Saturday, December 12, 2015

Go, Macri!

He is President Mauricio Macri of Argentina now. Who would have believed that just 90 days ago?  The pollsters didn’t but the people had other ideas.
President Macri must start by blowing up two things holding back Argentina.
First, crony capitalism or the corrupt relationship between big business, public sector unions, and the politicians who carry their water. Sadly, this is the ditch that most of the Latin American democracies have fallen into. It works well for a few but it holds back entrepreneurs and the middle class.
Second, liberate Argentina from the lawless populism of the Kirchner era.
The first one will be more difficult because there are interests that will fight back. The second one is a bit easier.
He can start by reading this interview with James Roberts of the Heritage Foundation:
What challenges lie ahead for Argentina, after 12 years of populism? How long will it take to achieve success?
I don’t think it will happen overnight. It will have to be done with hard work, and incrementally, so as not to make the situation worse. It will have to be done carefully and delicately.
My impression is that Macri is going to handle it. You have to restore confidence, improve relationships with other countries in the region and in the world, and solve the external debt problem.
Do you think Argentina should pay the so-called vulture funds?
Argentina has to settle all of its debts according to international rules and what it understood when they borrowed the money. There are rules that govern the whole world; if there were no rules, there would be chaos, and there would not be any money available for people to borrow.
It is not a question of singling out Argentina. If there were hedge funds that took advantage of buying cheap debt, and are insisting on being paid, that is also within the rules. That is what that federal judge in New York has been saying.
If you start to make exceptions and apply the tactics of victimization, then there’s populism and there’s a Pandora’s box. It means that the whole system could become paralyzed.
What would be your advice for President Macri?
Macri should restore confidence in the rule of law, and he should take steps very soon to solve the foreign-debt problems. It seems to me that the appointment of the young economist [Martin Lousteau] as ambassador to the United States is a good thing, because he was [once] the Economy minister.
He should improve relations with the United States and restore the Central Bank’s independence. The Central Bank should not be used to buy votes or political favors.
Is Macri’s victory the beginning of the end of populism in Latin America?
I don’t know if it’s so much of a question of a push or a new influence as it is a reflection of a change in attitude in the region.
People are disillusioned with the empty, false promises of populism. 
Yes, people are disillusioned with the promises of populism. Incompetence and corruption have been the product of these policies. 
So President Macri has a chance to save Argentina and start a new movement in South America. We wish him the best. We know that there are a lot of “interests” out to stop him, specially the well organized and loud left.
Our advice to President Macri is to look forward because most of the people in Argentina know that “populismo” did not work.    
He will succeed by being decisive.  
P.S. You can listen to my show (Canto Talk) and follow me on Twitter.

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