Argentina's Investors Cry No More, but at what Price?

Argentina has always been marked by two political trends that have been eventful enough to attract the attention of foreign investors and playwrights alike. Regarding investment, Argentina has always been a special case because of the large amount of potential in its economy that often seems to end in varying degrees of chaos as opposed to bringing the country on to another well deserved economic level. The second trend has always been that of having power couples in the Presidency during times of economic upheaval, without a doubt an interesting dynamic, but in recent history likely not exciting enough to be put on Broadway. As Nestor Kirchner's popular term in office was finally concluded by the election of his wife, Cristina Fernandez de Kirchner, the beginning of a Presidency which is entangled in the result of years of populist policies and less than ideal economic planning began and has been taking a toll on the popularity and support of President Cristina. Cristina has not been adopted as the next Evita by any means, but likely has a few strong words for her husband regarding the current predicament. Publicly she has made other moves to slow the decline in growth from 8% to 5% and again place Argentina on the world stage for investment and commerce.

In a Sept 4th Economist.com article on Cristina Kirchner's national financial problems, the issues surrounding Argentina's new economic troubles were discussed targeting the recent decision to pay back much of the loans from the country's financial crisis from 2001-2002. The targets of the repayments are the Paris Club nations, especially Japan and Germany who have taken a loss on their loans to Argentina since 2002. Cristina hopes that the repayment of loans will secure future investment in Argentina and allow for enough financial security for lenders, creditors and export financing agencies to reinvest in Argentina's economy and national infrastructure without fear of losing their funds in another economic collapse. Despite much blame towards the IMF and international lending institutions during her husband's term in office, Cristina has had to assume the obligation of dealing with those same creditors in order to move the country to the next economic level and avoid taking 15% interest on loans from countries such as Venezuela who has mastered losing investment in all but one of its industries in the last decade. As the Economist argues, this move could have avoided a lump sum payment, and have been done earlier and over time, but is a positive step for investor interests in Argentina, albeit a small one as other debts still remain unpaid in the larger scheme of Argentina's ever present repayment obligations. An added effect could be the eventual loss of the Presidency by Cristina due to an ever increasing loss of popularity and an inability to claim financial problems on poor IMF policies after taking repayment advice from them in the end of the debate. While Cristina Kirchner has achieved alot in her political career and may end her Presidency with a mere lack of popularity and avoid a legacy of corruption and scandal as many past Presidents have not done in the past, it is unlikely that an end of economic troubles in Argentina will alter the trends of the past to any great degree or make Cristina the next Evita and Broadway star.