Argentine President Cristina Fernández on Tuesday presented a new animated cartoon series about the country’s sovereign debt history.
The series, called “Martians,” runs repeatedly on the government’s Encuentro channel.
Fernández, who has been a fierce critic of the way Argentina borrowed money in the past, hopes the series will help Argentines, and school children especially, learn about the debt program and draw lessons from it.
She said the series about martians is “very good because, in reality, it’s not them who are the martians, it’s we who have been the martians because we thought we could get ahead by following these kind of (debt) policies.”
In 2001 Argentina defaulted on around $100 billion in debt, setting off a massive financial and economic crisis.
Since then, and when measured as a percentage of its gross domestic product, Argentina has substantially reduced the amount of money it owes to other countries and its own people. It reduced that debt ratio largely by deciding not to pay back much of it’s debt, as well as by growing the size of it’s economy.
This decision not to pay its debt had both positive and negative consequences. On the upside Argentina now owes less money and can use its available funds to invest in infrastructure and healthcare, etc. On the downside, many people consider Argentina a pariah nation and refuse to lend it money or invest in it.
That has increased Argentina’s borrowing costs significantly. If Argentina needed to raise funds for something it would have to pay far higher interest rates than would its neighbors and most other countries.
Link: Argentina’s Debt Museum
It was 1996 and anything, in then-president Carlos Menem’s mind at least, seemed possible, including the idea of building a spaceship that could fly from Argentina to Japan in 1.5 hours. Wouldn’t that be nice?
Menem had conquered inflation and now he was ready to conquer outer space. Too bad it was never built. Sometimes it takes me more than 1.5 hours just to get from the microcentro to Ezeiza.
Oh well. “Aim high or dont’ aim at all,” my grandma used to say. Actually, that’s not true. She never said that. But Carlos Menem really did say this:
“Within a short period of time, we are going to call for bids to build a system of space flights that, through a platform which might be built in the province of Córdoba, those space ships will leave the atmosphere, will return to the stratosphere, and from there will choose where they want to go, so that within an hour and a half we will be able to go from Argentina to Japan, Korea or any part of the world.”
Two notable events dominated the news here this week.
One entails what appears to be an effort by Argentine President Cristina Fernandez to silence economists who question the government’s inflation data.
As I wrote here in the Wall Street Journal:
“Argentina’s government has fined more economists for challenging official inflation estimates in what lawyers call a violation of freedom of speech.
On Tuesday, the government fined consulting firm Econviews 500,000 pesos ($123,442). It fined the consultancy abeceb.com an equal amount Monday for allegedly publishing inflation estimates that “lack scientific rigor.”
“This isn’t about methodology or truth in advertising, as the government claims. It’s really about silencing dissident voices,” economist and former finance undersecretary Miguel Kiguel said in a phone interview Tuesday.
The government has imposed similar fines against Estudio Bein & Asociados, Finsoport, MyS Consultores, GRA Consultoras and former Indec official Graciela Bevacqua, who used to oversee Indec’s consumer price index. Several other firms said they expect to be fined soon.”
By now pretty much everyone in Argentina knows inflation is rampant. Economists say inflation hovers around 25%, give or take a few points.
But government officials have long denied this to be the case. Instead, they say, the country is experiencing “price dispersion.” Just a few months ago officials said inflation didn’t even exist.
Economy Minister Amado Boudou even went as far as saying that given Argentina’s macroeconmic situation, inflation “could not exist.” He said people should “walk around” to find good prices. (If you’re gonna walk around, try Belgrano. Its tree-lined streets and classic homes are delightful.)
Whatever the case, prices are up. Even the government says officially that prices are up 10% from a year ago.
In just about any other country, an inflation rate of 10% would raise red flags and cause politicians to panic over ways to curb rising prices. Moreover, government officials in those countries would use the word “inflation” to describe what was happening to prices. But Argentina has never been “any other country” and its idiosyncrasies are sometimes so frequent that they cease to surprise.
The other notable piece of news was a move by the government to gain control over the decisions made by companies in which it has stakes. As I noted in a another WSJ piece:
“Argentina’s government increased its sway over dozens of companies through a presidential decree on Wednesday, a move that will grant the administration a larger influence in some of the key sectors of the economy ahead of presidential elections in the fall.
The decree lifts limits on the government to unilaterally name board members and expands its influence over other corporate decisions. Until Wednesday, the government’s voting rights were capped at a 5% equity stake even if its actual ownership in a firm exceeded that level.
Pension agency Anses owns stakes in 42 local companies after the government nationalized the private pension system at the peak of the 2008-09 financial crisis.
When Congress debated the pension nationalization bill in 2008, opponents agreed to pass the bill only after assurances that the state’s influence over corporate decisions would be limited by the 5% rule. But the decree published in the Official Bulletin abolished that limit, greatly enhancing the government’s influence.”
So there you have it. A quick and dirty round up of this week’s top news.
Have a great weekend!
One of the great joys of living in an older, pedestrian-friendly city like Buenos Aires is the unexpected discovery of hidden gems.
I chanced upon one of these Sunday night while walking my little pug, Buki, around my neighborhood just north of the city. Technically speaking, I don’t even live in Buenos Aires. I live near the border between the neighborhoods of Olivos and La Lucila.
Just as in San Telmo or parts of Recoleta, some parts of these neighborhoods are defined by beautifully cobbled, tree-lined streets. It’s a delightful area to explore by foot.
While walking with Buki I came across this older movie theater, Cine York, which was showing Woody Allen’s latest movie, You Will Meet a Tall Dark Stranger.
The place looked incredibly cozy, quiet and romantic. I felt fortunate, happy to be out and about and happy to have such a lovely placed so close to my home.
The classy, inviting nature of this little theater couldn’t contrast more with the loud, plastic, cookie-cutter nature of modern shopping centers that have come to dominate the urban landscape of huge swaths of the U.S.