South America has been a special part of my life for four decades. I have lived many years in Brasil and Peru. I am married to an incredible lady from Argentina. I want to share South America with you.
When the Argentine frigate Libertad was impounded in Ghana four years ago at the behest of a litigious hedge fund, it was a national humiliation. The episode could hardly contrast more with the Argentine coastguard’s summary sinking of a Chinese trawler fishing illegally off Patagonian shores earlier this month.
Much has changed in Argentina since the centre-right Mauricio Macri became president last December, putting an end to 12 years of leftist rule. Nowhere is that change more evident than in Argentina’s relations with the rest of the world, as the imminent resolution of a decade-long legal dispute with creditors — which triggered the Libertad’s seizure — promises to smooth the return of South America’s second largest country to the global economy.
In recognition of Mr Macri’s progress during his first 100 days in office — which ended on Friday after a slew of market-oriented reforms including the elimination of currency and trade controls designed to steady Argentina’s listing economy — US President Barack Obama arrives in Buenos Aires on Wednesday.
The last visit by a US leader to Argentina, when George W Bush attended the Summit of the Americas in 2005, was marred by mass popular protests against “Yankee imperialism”. At the time, the Latin American left was at the height of its power as commodity prices boomed, and US influence in the region had waned, its attention distracted by conflicts on the other side of the globe.
But now, once influential leftist governments in both Brazil and Venezuela are in disarray, opening up space for Mr Macri to assert his leadership in the region and mend soured relations with countries such as the US and the UK.
Marcos Peña, Mr Macri’s cabinet chief, says that the government wants to move on from Argentina’s “adolescent” relations with the US. It has lurched from what was once famously called a “carnal relationship” during the 1990s, when Argentina was an enthusiastic follower of the “Washington Consensus”, to open hostility under the former president, Cristina Fernández de Kirchner. That government’s foreign minister once angered US officials by publicly seizing undeclared equipment from a US air force plane that had landed in Buenos Aires.
“Both extremes were immature,” Mr Peña told the FT, who says a “new phase” is beginning in Argentina’s relations with the US — and the rest of the world — as Buenos Aires seeks to regain the trust both of governments and investors. “We feel that Obama’s visit is a show of support for this process of building trust.”
This is just the beginning of what we hope will be a mature and intelligent bilateral relationship. That’s what we need. It may sound obvious, but for many years it’s been difficult
Mr Peña recognised that although Argentina is “very underinvested”, the government needs to assuage two major doubts among foreign investors, who economists say are the key to reactivating stagnant growth after many were scared off by the previous administration’s interventionist policies. “First, what guarantee do they have that the situation now is sustainable in the long term, and second, why should things be different this time? We are trying to take small steps all the time to deal with those doubts,” he said.
Susan Segal, president of the Americas Society and Council of the Americas, says that Mr Obama’s visit to Argentina, which will follow on from a historic trip to Cuba, is an “enormous statement of confidence” in Mr Macri, especially given that it comes so early in his presidency.
“Argentina wants to normalise its relations with the world and reinsert itself into the global economy,” said Ms Segal. “It is a critical moment in the history of Latin America and the leadership of the hemisphere, and Macri [could play an important role] at a time when his direction and ideas are important,” she added.
The significance of Mr Macri’s presidency has already been recognised through visits to Buenos Aires by France’s president, François Hollande, and Italy’s prime minister, Matteo Renzi. Mr Macri also caused a sensation at the World Economic Forum in Davos in January, when investors were impressed by the fast pace of his economic reforms.
On Friday, the World Bank confirmed that it would make fresh loans to Argentina of up to $4bn over the next two years. Together with Colombia, Argentina is trying to become a full member of the Organisation for Economic Co-operation and Development, alongside Chile and Mexico, the only two countries in the region so far to be accepted.
Juan Vaquer, the president of the American Chamber of Commerce in Argentina, said that Mr Obama’s “symbolic” visit is just the “tip of the iceberg”. “There are going to be very significant investment flows,” he said, pointing to infrastructure, energy and agriculture as sectors particularly favoured by investors. “This is just the beginning of what we hope will be a mature and intelligent bilateral relationship. That’s what we need. It may sound obvious, but for many years it’s been difficult.”
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