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October 20, 2016

Ambassador Talks US-Argentina Relationship

Martín Lousteau, the Argentinian Ambassador to the U.S. since January 2016, addressed a crowd at International House Assembly Hall on Tuesday. 

“I am only given twenty minutes to explain what Argentina is,” Lousteau joked. “It’s very difficult, but I will try my best,” Lousteau said. 

It has been a challenging decade for the country and its people. Argentina, the second largest country in Latin America, was in a depression from 1998 to 2012. The country had been a financial pariah, cut off from the international capital market due to its massive defaulted debts. The unemployment rate averaged 9.55 percent from 2002 until 2016, inflation kept rising, and the economy remained stagnant. Moreover, massive corruption and ineffective bureaucracy made the government lose the trust of its people.  

Then the election came last December, and new president Mauricio Macri came to power. “The election provided some room [for changes] before the crisis really hit us,” Lousteau said. “Whenever you experience a crisis, the willingness of the population to support and sustain reforms is bigger.”  

Lousteau explained that the key long-term agenda of the reform was to increase the productivity of the public sector. Lousteau said the public sector in Argentina accounts for 40 percent of its annual GDP, and when productivity is low, it became impossible to grow the economy.  

“When the productivity is declining, [the] only way to compensate for it is to have a higher exchange rate, but workers are worse off,” Lousteau said.  

Lousteau said the push for reform faced twin challenges: on one side the government needs to keep its distance from the population’s populist instincts to implement long-term reform while also actively engaging the public in order to create a better future.  

Speaking of the public anger towards the government, Lousteau said the country should trust the leadership of the government in directing the direction of the reform, and re-focus on what really matters. 

“We should first discuss what we need the state to do, and the only way to do that is through in-depth political discussions,” Lousteau said. 

During the Q&A session following his talk, Lousteau touched on the recent political reforms that aim to increase the transparency of the state bureaucracy and the pragmatic value of adopting data-driven solutions in public sector.  

He also talked about how his goal as an ambassador was to deliver a less simplistic image of Argentina to people in the United States: “We are beyond an agricultural country. Like the U.S., we are also a country shaped by immigrations and a society with institutions that have a long industrial tradition.”  

“He [Lousteau] is obviously an eloquent speaker…I liked his point that we should not only invest in public sector but also invest smartly,” first-year Gabriel Goodspeed said.   

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