ARGENTINA'S ECONOMIC ,CORRUPTION PROBLEMS AND THE FAILED WAR ON DRUGS.ARGENTINA CONTINUES TO BE MIRED IN CLIMATE OF CORRUPTION AND ECONOMIC REPRESSION IN THE PUBLIC SECTORS.


The President of Argentina hosted the official launch of the Argentine G20 presidency: the world’s major forum for economic, political, and financial cooperation.This will be the first G20 presidency in South America and for Argentina an opportunity to help craft global policy.

In  the 2015 presidential election and Argentines said it was time for a change. Cambiemos! With less than a year under his belt, President Macri settled the multi-billion dollar debt with its holdout creditors, sold global bonds to the tune of $16.5 billion (an emerging market record), eliminated foreign exchange restrictions, established a floating exchange rate , suspended the export tax on all agriculture (except soya), passed a tax amnesty bill for its citizens and cut government spending in areas such as gas, water and electricity. Despite the fact that these swift global moves have created some domestic turmoil, including an increase in inflation and unemployment rates, Argentina’s profile is getting more “Likes” these days. Macri also kicked alliances with Venezuela and friends to the curb in favor of a free trade deal with the United States. International companies have taken notice and major players like GM, Dow Chemical and American Energy Partners are taking a chance on Argentina. Coca-Cola and Fiat-Chrysler are also getting roses: the former has pledged to invest $1 billion over the next four years and the latter is spending $500 million to upgrade its automotive plant in Cordoba., the country elected President Mauricio Macri.The country’s first democratically elected leader in the last hundred years to not be either a populist or a militarist. During his term, he has instituted many free-market policies that have benefited investors, but these policies have also had harmful effects on small businesses. Argentina’s economy has been shrinking in the last year, and unemployment is almost at 10 percent. Macri’s approval rating has gone down 18 percentage points to 54 percent, and Argentine citizens are now protesting in the streets. In order to accurately explain this political instability, one needs to understand the short-term economic losses and long-term economic gains behind his policies.Macri took office with a lot on his plate. The tumultuous history of Argentina includes dictatorships and failed socialist regimes. The country was in default from 2001 to 2016 and reached 21 percent unemployment in 2002. Cristina Fernandez de Kirchner, the previous president, instituted protectionist policies that squashed foreign competition and implemented currency controls that overvalued the peso. In addition, Argentina has been experiencing high inflation for over a decade and has underinvested in infrastructure. Krichner’s administration was filled with multiple corruption scandals, including fraud, and was notorious for manipulating statistics. Although a regional power in the 1980s, Argentina's last decade has been one of isolation and economic loss.Once in office, Macri implemented policies, ranging from infrastructural upgrades to major improvements in the quality of government statistics, to stimulate the economy and cater to businesses. Importantly, Macri also cut the export tax, ended currency controls, and lowered subsidies. Despite how sensible many of these reforms sound, the average Argentine has not yet seen the benefits—in fact, for many, things have gotten much worse. The economy shrank 4.3 percent from June 2015 to June 2016, unemployment hit 9.3 percent in the second quarter, and in July, industrial production had a 7.9 percent loss.

Argentina’s former President Cristina Fernández de Kirchnerrefused to testify in a fraud probe.The Kirchners were Peronistas, meaning that they swore allegiance to the enduring political phenomenon inspired by Juan Domingo Perón, the late President whose legacy is so confoundingly multifarious that it has acquired adherents on the left and right, like some kind of multihued national cloak. The Kirchners adopted a leftist course, siding with the late Hugo Chávez and the Castros in world affairs, while lambasting the United States. Kirchner engaged in a long-running feud with the media conglomerate Grupo Clarín, accusing it of having a Mafia-like hold over the flow of information in Argentina. Later, she took on international debt speculators, calling them “vultures” and refusing to pay them, in what became a prolonged and, for Argentina’s credit rating, deleterious standoff.

Like all Latin American countries, Argentina has a tumultuous history, one tainted by periods of despotic rule, corruption and hard times. But it’s also an illustrious history, a story of a country that was once one of the world’s economic powerhouses, a country that gave birth to the tango, to international icons like Evita Perón and Che Guevara, and to some of the world’s most important inventions  Understanding Argentina’s past is paramount to understanding its present and, most importantly, to understanding Argentines themselves.rruption in Argentina remains a serious problem. Argentina has long suffered from widespread and endemic corruption. Corruption remains a serious problem in the public and private sector even though the legal and institutional framework combating corruption is strong in Argentina. While corruption exists in all levels of society, businesses should note the especially high risk in public procurement. Argentina's anti-corruption provisions are largely contained in the Criminal Code , which prohibits the active and passive bribery of public officials and bribery of foreign public officials. The Code does not provide an exception for facilitation payments, and gifts are prohibited, but enforcement of anti-corruption provisions is lacking. Companies consider irregular payments and bribes to be a standard way of conducting business in many sectors.Corruption, especially in the form of political manipulation, is a high risk in the judiciary. Companies report that exchanges of irregular payments and bribes to obtain favorable judicial decisions often occur . With the exception of the Supreme Court, the judicial system can be subject to political interference, especially in provincial courts . In early 2015, Argentinians took to the streets in a huge march to demonstrate their discontent with the lack of judicial independence Companies demonstrate a low confidence in the efficiency of Argentina's judiciary in settling disputes and in challenging regulations.Despite the availability of local investment dispute adjudication through local courts or administrative procedures, many investors prefer private or international arbitration, likely due to judicial inefficiency Enforcing a contract is less costly and less time-consuming than Latin American averages Argentina has ratified the United Nations' Convention on the Recognition and Enforcement of Foreign Arbitral Awards and is a member state to the International Center for the Settlement of Investment Disputes.Argentina's police carries a high risk of corruption. The police force is among the most corrupt institutions in the country and its actions are cited as arbitrary and politicized . Businesses report that the police cannot be consistently relied upon to enforce law and order .In an attempt to curb corruption, in 2014 the metropolitan police of Buenos Aires adopted a model of community policing that grants higher pay and benefits to its officers . The Oficina Anticorrupción , Argentina's anti-corruption agency, has an internal mechanism through which civil servants can complain about police actions.Transparency International's 2016 Corruption Perception Index ranks the country 95th place out of 176 countries The Financial Action Task Force removed Argentina from its "gray list" in October 2014, noting significant progress made by the country in improving its legislation and procedures against money laundering and illicit financing.The former president of Argentina was indicted on charges of leading a money laundering scheme while in office, yet another legal blow to the ex-leader who is facing mounting corruption charges and allegations.Former President Cristina Fernández de Kirchner (2007-2015) was officially indicted on April 4 by Argentine judge Claudio Bonadio for allegedly leading a money laundering ring, reported Clarín.Charges were also formally brought against the ex-president’s two children, Maximo and Florencia, as well as businessmen Cristóbal López and Lázaro Báez, the latter of whom is currently incarcerated and awaiting trial for a separate public funds embezzlement case.Fernández has not been formally charged with any wrongdoing, but federal prosecutor Guillermo Marijuán on Saturday “imputed” her. In Argentina’s legal system, that means the prosecutor feels there is enough evidence to warrant a full-scale investigation that could result in charges.The prosecutor moved against the still-popular former president after hearing 12 hours of testimony by Leonardo Fariña, an imprisoned former associate of businessman and alleged Fernández frontman Lázaro Báez.In a plea bargain, Fariña implicated Fernández and her late husband and former president Nestor Kirchner in a case related to money laundering and embezzling funds earmarked for public works. Baez was arrested.According to press reports, Fariña testified to the movement out of Argentina by Fariña and Báez of tens and possibly hundreds of millions of dollars, money that was transferred through offshore companies in Panama, Belize and the Seyschelles to a Swiss bank.The leftist leader, from the Peronist party, was barred constitutionally from seeking a third consecutive term. 

Argentina is the world’s largest consumer of red meat, with beef featuring in many dishes. “Parillas’’ are restaurants that specialise in barbecued meat. Typical dishes and foods include asado (BBQ meat), empanadas (pasties), picadas (cold meats and cheeses accompanied by bread), mate (herbal tea), dulce de leche (caramelised condensed milk) and alfajores (sweet biscuits filled with dulce de leche). The low leverage of the Argentinian private sector (28% of GDP), expected monetary easing as inflation edges lower, a doubling of USD deposits in the bank system in 2016 and access to cheap international finance after 15 years of isolation should help these investment expectations materialize. All in all, we expect economic activity to grow by 2.5% y-o-y in 2017 and by 3.7% y-o-y in 2018, driven by a pick- up in private consumption and investments . Actually, we see Argentina becoming one of the fastest growing economy in South America in the coming two years.

Economic growth is projected to strengthen and become more broad-based. Inflation is falling, as monetary policy remains restrictive, raising households’ purchasing power and lifting consumer spending. Infrastructure outlays, improvements in the business environment and rising capital flows will boost investment. Exports will benefit from the recovery in Brazil. The labour market will improve gradually as the recovery picks up.Fiscal policy will be moderately contractionary to reduce the deficit while safeguarding the recovery. Monetary policy will remain appropriately restrictive to bring down double-digit inflation. Growth and jobs would be boosted by wide-ranging structural reforms, including a comprehensive tax reform to simplify the system and improve fairness. Efforts to reduce inequalities in access to quality education would make growth more inclusive.The financial system remains small. Bank credit to the private sector and stock market capitalisation are well below the levels of OECD countries. Long-term finance is almost non-existent, constraining investment and growth. Household and corporate sector debt are low. The main challenge for financial stability will be to monitor and avoid vulnerabilities as the financial sector expands.In  2001, the economic crisis gave rise to bitter political disputes among Argentina’s ruling class. A major row over economy ministers took place in March, and a "lack of national unity" in Congress almost provoked de la Rúa to resign in the summer. In the fall, Cavallo sought to grab money from the provinces to apply toward the external debt. During the last week of October, he urged de la Rúa to break the national agreement that has guaranteed the provinces a minimum of 1.3 billion pesos in tax sharing transfers. Yet the provincial governors, who remain under intense pressure from protesters to resist federal austerity measures, walked out of negotiations after Cavallo declared they should accept payment in federal IOUs instead of cash.Angry over the deepening crisis and the weakness of the government’s response, Argentine voters delivered a damning blow to de la Rúa and his governing Alianza coalition on October 14. Results gave the Peronist Partido Justicialista (PJ) control of both the Congress and the Senate in an unusual campaign in which Alianza incumbents often found themselves running against members of their own parties, the center-left Radical Party and the smaller Frepaso. Despite a mandatory voting law, voter turnout was the lowest since the end of the military dictatorship in 1983.In Buenos Aires, the number of deliberately spoiled ballots surpassed the number of votes for any one candidate. Several polling stations noticed a number of votes cast for the cartoon character "Clemente." And 50 ballot envelopes contained an unknown white powder.On December 19, 2001, food riots erupted in se veral Argentine cities. Within hours, the riots escalated into a broad protest against th e government and social unrest unfolded into a full institutional debacle. Two administrations collapsed in less than two weeks, the country defaulted on the service of its debt, and political instability returned to the country after eighteen y ears of democratic rule. This essay traces the development of the Argentine political crisis and argues that this episode illustrates a rising trend in Latin America. The first part of this paper explores the unfolding of the crisis and its resolution. The second part compares the Argentine case with seven other similar episodes that took place in Latin America after 1990. I conclude that a new model of political instability characterized by low military intervention, high popular mob ilization, and a critical role of congress—is emerging in the region.With its debt issues mostly resolved and exchange controls eliminated, Argentina is open for business. Like any recent divorcee just getting back in the dating game, there’s going to be a learning curve. Times have changed and Argentina is considered afrontier market. International investors see potential in frontier markets because as less established, pre-emerging markets, the risk may be high, but so is the potential return. Not that adventurous, but still want to be a Global Citizen? It might be wise to balance riskier investments in frontier or developing economies with an investment that gives you broad-based global exposure to developed economies, as well as the potential growth in regions like South America and Asia-Pac.Argentina has long been a transit point for drug shipments from Andean countries and across its shared border with Paraguay and Brazil. Its manufacturing labs and local drug markets have expanded in recent years, according to the country’s attorney general. Subsequently, increases in marijuana and cocaine seizures in 2015. Not surprisingly, the 2015 World Drug Report ranked Argentina as the most frequently mentioned cocaine transit country over a 10-year period. Two years before, the same report had placed Argentina third in the ranking, behind Colombia and Brazil.In another case, three major ephedrine suppliers with ties to Mexican cartels were murdered execution-style in Buenos Aires.

Macri, the leading opposition candidate, has named the fight against drug trafficking as one of three main challenges his administration would focus on. Earlier this year, he said: “It’s putting our culture, our families at risk. It is also corrupting our institutions; buying politicians, judges, police officers and officials, and it must be stopped. We will be the first government to address this issue directly and battle it from the first day.” One of the battles Macri is specific about winning the one against the by-product of cocaine, paco. During the presidential debate on 4th October, Macri promised to eradicate the drug within five years.Argentina has long been a transit point for drug shipments from Andean countries and across its shared border with Paraguay and Brazil. Its manufacturing labs and local drug markets have expanded in recent years, according to the country’s attorney general. Subsequently, the U.S. Department of State and the United Nations Office on Drug and Crime also reported increases in marijuana and cocaine seizures in 2015. Not surprisingly, the 2015 World Drug Report ranked Argentina as the most frequently mentioned cocaine transit country over a 10-year period. Two years before, the same report had placed Argentina third in the ranking, behind Colombia and Brazil.In another case, three major ephedrine suppliers with ties to Mexican cartels were murdered execution-style in Buenos Aires. Public outrage ensued, and Cristina Kirchner launched a highly publicized crackdown on the internal drug trade, Insight Crime reported. Although the crackdown on the distribution of chemical precursors to narcotics had only a mild effect, the late response came under fire, especially since pharmaceutical companies represented some of Kirchner’s top campaign donors.Between national defense and homeland security.The last time that the government reformed federal agencies, in the 1990s, it left security forces and the criminal justice system untouched.The Federal Police, Gendarmerie, and Coast Guard operate under institutional and organizational models nearly a half-century old.On this front, Macri has agreed that the treatment of addicts should be prioritized through early-intervention and consumption reduction programs, with a special emphasis on paco  He would also reform the state-run SEDRONAR, which works to reduce the supply and demand of drugs and oversees prevention policies.Regarding the creation of an agency against organized crime, Gorgal said that the most important task for criminal intelligence was the consolidation of information from judges and federal agencies.  Using resources for this purpose would be more cost-effective, since there are already four security agencies in charge of prosecuting drug-trafficking organizations.He emphasized how more criminal intelligence could be a first step to understand regional patterns of drug smuggling and money laundering. “Argentina is operating in the shadows,” . Macri will have to develop accountability systems, such as impact evaluations for prosecutors and police chiefs, so corrupt public servants answer for their choices on the job.Yet to seriously dissipate public safety concerns, Macri will not only have to implement reforms that address these broader symptoms of insecurity, but also restore the lost confidence in institutions.

Human migration to the Americas began nearly 30, 000 years ago, when the ancestors of Amerindians, taking advantage of lowered sea levels during the Pleistocene epoch, walked from Siberia to Alaska via a land bridge across the Bering Strait. Not exactly speedy about moving south, they reached what’s now Argentina around 10, 000 BC. One of Argentina’s oldest and impressive archaeological sites is Cueva de las Manos in Patagonia, where mysterious cave paintings, mostly of left hands, date from 7370 BC.By the time the Spanish arrived, much of present-day Argentina was inhabited by highly mobile peoples who hunted the guanaco (a wild relative of the llama) and the rhea (a large bird resembling an emu) with bow and arrow or boleadoras – heavily weighted thongs that could be thrown up to 90m to ensnare the hunted animal.The Argentine pampas was inhabited by the Querandí, hunters and gatherers who are legendary for their spirited resistance to the Spanish. The Guaraní, indigenous to the area from northern Entre Ríos through Corrientes and into Paraguay and Brazil, were semisedentary agriculturalists, raising sweet potatoes, maize, manioc and beans, and fishing the Río Paraná.Of all of Argentina, the northwest was the most developed. Several indigenous groups, most notably the Diaguita, practiced irrigated agriculture in the valleys of the eastern Andean foothills. The region’s inhabitants were influenced heavily by the Tiahanaco empire of Bolivia and by the great Inca empire, which expanded south from Peru into Argentina from the early 1480s. In Salta province the ruined stone city of Quilmes is one of the best-preserved pre-Incan indigenous sites, where some 5000 Quilmes, part of the Diaguita civilization, lived and withstood the Inca invasion. Further north in Tilcara you can see a completely restored pucará , about which little is known.In the Lake District and Patagonia, the Pehuenches and Puelches were hunter-gatherers, and the pine nuts of the araucaria, or pehuén tree, formed a staple of their diet. The names Pehuenches and Puelches were given to them by the Mapuche, who entered the region from the west as the Spanish pushed south. Today there are many Mapuche reservations, especially in the area around Junín de los Andes, where you can still sample foods made from pine nuts.Vice-royalty of La Plata: 1776-1810.For the first two centuries of the Spanish empire the vast region draining from the Andes to the river Plate at Buenos Aires is the least regarded part of Latin America. It lacks the gold or silver which attract adventurers across the Atlantic to Mexico and Peru. There is no direct link with Spain, all official contact being through the viceregal capital at Lima. Most of the early settlements are established by colonists moving into the region from Peru or Chile. In 1726 Buenos Aires has a population of only 2200.But the area's status gradually improves during the 18th century, particularly after an administrative reorganization in 1776.Until this time the region has been part of the viceroyalty of Peru, administered at very long range from Lima. In 1776 the entire area, from the eastern Bolivian highlands through Paraguay, Uruguay and Argentina to the southern tip of the continent, is given separate status as the viceroyalty of La Plata with its capital at Buenos Aires.The people of Buenos Aires discover an exciting new sense of pride in 1806, after a British fleet arrives and captures the city. The Spanish viceroy flees ignominiously, whereupon Creole militia led by Santiago de Liniers expel the intruders on their own. For three years Liniers rules in place of the absent viceroy. Buenos Aires is now in the mood to seize any future opportunities.Argentina and San Martín: 1810-1816.Argentina takes its first step towards independence more easily than most other regions of the Spanish empire, partly because of the events of 1806-9 in Buenos Aires. When developments in Spain in 1808 force a choice of allegiance, a cabildo abierto (open town meeting) in Buenos Aires on 25 May 1810 quickly decides to set up an autonomous local government on behalf of the deposed Ferdinand VII.However this first step is soon followed by violent conflict with opposing royalist forces elsewhere in the province. News of this conflict brings back to Buenos Aires an Argentinian-born officer serving in the Spanish army, José de San Martín.When San Martín reaches Argentina in 1812, the patriot army is under the command of Manuel Belgrano, a Buenos Aires lawyer who has had his first military experience as a member of the Creole militia in 1806. In the early years of the war of independence Belgrano has successes against royalist troops in the foothills of the Andes in the extreme northwest of Argentina, at Tucuman (1812) and Salta (1813). But he is defeated further north, in Bolivia, later in 1813. In 1814 he is replaced as commander by San Martín.These battles have all been close to the main source of royalist strength, the rich and conservative viceroyalty of Peru. San Martin concludes that Latin America's independence will never be secure until Peru is conquered.The independence of Argentina is formally proclaimed on 9 July 1816, abandoning any pretence that the junta has been governing on behalf of Ferdinand VII. (The decision is simplified by the reactionary and incompetent rule of the Spanish king after he recovers his throne in 1814.) Meanwhile San Martín is assembling and training an army for his long-term plan of campaign against Peru. He has decided on a two-pronged attack, beginning with an invasion of Chile.He already has an important Chilean ally in Bernardo O'Higgins, a soldier closely involved in the beginnings of the independence movement in Chile but from 1814 a refugee in Argentina.United Provinces of the Rio de la Plata: 1816-1828.San Martín marches west into Chile in January 1817, a few month's after the formal declaration of full Argentinian independence. He leaves his compatriots in Argentina with the task of forming a nation out of what has been the vast but relatively uncentralized viceroyalty of La Plata.The ambitions of many in Buenos Aires are that their city should remain the capital of the entire viceroyalty. But in 1817 this already looks a forlorn hope. Paraguay has resolutely gone its own way in 1811 and by 1814 is a region almost impenetrable to outsiders. Uruguay becomes a battle ground between Argentina and Brazil.


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