Yesterday, Argentina elected a new president, Mauricio Macri. It will be a switch not only of personalities from the current president Kirchner but a major shift in political philosophy as well. Argentina is going to change from a state controlled economy to more of a free market one. Only time will tell how successful Macri is in restoring market forces into Argentina. His party does not have total control of the Argentine congress, so there will undoubtedly be battles on the changes. One thing is certain, however, the price and currency controls that were the hallmark of the Kirchner era are ending.
Argentina is a country that ought to be wealthy, but which somehow was never able to make it. Seventy years ago, Argentina had the eighth largest economy in the world even though it had only a small population. Then came the election of Juan Peron and the emergence of the Peronist movement. Instead of allowing market forces to dictate the development of the economy, Peron opted for state controls that pushed development into heavy industry like steel mills, etc. Argentina could not compete and the decline of the economy began. Over the years since then, there have been periodic bouts of socialism in Buenos Aires that have destroyed growth and promoted decline. In between the socialist periods, there have been military coups that replaced a socialist government that promoted stagnation with a military dictatorship that bordered on fascist. The election of Macri is the first popularly elected free market government in a long, long time. It will no doubt be painful for Argentina to make the switch towards a free market system. Nevertheless, if the country sticks with the move, its abundance of natural resources will soon push the economy forward in rapid fashion and bring a general increase in well being for the people.
The selection of Macri is also some good news for the USA. Kirchner was a close friend of the anti-American governments in Venezuela and Iran. Macri says he will not continue that policy.
Congratulations to Argentina.
Argentina is a country that ought to be wealthy, but which somehow was never able to make it. Seventy years ago, Argentina had the eighth largest economy in the world even though it had only a small population. Then came the election of Juan Peron and the emergence of the Peronist movement. Instead of allowing market forces to dictate the development of the economy, Peron opted for state controls that pushed development into heavy industry like steel mills, etc. Argentina could not compete and the decline of the economy began. Over the years since then, there have been periodic bouts of socialism in Buenos Aires that have destroyed growth and promoted decline. In between the socialist periods, there have been military coups that replaced a socialist government that promoted stagnation with a military dictatorship that bordered on fascist. The election of Macri is the first popularly elected free market government in a long, long time. It will no doubt be painful for Argentina to make the switch towards a free market system. Nevertheless, if the country sticks with the move, its abundance of natural resources will soon push the economy forward in rapid fashion and bring a general increase in well being for the people.
The selection of Macri is also some good news for the USA. Kirchner was a close friend of the anti-American governments in Venezuela and Iran. Macri says he will not continue that policy.
Congratulations to Argentina.
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