Cornelius Fleischhaker, whose IMF credentials put him in a privileged seat to see all the shenanigans in the organization’s fraught relationship with Argentina, wrote an excellent piece this week on the tortured IMF-Kirchner love story.
The reason why Cornelius’s analysis is so spot on is that it incorporates the domestic political calculus necessary for any policies to work in Argentina. For many observers in the United States and Europe, the measures taken by the current government, including the recent supermarket price freezes, and more longstanding restrictions on taking currency in and out of the country, seem draconian and self-destructive at best. But in Argentina, with the combination of rapid economic growth under an
unorthodox “heterodox” model, stinging memories from the 2001 financial collapse, and a high public tolerance for creative finance, rational limits don’t always apply.
Beyond that, it is easy to forget that economic tomfoolery and democratic legitimacy in a country like Argentina often go hand in hand. When a public has unrealistic expectations of what the state can provide for them, a government that enables those views in order to be elected, and an opposition that only reinforces those views through capital flight and subversive behavior, it’s easy to see how Cristina Fernandez can still be popular.
In the court of public opinion, Argentines have been asking one simple question since their first tiff with the IMF in 1986: what have you done for me lately?