Don’t cry for me Argentina

In the early 20th century, Argentina was one of the wealthiest countries in the world. It accumulated wealth from the development of agriculture and livestock industry in the Pampas. In the early 1930s, the South American nation ranked sixth in per capita income and 10th in trade volume in the world. The antique and elegant buildings in Buenos Aires designed by world-class European architects remind us of the glory of a country, which was once called the “second America”

Juan Peron, former Argentinean president who was inaugurated in 1946, collapsed the country’s system that valued a free market economy, saying, “Argentina is a country of fat bulls and malnourished laborers.” He nationalized key industries and expelled foreign capital based on state socialism. He raised salary by 25 percent every year and increased welfare expenditures significantly to change labor unions and impoverished people into his supporters. Peronism, a symbol of populism, brought down Argentina, which was about to join the club of developed countries.

The negative legacies of Peronism are still continuing. Argentineans who are accustomed to free lunch often take to the street to ask for more welfare and subsidies. Politicians cave in to their claims to continue their political career even without seriously considering about the future of the country. They caused the tragedy of the country such as a financial crisis in 1982 and a debt moratorium in 2001, and are now facing another financial crisis. “Don’t cry for me Argentina,” a song from Evita, a musical about Juan Peron’s second wife Eva Peron, is touching but Argentina’s tears have much more meanings than that. Gong Byeong-ho, an economist, says, “The ups and downs of Argentina warn us that if the people are duped by populism, the aftermath lasts for a long time.”

It could be our story. Politicians do not care about the national coffer to claim almighty welfare and make anti-market claims blocking the growth engine. This will become even more serious in the run-up to the 2017 presidential campaign. Not to repeat the same mistake of Argentina, Koreans should show that populism and anti-market sentiment do not help politicians win votes.

Editorial Writer Kwon Soon-hwal (shkwon@donga.com)