The unexpected death of Nestor Kirchner provides us with a moment to look back on the trials and successes of one of Argentina’s most remarkable and controversial leaders. Kirchner was one of the few global south leaders to successfully challenge international financial institutions, and get away with it.
The Argentine economy inherited by Kirchner was in shambles. The neo-liberal agenda pursued by his predecessors – privatization, free trade, and a pegged currency – created a massive trading gap that could only be plugged by dangerously high levels of spending. This created a cycle of bad credit and capital flight, plunging the economy into bankruptcy and pushing the majority of Argentineans below the poverty line. Once the richest country in Latin America, Argentina fell below Peru and much of Central America in per capita income.
Kirchner broke with previous government policies by prioritizing economic recovery over the interests of creditors. He offered to repay 25-30 percent of Argentina’s debts but write off the remainder, stating that he would not tax poverty-ridden Argentines to pay off the debt. The IMF was helpless to stand in his way. Despite the dire warnings of the international community, Argentina’s economy grew by a remarkable 10 percent per year over the next four years. Instead of servicing an endless debt, Kirchner reinvested his country’s financial resources into the Argentine economy, while adopting a managed float for the Argentine peso, domestic price controls, export taxes, and caps on utility rates.
His progressive domestic agenda, and his initiatives with like-minded leaders in Latin America, paved the way for the rise of likeminded leaders across the continent. Indeed, many of the region’s progressive leaders have come to power on the ashes of the neo-liberal system. With this in mind, Mark Wiesbrot referred to Kirchner as “an independence hero of Latin America.”
For the full version of this column, click here.