I’ve heard more than one politician suggest that Argentina’s default is the way to go to get Ireland out of its crisis. Well, maybe. And maybe not. I’ve a English friend whose missionary parents were out there when it all cowped, and I recall that they had problems getting enough food to eat, never mind coping with the energy shortages.
Tough medicine, but if it works and helps the country straighten things out maybe it would be worth it?
Well maybe. But then again, maybe that’s not what’s happened. The Economist has recently taken Argentina’s economic figures out of their tables, and they admit, not before time:
Since 2007 Argentina’s government has published inflation figures that almost nobody believes. These show prices as having risen by between 5% and 11% a year. Independent economists, provincial statistical offices and surveys of inflation expectations have all put the rate at more than double the official number (see article). The government has often granted unions pay rises of that order.
What seems to have started as a desire to avoid bad headlines in a country with a history of hyperinflation has led to the debasement of INDEC, once one of Latin America’s best statistical offices. Its premises are now plastered with posters supporting the president, Cristina Fernández de Kirchner.
Independent-minded staff were replaced by self-described “Cristinistas”. In an extraordinary abuse of power by a democratic government, independent economists have been forced to stop publishing their own estimates of inflation by fines and threats of prosecution. Misreported prices have cheated holders of inflation-linked bonds out of billions of dollars.
Hmmm…. Argentina, like Greece, has had relative recent history of military dictatorship. Ireland hasn’t. And Ireland has never quite displayed quite the same tractable attitude towards normal fiscal controls. In any case, massaging the hard economic figures to suit political establishment is hardly evidence of economic ‘bounce-back-ability’.