EDITORIAL: Which way, Argentina?

By | Saturday, June 28, 2008

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The economy is spiraling out of control due to the foolhardiness and intransigence of its current leader, President Cristina Fernandez de Kirchner. Argentina has strong commercial ties with America. It is also a major non-NATO U.S. ally in South America: the nation's stability is vital to American counterterrorism, counternarcotics and nonproliferation efforts.

Mrs. Kirchner came to power in December, following four years of rule by her husband, Nestor. She sailed to victory on the promise that she would continue Argentina's stellar economic performance: The economy grew at a rate of 8 percent per year since 2003. Yet once in office, her socialistic ideology has reigned supreme. To raise money to finance government programs for the poor she increased taxes on agricultural exports in March. And the farmers are rightly outraged.

Since then, Argentina has been in turmoil. The farmers refuse to accept an increase in export duties from 35 percent to 44 percent, lamenting that, along with inflation, the higher taxes cut into their profit margin by 6 percent. In retaliation, they have waged strikes. Many farmers even prefer to keep their silos full of soybeans and grains rather than ship them. There are now food and gas shortages - and there is even food rationing in Buenos Aires. Truckers who were concerned about lost income are also on strike. The strikes are causing havoc in many markets. The urban middle class has poured out into the street in protest against the government - many banged on pots and pans, in solidarity with the farmers. Citizens now fear that Argentina might suffer another economic collapse, as occurred in 2001, when the value of the currency plummeted within days and wiped out their savings. To prevent this, some are rushing to their banks to remove their savings. Meanwhile, ships wait in Argentina's ports. They sit empty as the nation's reputation as a reliable international supplier deteriorates.

At the heart of the current discontent is a growing dissatisfaction with years of authoritarian policies by the president and her husband. The Kirchners rule with a heavy hand - favoring regulation instead of following the basic rule of supply and demand. Despite her dismal 20 percent poll rating, Mrs. Kirchner responded to the protests with condescension, stating that "the country cannot be governed by casserole dishes, bullhorns and roadblocks."

Argentina used to be one of the most prosperous nations in South America. But since the 1920s, a succession of governments have adopted socialist policies that have eroded the nation's standard of living. Rather than reversing this course, and recognizing that socialist policies have failed wherever they have been tried, the current president stubbornly defies reality. Argentinians clearly want and deserve a more freedom-loving government.

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