An Argentine Situation  

Situation

A Wealthy Country In Serious Decline

There is a path to stabilisation, and the recovery of the economy, but it’s a rocky path.

Sixty years ago Argentina was one of the richest countries in the world, they had abundant natural resources, a diversified economy, a well-educated urban population, and a strong industrial base. However, over the past fifty years, Argentina has declined from being a wealthy country to one facing perpetual economic instability. The 70s were marked by periods of inflation, fiscal deficits, and political instability, and saw the rise of authoritarian military regimes that implemented policies that eventually led to economic mismanagement and mass social unrest.

In the 80s we saw attempts at economic stabilisation, the implementation of neoliberal policies, currency pegs, and the privatisation of state-owned enterprises. While these measures brought stability and growth, they also led to increased foreign debt, currency crises, and social inequality. The economic liberalisation policies of the 90s pegging the Argentine peso to the US dollar ultimately proved unsustainable.

In the 00s we saw a period of political and economic turbulence in Argentina, sparked by the collapse of the Convertibility Plan, which triggered a severe economic crisis causing extreme currency devaluation, bank runs, and social unrest, resulting in widespread poverty, mass unemployment, economic decline and social upheaval. Since then, Argentina has grappled with a cycle of economic booms and busts, characterised by periods of growth followed by currency crises, inflation, defaulting on foreign debt burdens, and recession. 

Despite efforts to address structural issues and implement reforms, Argentina continues to face significant economic and social disparities, making sustainable development and long-term stability elusive goals. Against this backdrop a disillusioned electorate recently elected a new President, Javier Milei, a right-wing libertarian who has promised “painful shock therapy”, and to "take a chainsaw to the government" in order to address the country's economic challenges, meanwhile inflation is at 143%, national poverty levels are at 40%, and the country owes hundreds of billions to its creditors.

There is a path to stabilisation, and the recovery of the Argentine economy, but it’s a rocky path, and we believe that Milei desperately needs our help.