Tuesday, June 23, 2015

Argentina, y'all

We got our first visit from Argentina over the weekend, so I wanted to do a little bit to welcome Argentina to the Eff You family. We'll start with the basics:
Argentina, officially the Argentine Republic, is a federal republic located in southeastern South America. Sharing the Southern Cone with its smaller neighbour Chile, it is bordered by Bolivia and Paraguay to the north; Brazil to the northeast; Uruguay and theSouth Atlantic Ocean to the east; Chile to the west and the Drake Passage to the south.
With a mainland area of 2,780,400 km2 (1,073,500 sq mi),[B] Argentina is the eighth-largest country in the world, the second-largest in Latin America, and the largestSpanish-speaking one. Argentina claims sovereignty over part of Antarctica, the Falkland Islands, South Georgia and the South Sandwich Islands.
It is worth noting, of course, that Argentina's claims over the Falklands, South Georgia and South Sandwich Islands are, to say the least, disputed by Great Britain, whose subjects actually occupy those islands and pretty much always have. But I digress.

Argentina was one of the world's top 10 economies early in the 20th Century, and was a top 25 economy into the 1940s. A period of political instability starting in the 1930s was largely responsible for the drop, but the country's real decline began following the election as president of Juan Peron in 1946. Peron, a fervent supporter of Nazi Germany during World War II, nationalized industries and basically put the "Socialist" back in "National Socialist." Dramatic overspending by the government (sound familiar?) damaged the economy, and while Argentina has gone through periods where it rejected Peronist socialism, it has never been far from power. The current regime is led by second-term President Cristina Elisabet Fern├índez de Kirchner, who carries on the socialist policies of her predecessor as president, her late husband, Nestor Kirchner. Her tenure has not been good for Argentina's long-term prospects, economically:
The government expanded state intervention in the economy throughout 2012. In May 2012 the Congress approved the nationalization of the oil company YPF from Spain's Repsol. The government expanded formal and informal measures to restrict imports during the year, including a requirement for pre-registration and pre-approval of all imports. In July 2012 the government also further tightened currency controls in an effort to bolster foreign reserves and stem capital flight. In October 2013, the government settled long-standing international arbitral disputes dating back to before and following the 2001 Argentine financial crisis. During 2014, the government continued with expansionary fiscal and monetary policies and foreign exchange and imports controls. Between 2011 and 2013, Central Bank foreign reserves had dropped $21.3 billion from a high of $52.7 billion. In July 2014, Argentina and China agreed on an $11 billion currency swap; the Argentine Central Bank has received the equivalent of $3.2 billion in Chinese yuan, which it counts as international reserves.
In 2014, the government also took some measures to mend ties with the international financial community, including engaging with the IMF to improve its economic data reporting, reaching a compensation agreement with Repsol for the expropriation of YPF, and agreeing to pay $ 9.7 billion in arrears to the Paris Club over five years, including $606 million owed to the United States. In July 2014, Argentina made its first payment to Paris Club creditors since the country’s 2001 financial crisis. At the same time, the Argentine government in July 2014 entered a technical default on its external debt after it failed to reach an agreement with holdout creditors in the US. The government’s delay in reaching a settlement and the continuation of interventionist and populist policies are contributing to high inflation and a prolonged recession, according to private analysts.
Yeah, Wikipedia doesn't mention that shit, since the site hates to acknowledge the failure of socialism. But hey. What's at little debt default among friends? And some high inflation and prolonged recession? Shit, bad things happen to good people, right?

Anyway, welcome to Eff You nation, Argentina. You might want to consider a new economic course, but keep visiting, regardless, and bring your friends.

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