Tony Leon: SA's lessons from Argentinian economic crisis

Argentina’s economy is in a state of economic paralysis.

The country is currently suffering a recession and an inflation rate of 55%, and the Peso currency took a plunge on Monday ahead of a re-election bid.

Some say the crisis could be a warning for South Africa.

Former Democratic Alliance leader and ambassador to Argentina highlights lessons that can be learned in the South African context.

He joins Bongani Bingwa to discuss what we can learn.

Leon lived in Argentina for three years until 2012 as South African ambassador.

I kept being struck by the extraordinary similarities between our countries.

Tony Leon, Former SA ambassador to Argentina

He says in the 1930s Argentina was the seventh richest countries in the world, and currently, it's economy is smaller than South Africa.

Mauricio Macri is the current president of Argentina and has been in office since 2015 but his reign may be coming to an end.

Centre-left candidate Alberto Fernandez won the presidential primaries in Argentina this past Sunday show those proposing radical economic transformation "are on the comeback trail", says Leon.

And the markets reacted violently to that on Monday...and it could mean Argentian is in for more hard times ahead.

Tony Leon, Former SA ambassador to Argentina

The country has not had success with IMF bailouts either, he adds

Argentina is the poster boy for the lack of success with IMF bailouts. I think they have had ten or eleven...and it's always ended badly.

Tony Leon, Former SA ambassador to Argentina

But the bailouts have been necessitated by "terrible economic decisions made by various domestic presidents."

He says Argentina's public finances are far worse than those of South Africa.

The biggest problem in Argentina is inflation whereas we have a very sober Reserve Bank and inflation here is well under control....in Argentina the resort to printing money has been almost irresistible.

Tony Leon, Former SA ambassador to Argentina

South Africa is not yet in that position, but things can accelerate or deaccelerate very quickly, he warns.

He says another aspect in Argentina's populist playbook familiar to South Africans was the massive rise in corruption within the presidency.

Listen to the interview below:


This article first appeared on 702 : Tony Leon: SA's lessons from Argentinian economic crisis


Recommended

by NEWSROOM AI
Read More
'We're not immune to challenges in the economy so we also salvage from our side'

'We're not immune to challenges in the economy so we also salvage from our side'

CEO at Curro Holdings Andries Greyling explains how the company has manged to sustain good growth.

[LISTEN] Mcebisi Jonas gives his take on SA's economic and political landscape

[LISTEN] Mcebisi Jonas gives his take on SA's economic and political landscape

The former deputy finance minister details some of the contents of his book 'After Dawn: Hope after state capture'.

Is South Africa in need of an IMF bailout?

Is South Africa in need of an IMF bailout?

Commentator and chartered accountant Khaya Sithole weigh in on whether the country needs financial assistance.

'Unemployment is not a problem, it's a crisis'

'Unemployment is not a problem, it's a crisis'

Labour analyst and Fin24 columnist Terry Bell responds to the shocking unemployment statistics released on Tuesday.

Worst unemployment rate in 16 years. 455 000 more people jobless than a year ago

Worst unemployment rate in 16 years. 455 000 more people jobless than a year ago

About 6.7m people in SA are unemployed, up from 4.3m a decade ago. Bruce Whitfield interviews labour economist Andrew Levy.

Popular articles
'Ramaphosa wants to find ways to force pension fund managers to invest in SOEs'

'Ramaphosa wants to find ways to force pension fund managers to invest in SOEs'

Daily Maverick associate editor at Scorpio Sikonathi Mantshantsha takes a look at the week's financial news.

[WATCH] Here's the purported ANC letter Maimane revealed during Ramaphosa's Q&A

[WATCH] Here's the purported ANC letter Maimane revealed during Ramaphosa's Q&A

The 2014 letter on an ANC letterhead signed by then TG Zweli Mkhize thanks Bosasa's Gavin Watson for a 3 million party donation.

Lion cub worth R50k rescued from house in Cape Town

Lion cub worth R50k rescued from house in Cape Town

The feline was found by detectives at a property in Athlone on Wednesday following a tip-off.

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

The inspiring South African choirU2's Beautiful Day at America's Got Talent quarter-finals.

SA’s richest woman opens up about being a refugee and becoming a billionaire

SA’s richest woman opens up about being a refugee and becoming a billionaire

Magda Wierzycka – Sygnia’s renegade CEO – on her attitude toward money (hopes and fears, successes and failures, etc.).

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

The reason for the leakage has been revealed, explains Table Mountain Aerial Cableway MD Wahida Parker.