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Argentina is on the Verge of Collapse! (Or so I read online)

By | [email protected] | February 8, 2014 8:23pm


The fact that Argentina is the country with the highest rate of psychoanalysts per capita has never made better sense.

This country lives in state of constant identity crisis. One day, we are all proud descendants of European immigrants. The next, we are all proud South Americans who embrace the concept of the Pachamama and join the Latin American brotherhood.

We secretly look up to the North, but admit that South-South ties will save our economy. We love the U.S. We hate the U.S. We are a country of agricultural exporters, but also an emerging industrial economy. We crave dollars, but dollars are evil.


Politically and economically-speaking, this translates into massive meltdowns that – while seemingly preventable – send us into periodic fits of rage. So, in a country where the economy dives into a massive crisis roughly every ten years, the population  turns to the dollar  faster than a troubled patient turns to Zanax.

To the outside observer, Argentina looks like the neurotic distant cousin who will always be in therapy, but will never make real progress.

But since one man’s loss is another man’s gain, whenever a new crisis strikes the country, the press, both national and international, starts sharpening their knives. In their eyes, Argentina has become so predictable that journalists – especially the international media – aren’t even trying anymore.

Don’t get me wrong, the drama queen in me wants to join them wholeheartedly. Argentina is undergoing a relatively manageable situation in relation to a lack of foreign currency (that is, in terms of the problems affecting most emerging countries, but more on that later) but is turning it into a Montague-Capulet-style feud between the alleged conspirators (multinational companies, the political opposition, the media and probably you) and a “well-intentioned and naïve” administration that is trying to stay afloat amid an ocean of sadistic enemies.

But before you panic, let me be clear: this is not 2001. That’s right, you heard me well.

We’re not even close to the catastrophic reality of 2001. 

Sadly, that’s not what the international media wants to hear. So, since I’ve already used this column to criticize the federal government in the past, allow me to play devil’s advocate and change my tune. This time, I want to slap the messenger.

I’ve never been a huge fan of psychoanalysis, but I understand that there is a lot of “let’s put some of the blame on what your parents did to you in your childhood” involved. I’d normally say that Argentine politicians are the poster child for putting the blame on others, but this time a large percentage of the foreign press has diagnosed Argentina with “impending doom” without any regard for contextualization. 

Renowned media outlets such as The Economist, The New York Times, O Globo and Reuters have analyzed the ongoing emerging-markets currency crisis and its impact on the plummeting value of currency in developing countries. Considering the fact that the revelation of slower growth in China was followed by Obama stating that China is, once again, the best place we can invest our dollars, it is no secret which markets U.S. dollars and foreign investment are heading.  

To the foreign press though, Argentina’s crisis has a logic of its own: Recently, Reuters exposed that the “spectacular loss of value in emerging market currencies”  has led to one of the worst years in history for the Indian Rupee, has crashed the Turkish Lira, the Mexican Peso and the South African Rand, turning 2013 into a “…a train wreck of a year for emerging countries…”. However, when referring to Argentina’s currency problems, Reuters assure that the crisis only stems from the fact that  “…Argentina’s government began moving away from market-friendly economic policies toward a more populist attitude…”

See where I’m going with this? The Economist followed a similar logic, in which connecting “international context” with “emerging economies” and “currency devaluations” was not even an option.

The same day that the publication ran an article providing an optimistic perspective on the prospect of an emerging market crisis (they went so far as to use the headline “Don’t Panic”), it ran another article on Argentina and Venezuela stating that “The Party is Over” and that Argentina and Venezuela would be condemned to a future of misery and stagnation, although the article did end with the assertion that Argentina’s recent measures were a “halting step towards normality,” and that the country is nowhere near the situation of Venezuela.

Needles to say, our good friend here at The Bubble, The Wall Street Journal’s Mary Anastasia O’Grady, went as far as to diagnose Argentina’s history of recurring devaluations as simply “pathological.”


This may crush a few egos around here, but Argentina is not setting any records or blazing any trails in the world, and chances are that most journalists out there barely know what our country is about beyond the peculiarity of our political leaders, our football players and that catchy tune known as “Don’t Cry for Me Argentina.”

So, upon close analysis, you will notice the existence of a perverse and vicious cycle in the press: the federal government’s propensity to create tangible enemies out of whatever it can, coupled with the local media’s fetish for calamity, drama and political opportunism. The result of this is mostly tragic articles that announce the end of Argentina as we know it. The foreign press reads these articles – which make our country sound like some badly-acted telenovela – and provides the world with some international coverage that eventually, the local media picks up and re-publishes, misinterpreting it as final confirmation that we are, in fact, doomed.

Perhaps the clearest example of this can be found on La Nación after recently publishing Ms. O’Grady’s op-ed about Argentina’s “pathological tendency” to devalue its currency. The article was simply translated into Spanish, and it failed to mention that it was a column based on the opinions of a journalist and not an editorial of the Wall Street Journal. It simply read, “In Argentina, A Mega Devaluation Seems Inevitable”.


Perhaps in an attempt to emulate Julio Cortazar’s “Hopscotch,” the foreign media’s preconceptions about Argentina translate into completely misleading articles that can be read from multiple angles and lead to opposing conclusions, depending on where the reader stands politically. 

If you google Argentina’s devaluation crisis, these are the first results that appear:

  1. Argentina on the Brink (Of collapse, that is): “President Kirchner squandered the recovery in recent years by increasing spending on wasteful subsidies and picking unnecessary fights with the private sector.” -The New York Times
  2. Argentina’s Coming Collapse: The relative good news is that the economic slide contributed to a defeat for Mrs. Kirchner’s faction in elections last fall, meaning that she will be forced to leave office when her presidential term expires  at the end of next year. – The Washington Post
  3. “Argentina seems headed for another  (…) economic and political turmoil.” -The Washington Post.
  4. “Argentina has a strong propensity to make mistakes.” -O Globo
  5. The Party is Over: In Latin America, the unwanted title of outlier has two contenders: Argentina and Venezuela. -The Economist
  6. “A 200-year history of recurring devaluations is even more serious than an addiction. It’s pathological.” -The Wall Street Journal (I can’t get enough of this one).


Now, after revisiting these articles with a more sophisticated understanding of Argentina’s economic context, this is what you get:

  1. The government is trying to correct past mistakes by negotiating compensations for the oil company YPF and by creating a new Consumer Price Index up to IMF standards.
  2. Argentina has returned to the negotiating table with the Paris Club to cancel its long standing debt.
  3. Argentina’s partial liberalization of currency controls is halting steps towards normality.

It clearly all depends on how you read the news. Let’s face it; the Kirchnerite government’s admittedly progressive measures have only been equaled by their ability to make the kind of political mistake that makes for the most flamboyantly dramatic headlines. Sadly, the foreign press makes great use of that and most readers gravitate to those apocalyptic headlines, not really making an effort to understand the entire articles. Hence, the general conclusion is that Argentina is doomed.

As former Economy Minister Aldo Ferrer recently put it, this is not the same context that lead to the crisis of 2001: the economy is working relatively well, the country isn’t indebted to its eyeballs and the prospects of foreign trade are stable. This is a crisis of expectations: expectations of citizens, investors, businessmen and unions, and uncertainty on how the government will react to this situation.

True, the immediate future does not look promising. However, while the government maintains its feisty discourse, putting the blame on anyone but themselves, some concrete steps are being taken to face this crisis. Whether those steps are part of a carefully devised economic plan of a rushed, desperate attempt to change the course of this economy is debatable, but the decision-making process is there.

It is said that the media’s role is to keep politicians humble. That sounds about right. But it is also said that perception is everything. When a potential crisis rests partly on the how the population perceives their reality, sometimes us journalists, both local and foreign, should be more aware that whatever we write has the power to shape reality. Eye-catching headlines and controversial one-liners are part of the game. But so is fact-checking.

The situation is bad already. Let’s not try to make it worse.

(Featured photo via Yasmin’s Journalist Dreams)