"Argentine stock markets and its currency have both plunged after conservative Argentine President Mauricio Macri suffered a shock defeat in primary elections on Sunday." He lost to left wing challenger Alberto Fernancez who is running with former President Cristina Fernandez de Kirchner. The Argentine peso fell 15% against the US dollar and the stock market Merval index closed down 31%. Why the panic? Because, as president, de Kirchner allowed the country to default on its loans which immediately triggers a rating downgrade and makes it difficult for the government and businesses to borrow. She also forced the central bank to hand over its reserves to allow her to pay off government debts. "The tragedy is that Argentina entered the 20th century as one of the world's richest countries and left it an international pariah. For many, it has now quite simply become invisible or irrelevant," wrote J Webber in 2010. Last year, the IMF agreed a $57 billion deal with Argentina in return for spending cuts by the government, but the country remains in recession, with inflation at 22%. After his defeat in the primary President Macri "promised on Wednesday he would raise the minimum wage, temporarily freeze gasoline prices and income tax bracket floor by 20%". Kirchnerism, is derived from Peronism, a legacy of Juan Domingo Peron who was the only man elected three times to be president of Argentina. Peron's policies included social security, low-income housing and free healthcare for the poor and high taxes on imports to protect local industries. Last year, Deputy Governor of the Reserve Bank of India (RBI) caused great anger in government when he compared India with Argentina. He talked about the resignation of Argentina's central bank chief because of his inability to protect the bank's reserves from the government of Cristina Fernandez de Kirchner. Last December, RBI Governor Urjit Patel resigned because of the government's insistence on transferring Rs 3.6 trillion, more than a third of the total reserves of Rs 9.59 trillion of the RBI. The government is dishing out Rs 6,000 to all farmers and has announced a pension scheme of Rs 3,000 per month for farmers and small traders. A health scheme forces private hospitals to provide tertiary healthcare at government rates to the poor. No wonder, private hospitals are afraid of going bankrupt. Customs duties have been raised on imports to protect domestic industries. Our government's numbers do not add up, wrote O Goswami. "Taking a cue from Acharya's analogy, a better recent comparator for Modi might be former President of Argentina Cristina Fernandez de Kirchner, who served two terms in office from 2007 to 2015," wrote Prof V Dahejia. Ominous words.
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