The Economic Reforms Of Argentina Essay

1809 WordsDec 9, 20168 Pages
In December 2015, Argentina’s newly elected “Cambiemos” party (Lets Change) announced it planned on lifting all restrictions on capital flows, allowing practically unlimited access to foreign currency in a process intended to push the peso’s value to float towards its true market value. The move to liberalize capital flows was a desperate attempt to increase exports and spur economic growth in an economy that has been battling low foreign reserves and double-digit inflation for the past several years. The free-market candidate, Mauricio Macri, was determined to restore investor confidence in Argentina, utterly destroyed by its 2002 record default, a lack of transparency in its economic institutions, and heavy state intervention. With the backing of big business, both domestic and foreign, Macri was able to mobilize a dissatisfied middle-class tired of the leftist protectionism of the past decade. The economic reforms came at a time of extreme political polarization and civil unrest in Argentina. The Peronist candidate, Daniel Scioli, lost by a very slim margin, leaving the opposition eager to utilize any economic setbacks as political ammunition. For many Argentines, Macri’s neoliberal plans sound awfully reminiscent of the disastrous policies implemented by Carlos Menem in the 1990s. Given the population’s low tolerance for austerity measures and a ferocious opposition watching every move, Macri’s must walk a tight line if he is to successfully tackle Argentina’s economic
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