Argentina’s government is having a terrible week.
The bad week started when the nation was censured by the International Monetary Fund (IMF) on February 1 for cooking the statistical books and underreporting the rampant inflation devouring Argentineans’ and foreign investors’ money—to the tune of $6.8 billion. Unless the nation cleans up its reporting practices by November this year, the IMF could revoke voting rights and access to funds.
Next, Argentina’s foreign minister Hector Timerman caused an international scene when he refused to talk to a Falkland Islands MLA Dick Sawle in the lobby of the Houses of Parliament. The public snubbing came after Argentina walked away from talks with the United Kingdom over the Falklands referendum on whether or not the islanders wish to continue to be a British Overseas Territory.
The line of officials in Buenos Aires on the Falklands? “We have to respect the interests of the people living in the area but not the wishes,” said Timerman.
With leadership like Timerman’s, it’s not surprising that Argentina currently ranks 160th in the 2013 Index of Economic Freedom, compiled by The Heritage Foundation and The Wall Street Journal.
Now, the third-largest Latin American nation is trying to avoid respecting either the “interests” or wishes of its creditors. Ahead of a U.S. Appeals court ruling on whether or not the nation will have to pay $1.3 billion it owes in defaulted debt to a private investment fund, The Financial Times reports Argentina is trying to propose yet another debt swap to avoid paying back mountains of debt.
Since President Cristina Fernández de Kirchner took power, “respect for markets and the rule of law has deteriorated and corruption has boomed,” notes the Index. Indeed, Argentinean economists who differ from the official and fraudulent inflation statistics face firing, fines, or even potential jail time.
But instead of fixing the false numbers and the estimated 25 percent inflation rate, the government merely leaned on supermarket chains to implement price controls amid public outcry.
From establishing what Heritage experts have deemed a “non-truth commission” to investigate Iranian-sponsored terrorism in the country, to resorting to only charting private jets when the president travels abroad to avoid her state-owned plane being seized by defrauded creditors, Kirchner has pursued counterproductive and harmful policies for her nation.
It’s time for Argentina to reverse course on the failed Peronist policies that have undermined freedom and the rule of law, or face even more international pressure in the weeks to come.