The death of Argentina’s former president is a sad loss. His bold defiance of the IMF paved the way for South America’s progress
By Mark Weisbrot
Published by The Guardian Unlimited (UK) on October 27, 2010.
The sudden death of Néstor Kirchner today is a great loss not only to Argentina but to the region and the world. Kirchner took office as president in May 2003, when Argentina was in the initial stages of its recovery from a terrible recession. His role in rescuing Argentina’s economy is comparable to that of Franklin D. Roosevelt in the Great Depression of the United States. Like Roosevelt, Kirchner had to stand up not only to powerful moneyed interests but also to most of the economics profession, which was insisting that his policies would lead to disaster. They proved wrong, and Kirchner was right.
Argentina’s recession from 1998-2002 was indeed comparable to the U.S. Great Depression in terms of unemployment, which peaked at more than 21 percent, and lost output (about 20 percent of GDP). The majority of Argentines, who had until then enjoyed living standards among the highest in Latin America, were pushed below the poverty line. In December of 2002 and January 2003, the country underwent a massive devaluation, a world-historical record sovereign default on $95 billion of debt, and a collapse of the financial system.
Although some of the heterodox policies that ultimately ensured Argentina’s rapid recovery were begun in the year before Kirchner took office, he had to follow them through some tough challenges to make Argentina the fastest growing economy in the region.
