February 2016

Voices from street cafes to the corridors of government tell of Argentina’s rebirth—one that is energetically re-engaging the international community and developing plans to reform its economy so it works for the people of Argentina.  Bringing in a new era for Argentina will present many challenges for President Macri and his new team. That said, the early achievements demonstrate that Argentina is off to a very good start.

After 14 long years of negotiations, Macri’s team has reached an agreement with the bond-holders. Earlier the Macri team achieved an agreement with an Italian bank and an agreement with US based Elliot Manager and Aurelius Capitol was concluded on March If Argentina’s Congress passes the legislation necessary to authorize these agreements, President Macri will have achieved his first campaign promise—to give Argentina access to the capitol markets.

With these agreements Argentina can begin to rebuild its economic relationship not only with the capitol markets but also with the International Financial Institutions including the IMF and the World Bank. In response to President Macri’s commitments, the US released its hold on the IMF and World Bank ability to lend to Argentina; rumor has it that US Treasury was also instrumental in the US bond holders agreement.

Since taking office the Macri government has removed currency controls thereby ridding Argentina of multiple exchange rates and allowing the currency to float freely. Dollars can be bought and sold without restraint and Argentine businesses can purchase inputs from abroad. These reforms should boost Argentina’s exports and benefit the countries critical agricultural and commodities sectors.

While embarking on a campaign to put Argentina’s fiscal house in order and its economy functioning to serve the people, President Macri is putting Argentina back on the global stage. Under the Kirchner government diplomatic relations with many countries including the US were strained whereas relationships with Venezuela, Bolivia, China and MERCOSUR countries flourished. President Macri has changed Argentina’s course and is reengaging Western democracies including the United States and denouncing human rights violations in Latin America, including denouncing President Maduro’s efforts to stop newly elected Venezuelan Members of Congress from taking their seats.

While I was visiting Buenos Aires last week I watched the country celebrate as President Macri hosted President Francois Hollande of France; Prime Minister Matteo Renzi of Italy visited the week prior. That same week, US President Obama announced he would visit Argentina, the only G-20 country he had not visited. Seeing these dignitaries alongside President Macri in the “pink house” is a clear sign that the world community is warmly welcoming Argentina back.

Watching Argentina retake its place on the global stage made me wonder whether Argentina’s changes were a sign of a deeper, regional change. The same week Renzi and Hollande visited Argentina, Bolivian President Morales lost a national referendum that would have enabled him to seek office for a fourth term and President Correa in Ecuador announced he would not seek reelection in 2017.