Argentina went from an IMF poster child in the mid-nineties to an outlaw country in 2002, when it made the decision to default on its debt. The country eventually settled with most of its creditors, paying about 30 cents on the dollar. While nearly all mainstream economists predicted economic disaster, its economy bounced back quickly from a sharp downturn at the start of 2002 and has been growing at close to an 8 percent annual rate ever since (approximately 7 percent per capita). Reporting on Argentina has largely reflected the sentiments of the IMF. In an article on the presidential race in Argentina, the NYT reports that the leading candidate, Cristina Kirchner (the current president's wife) has been focusing on international affairs and ignoring "mounting problems in Argentina." The article then lists the mounting problems: "energy shortfalls, a shrinking budget surplus and a ballooning inflation rate that several independent economists say is now over 15 percent." Well, energy shortfalls (a result of extraordinarily rapid growth over the last five years) and rising inflation are real problems, but "a shrinking budget surplus?" I'm sure there are many politicians in the United States who would like this mounting problem. The article also includes a misleading swipe at the current president, Nestor Kirchner, saying that he was elected with just 22 percent of the vote. Argentina has a system of run-off voting in which there is a second round of voting between the top two candidates if no one gets a majority in the first round. In a wide field of candidates, Kirchner won 22 percent of the vote in the first round. There was no second round because the runner-up pulled out of the race when it became clear that he would lose in a landslide.
--Dean Baker
