Is Argentina looking increasingly like Venezuela? Yes and no.
According to the Index of Economic Freedom, Argentina ranks 166th in the world, nine places ahead of Venezuela, but within the same group of “repressed” economies.
Inflation in Argentina is more than 25 percent a year, although President Cristina Fernandez de Kirchner’s populist government claims it’s only about 10 percent, and people there are rushing to buy U.S. dollars in anticipation of a major devaluation.
Like Venezuela, Argentina has recently nationalized foreign firms — such as Spain’s Repsol oil company — corruption is rampant, and the government has tried to control all major institutions.
But the Kirchner government has not yet been able to silence the media — although it is trying hard — and can’t manipulate elections that easily. The government lost recent legislative elections, and there is a general expectation that Argentina will get a more responsible government after the 2015 presidential elections.
Is Brazil looking increasingly like Argentina? Not really, although sometimes it gives that impression.
According to the Index of Economic Freedom, Brazil ranks 114th in the world, about 40 places ahead of Argentina.
Granted, Brazilian President Dilma Rousseff, who is running for re-election in October, is failing to take measures to promote investments, and is sticking to a Third World foreign policy that keeps the country from signing trade deals with the world’s biggest economies.
But Rousseff has fired more than half a dozen of her cabinet ministers over corruption charges, and Brazil’s Supreme Court has sentenced leading ruling-party politicians to prison on charges that they bribed legislators. None of that has happened in Argentina, much less in Venezuela. Likewise, Brazil is thinking long term on issues like education, science and technology, which is not the case among its South American neighbors.
My opinion: The idea that much of Latin America is falling into a downward spiral makes for good jokes, but it’s most likely untrue.