Washington Post Editorial Board
Today’s lesson in responsible democratic leadership comes to us from, of all places, Argentina.
For most of the 21st century – and the 20th, for that matter – Buenos Aires has been the setting for serial populist misadventures, most recently under President Cristina Fernández de Kirchner, who brought her country double-digit inflation, spectacular public corruption and costly strife with the democratic West during two four-year terms that mercifully ended in December.
Her successor, Mauricio Macri, is showing himself to be made of more pragmatic stuff, most recently by reaching a settlement with Argentina’s foreign creditors as per his campaign promises.
Those creditors consist in large part of U.S. hedge funds that bought up distressed Argentine bonds left out of the country’s two previous restructurings of US$100 billion in debt (on which it defaulted in 2001), betting U.S. courts would force Kirchner to honor them at face value and deliver a windfall. Despite a monumental propaganda campaign by Buenos Aires against these “vulture funds,” they did, indeed, have the law on their side, as a New York federal judge repeatedly found.
Kirchner’s efforts to resist payment anyway merely prolonged Argentina’s exclusion from international financial markets and, accordingly, her country’s economic instability.
In agreeing to buy out the hedgies for approximately US$4.7 billion, or about 75 percent of their maximum claim, Macri effectively declared that Argentina will put its tangible long-term economic interests over the crowd-pleasing abstractions, such as “dignity,” upon which Kirchner invited her people to feast.
He faces a challenge in getting the settlement approved by Argentina’s National Congress, where Kirchner’s Peronist party and its allies still enjoy considerable power. But an increasing number of opposition lawmakers seem to realize that the burden on those who vote “no” would be heavy, given the strong personal mandate Macri won in December and the prospect he offers of finally ending this losing battle and moving on.
After years in which their leaders have bombarded them with rhetoric to the effect that they need never make any such hard choices, what Macri is essentially asking Argentines to do is accept an imperfect, even bitter, reality and to make the best of it. Sometimes, this is a leader’s duty, and Macri deserves credit for taking it on.
And if Argentina’s chronically erratic democracy can indeed sober up, cut its losses and follow the rule of law, while restoring prosperity, then its example may inspire similar change across the hemisphere, from Caracas to Havana.
Come to think of it, we know of some North American politicians who could learn from such an example, too.
© 2016, The Washington Post