On March 24, 2014, the Brookings Global-CERES Economic and Social Policy in Latin America Initiative (ESPLA) and the American University’s International Economic Relations Program (IER) co-hosted a private event on Argentina’s political, economic and social outlook.
Dr. Sergio Berensztein, president of Poliarquía Consultores, and Dr. Claudio Loser, former international head of the Western Hemisphere department at the International Monetary Fund and current visiting senior fellow at the Inter-American Dialogue, provided opening remarks focusing on the political and economic outlook for Argentina.
After these two brief presentations (available for download below), the roundtable discussion engaged experts and thought leaders, both from the region and from Washington D.C., in a conversation on the implications that the recent economic and political episodes have for Argentina, the Latin America and the international community.
Argentina is facing economic and political turbulence, exhibiting depleting foreign reserves, and current account and fiscal surpluses turning into deficit. Some members of the roundtable alluded to the so-called first generation currency crises where continuous fiscal deficits translate into foreign reserve losses. They questioned the extent to which Argentina is in a collision course headed for a disaster. Nevertheless, and partly due to the more recent observed pragmatism, the participants agreed that Argentinian politicians led by the Peronist party will eventually adopt whatever-it-takes measures and stop things from becoming bloody.
Lastly, the members of the roundtable shed light on the need to articulate long-term reforms and a comprehensive and consistent plan intended to strengthen Argentina’s institutions. Such reforms will incorporate the need to increase public spending efficiency, reduce monetization, regain the trust of domestic and international investors, and develop an inclusive policy agenda that promotes genuine dialogue across different social and political agents.