Argentina — at one time among the most advanced countries on the American continent — might now be initiating a major comeback after decades of sustained decline. This is a country that has produced five Nobel Prize winners, and was the first Spanish-speaking country to have a truly modern mega-city like Buenos Aires and also the first to become involved in advanced technologies such as nuclear engineering, jet airplanes and genetic science. It has also produced cultural personalities such as Jorge Luis Borges, Luis Leloir, Cesar Milstein, Faustino Sarmiento, Lalo Schifrin, Daniel Barenboim, Julio Cortazar, Paloma Herrera and Pope Francis. Yet for many years, Argentina experienced severe economic stagnation. The great midcentury economist Simon Kuznets said that there are four kinds of countries: developed countries, underdeveloped countries, Japan — nobody knows why it grows — and Argentina — nobody knows why it doesn’t.
This stagnation, however, might have something to do with the fact that around the mid-20th century, Argentina endured an unstable series of alternate civilian and military regimes, which culminated in a major crisis at the start of the 21st century. For the past 12 years, Cristina Fernandez de Kirchner has aligned Argentina with the neopopulist axis in Latin America, together with Venezuela, Ecuador and Bolivia. The result of her leadership can be summarized by some key facts. Argentina has now the third highest inflation rate in world, 30 percent a year after Venezuela (60 percent) and Sudan (36 percent). Its economy hasn’t grown for the last four years, the government has almost doubled its levels of public employment and around 25 percent of the population is poor. The country has fostered a pernicious economic climate and exhausted its national savings.
But Argentina seems to have learned its lesson after such an extreme experience. Kirchner’s reckless fiscal policies might end up creating new opportunities for both the country and the region.
Last month something extraordinary happened: The Republican Proposal, or PRO, a new center-right party led by Mauricio Macri, put together a coalition and managed to win national elections in Argentina, unseating Kirchner’s entrenched populist regime. During his tenure as mayor of Buenos Aires, Macri spectacularly modernized the Argentinean capital, an achievement that gave him significant political capital in his campaign against Kirchner.
Why is it important to pay attention to this change? As the second largest economy in the South America and a member of the G-20, Argentina has shown with its recent elections that it is tired of populism at the expense of democracy and prosperity. Argentina might now be facing a significant resurgence and also inspire a continental shift away from misguided and myopic populism, serving as a model for other Latin-American nations. Yale students in particular should care about this possibility. Many of you will pursue careers in international relations that will require an understanding of South America’s complex economic and political dynamics. Given Argentina’s new path, the South American continent will likely prove an increasing source of economic development and business opportunities as well.
If this prediction is accurate, it suggests a newfound political maturity has taken hold of Argentina’s population. Now, after 30 years of sociopolitical and economic gridlock, Argentina is voting for a plan that will open the country’s economy, restore competitive markets and streamline governance. In contrast to the growing geopolitical crisis in the Middle East, Africa and now continental Europe, South America may be on the cusp of a cosmopolitan renaissance. Pay attention to this promising change. Let’s build a new paradigm for the whole American continent.
Pablo Bereciartua is a 2015 Yale World Fellow. Contact him at email@example.com.