A new time for Argentina
Argentina is producing strong changes.
A new federal administration led by President Mauricio Macri started last December a new economic, institutional and international policy program.
It could be said that the new administration is turning from populism towards a more rational economic environment. The country is moving from unsustainable fiscal policies, overregulated economy, conflicts with most of the principal countries the world; towards a new environment implementing much more rational public policies.
When the new administration defined its main priorities, this definition included reforms like reducing fiscal deficit, dropping inflation, eliminating export taxes, establishing free currency access, recovering an autonomous central bank, eliminating import restrictions and foreign currency restrictions. And the new administration has a goal: to improve private and public investments. In that field, there are strategic challenges: to improve investment rates, to get a new infrastructure plan, to increase the private sector relevance.
In terms of the international policy, the new administration is leaving the old policy (implemented by the previous administration managed by Cristina Fernandez de Kirchner) that developed associations with Venezuela, Iran or Russia; and is now already focused on links to the EU, USA, China, Brazil, Chile or Mexico.
The new administration is normalizing relationships and solving international conflicts and Argentina is now also
part of the international leaders’ agenda.
The main goals in this field are to improve the Mercosur (the commercial agreement between Argentina, Brazil, Paraguay, Uruguay and Venezuela), to activate a trade agreement between Mercosur and the European Union, and to propose an agreement between Argentina, or even Mercosur, with the Pacific Alliance (formed by Chile, Peru, Colombia and México).
Meanwhile, this new moment in Argentina is based in a new political consensus in terms of the institutional environment. Independent judiciary operation, federalism, autonomous Congress, free press, and fully respected political rights, are all parts of the agenda that is shared by different parties.
Projects to reform the electoral system, or a consensus for new Supreme Court members are consequences of it. In last months, political agreements in Congress to solve different problems (including the old defaulted foreign public debt) are effects of the new situation: there is not a party with a majority in Congress and this circumstance requires more rational discussions. And additionally, a new generation of politicians wants to focus actions in results.
That is why the new political environment is showing -for the first time in many years- movements from populism to rationalism through democracy, and without suffering a big crisis.
President Mauricio Macri is a new leader from a new party for the first time in 50 years, but it is also true that this moment is showing actions to build a new consensus. Argentina is enjoying many not previously experienced situations like a governmental alliance formed by three parties in charge of the administration, or a Congress with no majority party, and the fact that at the provincial level there are governors from 6 different parties. It is a new political time.
Of course, Argentina faces strong challenges: inflation, fiscal deficit, low investment rates, economic inefficiency, problems in energy supply, old infrastructure and poor government services are the most relevant.
But there are also big strengths like the competitiveness in agro based industries and natural resources, the strong automobile industry, and the capacity to produce chemicals, manufactured metals or services.
Argentina i an international based economy (2/3 of the biggest 500 companies are foreign), has well educated human resources, and is the 8th largest country in the world in terms of its territory.
And now, the country has the possibility of start leading a new Latin-American political trend.
Professor at Business School Technological Institute of Buenos Aires (ITBA)
Expert on International Business Development
Director DGI Consultora, Buenos Aires
MBA, CEPADE, Spain,
Law, University of Buenos Aires
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