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Why Lying Is Often Easier in Argentina

President Mauricio Macri fights his predecessor’s legacy – and an older, perhaps more difficult foe.
Macri
Sandra Hernandez-gv/GCBA. (flickr) October 6, 2015

At a dinner party in Washington seven years ago, a well-known Argentine diplomat was doing what diplomats do – defending his government over rubber chicken and white wine. But this night was quite unusual, because the diplomat was openly and unapologetically defending a lie.

Back then, the lie was still fairly new, and the world was still struggling to understand it. Shortly after President Cristina Fernández took office in 2007, the Argentine statistics institute, INDEC, began publishing falsified data – claiming inflation was only about half as bad as the reality. The diplomat was trying to convince us that, because of Argentina’s unique history of hyperinflation and economic turmoil, it was justifiable to withhold the truth to avoid alarming the general public until Fernández’s government could sufficiently address the problem.

“If Argentine housewives hear that inflation is above 10 percent, they become hysterical,” the diplomat said. “And really, what’s the difference between 10 percent and 19 percent?”

Over the years I’ve learned, at considerable personal cost, to bite my tongue on occasion. This was not one of those times.

“Well,” I replied, “I think the difference is about 9 percent.”

A long silence. I think a fork or two clinked. And then, finally, the diplomat launched into an extended monologue about how in this world there are small lies and big lies, and what about Iraq, and what about sub-prime mortgages, and didn’t those lies kill thousands of people and ruin millions of lives, and so how could somebody in Washington judge Argentina? This was July 2009, the Great Recession was on, these were in fact difficult issues, so… this time, I bit my tongue. The dinner ended peacefully, the diplomat got a big promotion not long thereafter, and Argentina would continue to lie about economic data for another six years.

I’ve thought of that night often lately as Fernández’s successor, President Mauricio Macri, tries to bring truth and transparency back to Argentina’s economic data – and its economy in general. Since taking office in December 2015, Macri has become something of a hero abroad by lifting currency controls, paying off holdout creditors from Argentina’s long-ago default and spearheading a shift away from the leftism that dominated Latin America over the past decade. On Wall Street in particular, Macri is revered. At home, it’s a more complex story. While he remains fairly popular by global standards with an approval rating of 44 percent, that is down from earlier this year, and on Thursday night Macri suffered the first major “cacerolazo” protest of his young administration. Even some of his biggest fans are growing worried because the economy has not yet revived under his watch.

Macri and his economic team always knew the turnaround would take time. Fernández left behind not just flawed data, but a web of unsustainable subsidies and abysmally low levels of private and public investment. This was consistent with other recent end-stage governments in Latin America which, when faced with a reality they didn’t like, attempted to disguise reality itself. In Brazil, when President Dilma Rousseff’s policies resulted in ever-larger budget deficits, her government began fudging the numbers – an infraction that (along with other sins) culminated in her impeachment in May. Venezuela’s regime has lied about economic growth, inflation, public health crises and seemingly everything else, contributing to a hellish spiral that continues to plumb new depths.

The unfortunate thing for Macri is that, unlike Brazil and Venezuela, Argentina’s economy never had the “benefit” of bottoming out under Fernández. Through currency controls, subsidies and some old-fashioned good timing, Fernández was able to hold things together long enough to avoid an outright debacle. Meanwhile, Macri campaigned on assurances that, after some initial sacrifice and pain, the economy would start to improve by the second half of 2016. So, as this year began, 60 percent of Argentines believed the economy would soon turn around, making them one of the 10 most optimistic nations in the world, according to one poll. The net result was inflated expectations – and, now, considerable anger that the promised bounty has yet to arrive. That’s different from Brazil, where the economy got so awful under Rousseff, and new interim President Michel Temer promised so little, that nobody really expected much of anything.

Finally, Macri is facing another, more unique obstacle – the enduring popular belief that Argentina is a rich country. The history of the last 80 years strongly suggests otherwise, of course. But this belief is still held by a large swathe of the population, and it means that any leader who fails to bring prosperity is quickly labeled incompetent, a crook, a tool of foreign interests, or all of the above. Macri is a long way from being consigned to such ignominy, and his supporters still strongly believe in him. But the memory of glorious wealth, and the conviction that everyone deserves a fair share of it, is one reason why austerity has always been harder in Argentina than in most other countries. It also explains why some governments find it easier to lie about the more sobering reality, and leave somebody else to clean up the mess.

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Winter is the editor-in-chief of Americas Quarterly and the author of four books about Latin America. He lived in Buenos Aires from 2000 to 2004

ABOUT THE AUTHOR

Brian Winter is editor-in-chief of Americas Quarterly and the vice president for policy at Americas Society/Council of the Americas. A best-selling author, analyst and speaker, Brian has been living and breathing Latin American politics for the past 20 years.

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