A glass of respite for Argentina

Last Sunday, euphoria broke out in the neighboring country after its team won the 2022 World Cup. And last Tuesday, millions of people in Buenos Aires celebrated the arrival of their heroes in a chaotic reception.

Personally, I was an incidental witness to the previous celebration in the Argentine capital on Tuesday the 13th when the River Plate team beat Croatia and sparked a celebration that was one of the most recent epiphanies.

But it was not the only occasion. When I was a teenager and lived for two years in Salta for family reasons, I enthusiastically celebrated the 1986 World Cup, where Diego Maradona’s leadership shone.

Professionally, I must mention that an important similarity between the second and third cup has been the macroeconomic instability in the sister country. In the month of the 1986 World Cup, inflation in 12 months was 50%, while in November of this year it was 92%.

These data show that the current situation is more delicate. The same thing happens with the exchange rate, which has also had two quotations: the official and the parallel one. Both in the eighties and currently, the percentage difference between the official and parallel exchange rates is more than 40% with respect to the latter.

In both cases, the worldwide victory in mass sport has been a palliative to temporarily forget about the bad economic situation. An achievement that, in addition to being deserved for the quality of football, alleviates the anguish of a town that has endured constant periods of crisis.

But, the Argentine decline is not recent.

At first it was impacted by the effects of protectionism worldwide after the Great Depression of 1929. Argentina’s main export markets were “closed” and the neighboring country saw its only option to face the moment in its domestic market.

The continuity of these protectionist and populist policies in Argentina, with excessive and inadequate regulations and with a disproportionate emphasis on import substitution, resulted in a gradual loss of productivity compared to its peers.

It was the best breeding ground for governments of various tendencies to promote incorrect policies, but easily applauded, and dictatorships arise where human rights were violated.

The results: 125 years ago, Argentina had a per capita income level similar to that of several European countries; while today its most relevant glory is soccer.

Buenos Aires is, to say the least, a majestic city. The grandeur of its buildings and its public spaces reveals that past of splendor and great wealth.

But, as the economic historian Alan Taylor said in 1992, “The satisfaction of living in one of the richest countries in the world today is nothing more than a distant memory for Argentines.”

For this reason, my visit to Argentina brought me mixed feelings. Just as I remembered the 1986 celebration, I also recalled the imbalances that inflation and a parallel exchange market imply: a USD100 bill is equivalent to 31 thousand-peso bills, which is the highest cut in the country. And I was able to talk with various citizens who expressed their concern about the current economic situation.

Argentina deserves more than a drink. It requires correct politicians with good policies, beyond their legitimate ideological differences. The cup brought more than joy to 47 million inhabitants: it brought hope for better days and the conviction that unity and good leadership can generate feats.

Paraphrasing various international media, the Lionel team (Scaloni, the technical director and Messi, their best player) gave an important lesson in leadership, which hopefully will be extrapolated in other fields, especially economics.

In the Bolivian case, let us emulate the keys to its soccer greatness and avoid engaging in inappropriate policies that ultimately affect the most vulnerable the most.