Argentina’s chronic debt troubles, exacerbated by horrendous fiscal mismanagement by Cristina Fernandez de Kirchner’s administration, came to an embarrassing head this week. Ghana has impounded El Libertad, an Argentine naval training vessel, due to the South American country’s default on scheduled debt repayments. When African countries become your agitated creditors, you know your country is faltering somewhat.
President Kirchner has been praised for tackling human rights abuses in her homeland and confronting the terrible truths of the “Dirty War” that tore Argentina apart during the 1970s and ’80s. Unfortunately, such commendable achievements will soon be forgotten if Kirchner does not confront this latest challenge. Argentina’s economy is reeling as a result of the decline in exports of important commodities such as beef and catastrophic financial mismanagement, yet insufficient spending cuts or tax raises are being made to offset the loss and service debts.
Instead, to detract from the terrible economic situation, Kirchner has taken the dangerous step of appealing to nationalist sentiments. In particular, she has resurrected Argentina’s claim to the Malvinas (Falkland Islands) despite them being undisputed British territory, occupied by people with no desire to become Argentine-ruled. Additionally, Kirchner has nationalised YPF, the country’s biggest oil company, wrenching it from the grasp of Spanish giants Repsol to the horror of Europeans. Such moves have been widely supported in Argentina, as people seek a way to forget economic travails.
However, alienating your country from important trading partners and potential financiers at a time of economic malaise is unwise. Furthermore, playing the nationalist card threatens Argentina’s hard-fought for political and social stability. Nationalism, economic decay and the increased militarisation of society typically go hand-in-hand. Should a radical right-wing politician come to prominence, promising further nationalisation of foreign-owned companies, and war over the Falklands, they could garner support from a desperate populace with nowhere else to turn. Such events would bring untold misery to Argentina. Any war over the Falklands would see a repeat of the annihilation of 1982 and nationalising foreign businesses would trigger any remaining investors to flee the country.
Ghana’s decision to remand El Libertad may seem somewhat farcical. Yet the story beneath is a stark reminder that Argentina’s reform from the dark days of the 1970s and ’80s is quickly regressing.