Argentina's Macri Faces an Ugly Economic Dilemma

When President Mauricio Macri took office in Argentina last December, he faced two monsters that his 44 million compatriots know only too well. The first was an economy ravaged by spendthrifts, who’d driven public finances into disarray and then papered over the mess with magical statistics. The second was the quandary of how to restore sensible government without inflicting more sacrifice on an already castigated society, whose woes Macri’s populist opponents predicted and are masters at exploiting.

Argentina is hardly alone in this dilemma. As last decade’s commodities boom collapsed, leaders who squandered the bonanza fell out of favor across Latin America. Now the centrist new managements in Brazil, Peru and Paraguay -- and one day perhaps in Bolivia, Ecuador and Venezuela -- must convince the populace that their cant of austerity is better than the cant of the extravagant populists they oppose. “Through history we have seen the political pendulum swing from populism to technocratic engagement, which often ends up generating frustration and more populism,” said Argentine historian Federico Finchelstein, of the New School for Social Research in New York. “Now we are in the technocratic moment.”