The Corner

Argentina’s Shameful Government Ought to Be Ostracized

At the height of Argentina’s bond default ten years ago (a fancy way to describe what was really a con-job of global proportions), Uruguayan president Jorge Batlle caused a major diplomatic incident when he said, “The Argentines are a mob of thieves, from the first to the last.” He was duly forced to travel to Buenos Aires to apologize, and the crisis eventually blew over.

But the Argentine government’s shameless pattern of lying and stealing only got worse. In February, The Economist devoted an entire article to announcing that it would no longer publish Argentina’s official inflation statistics, and not just because “almost nobody believes” them:

In an extraordinary abuse of power by a democratic government, independent economists have been forced to stop publishing their own estimates of inflation by fines and threats of prosecution. Misreported prices have cheated holders of inflation-linked bonds out of billions of dollars.

That’s just one relatively minor example. Argentina’s government has become a massive racketeering operation. The list of international swindles the government has committed entirely openly is nauseating. The Obama administration recently suspended Argentina’s privileged developing-nation status because of its refusal to pay any arbitral awards owed to U.S. companies. That was hot on the heels of Argentina’s nationalizing a Spanish-controlled oil company and then laughing publicly at the Spaniards’ claimed valuation — another brazen swindle. 

Now, the recently defeated Senator Richard Lugar (never one to cry over spilt milk) is calling for the Obama administration to suspend Argentina from the G-20:

Argentina has failed to respect the property and rights of U.S. and other foreign investors. It has failed to respect judgments against it by U.S. courts and international arbitral tribunals, refused standard IMF inspections, and expropriated property from investors. As long as this “outlaw behavior” continues, Argentina does not deserve membership in the G-20. . . .

The G-20 is for nations that respect the rule of law, and Argentina clearly has not. As a nation that mocks the law and declines to respect the property and interests of foreign investors, Argentina should not have a world leadership role in the G-20. Argentina’s behavior is unique in the world today. Unlike countries facing genuine challenges, Argentina has a productive economy and over $45 billion in reserves. It could easily live by the rules and pay its bills — but the current government chooses otherwise.

That’s a refreshingly strong statement, especially from Senator Lugar, a paragon of measured and dignified statesmanship. Hopefully the administration will act and follow up with more. If we don’t punish Argentina now, we will have only ourselves to blame when other countries start following Argentina’s lead. 

Earlier this year, the former Uruguayan president was walking in Buenos Aires when he was stopped by a young Argentine in the street. “Look,” said the man, “you know what? You were right.” That story is not surprising; when the scandal over the president’s comments broke, I called a good Argentine friend of mine and asked him whether most Argentines even disagreed with Batlle’s description.  “Ché Marito,” he said cheerfully, “of course we think we’re a bunch of thieves and liars. What makes us mad is that a Uruguayan would say so.”

The merry-scoundrel motif is charming among friends. But coming from a government that steals openly from American taxpayers, it is totally unacceptable.  

Mario Loyola is a senior fellow at the Competitive Enterprise Institute, the director of the Environmental Finance and Risk Management Program of Florida International University, and a visiting fellow at the National Security Institute of George Mason University. The opinions expressed in this column are his alone.


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