Why should the world dwell on a single national tragedy such as Argentina? Simple. When people look at the worst that could happen to their country, they think of totalitarianism. With communism’s final collapse, that doesn’t seem too likely. If Indonesia were to erupt today, its citizens wouldn’t think of turning to North Korea as a model government. Spain and Greece are not looking to Lenin to solve their euro problems. The real danger for countries in the 21st century is becoming like Argentina.
Argentina has had its share of bad luck. The economy which was fueled by exports between the World Wars was subsequently throttled by protectionism. Argentina relied too much on Britain as a trading partner. The Perons were charismatic populists. And, like the rest of South America, Argentina held onto the Washington thought of favoring open markets and privatization when it tied the peso to the dollar in the 1990s. Then crunch-time in 2001 left Argentines permanently suspicious of liberal reforms.
But bad luck is not the only culprit. The economy, the country’s politics and its hesitancy to change makes Argentina’s steady decline a self-inflicted, terminal wound.
Commodities were Argentina’s greatest strength in 1914. Then, commodities became a curse. One hundred years ago, Argentina was a leader in adopting new technology. The Perons showed up and built a closed economy that rewarded inefficiency and corruption. Meanwhile, Chile’s generals opened the country up in the 1970s and moved ahead. Argentina’s spirit of protectionism threw Mercosur, the South American version of NAFTA, under the bus. Fernandez’s administration today does not just put tariffs on imports, it levies a tax on farm exports as well.
Argentina never did take the time to build the institutions needed to protect the young and stumbling democracy, so the country has been prone to coups throughout its history. In Australia, another commodity-rich country, strong political parties were established to build and share wealth. In Argentina, the politics was held hostage by the Perons and was focused on personalities and influence peddling. With the Supreme Court routinely tampered with and the government’s statistical office a laughingstock, corruption is pandemic. Under Kirchner’s “leadership”, the country ranks a shabby 106 in Transparency International’s corruption index.
Building a government is a dull, slow business and Kirchner, like her predecessors, prefer the quick fix. Bring in the charismatic leaders, the miracle tariffs and the currency corrections.. Along with that comes what Argentina has gotten, corruption, kleptocracy and inefficiency. These, along with other attributes, is what guarantees that Argentina would make a great civics lesson.
Visitar, an Argentine company that handles health care much like an HMO in America, is just one of the latest examples. Conceived with a good idea in mind, Visitar was established with the help of corrupt politicians who were willing to bend the law in exchange for Visitar officials sliding them pesos under the table. What could have been a great company providing quality service, Visitar is now just a shell, offering no savings to its clients and inefficiency to the point that many Argentines would rather seek help at one of the government-funded public hospitals than step foot inside a Visitar facility.
Argentina’s slide has not been sudden. It has been seductively gradual and by degree. Even with a dreadful spot on the country’s history from 1976 − 1983, it has never suffered a Mao or Stalin. One consistency through the decline has been the cafes of Buenos Aires. Portenos, as locals are called, have blithely continued to sip the espresso while their country fades into obsolescence, poverty, crime and corruption; much like having tea on the Titanic after the iceberg has been struck.
The lesson which can be learned from Argentina is that good government matters. Maybe in Argentina it is a lesson that has been learned and in another 100 years the world will look back at a country of the future that got stuck in the mud of the past.
Or the lessons learned in Argentina will be forgotten and it will never make a great civics lesson.