What Went Wrong in Argentina? Remarks, Center for Strategic & International Studies Conference “Argentina: Weighing the Options”
It is a pleasure for me to be participating for the first time as President of the Center for Global Development at a sister think tank here in Washington, the Center for Strategic and International Studies. In his opening remarks, Ambassador Diego Guelar (of Argentina to the White House) said it well: “The roots of Argentina's crisis go deep.” My message is fundamentally the same. The crisis in Argentina is rooted in the longstanding problems of political chicanery and social injustice, combined with truly bad luck in the last several years. It is not due to technical economic errors, and will not be resolved by economic fixes alone.
Let me set out what I mean by discussing five problems. I'll begin with the exchange rate, but only to emphasize it was not an economic straitjacket in itself as much as a symptom of Argentina's political straitjacket. The other problems are mediocre fiscal management throughout the 1990s, and three “bads”: bad politics, bad parenting, and bad luck.
