Democratic Dishonesty: Manipulating Economic Data in Argentina
Shen, Maria, Harvard International Review
President Cristina Fernandez Kirchner has reason to be optimistic. The first female president of Argentina is very likely to be competing for re-election in October and die latest opinion polls show that she is significantly more popular than her political rivals. Although the President's popularity has taken dips in the past and her political career has seen its share of scandal, the government has been able to quickly recover its levels of popular approval. In 2009, President Kirchner achieved only slightly more than 30 percent approval in opinion polls; however, in a more recent Ipsos-Mora y Araujo poll, 65 percent of those interviewed described the presidential image as "good," or even "very good."
This image turnaround did not occur without considerable effort and care to ensure the constant flow of uplifting news in the country. After Kirchner took power in 2007, Argentina has faced increasing problems with the believability of information disseminated to the public. This economic stronghold of Latin America--ranked third largest economy in South America--may have improved its markets, but threats of inflation still exist and may be exacerbated by a government that disguises economic realities behind the rosier images it presents the public.
Inflation in Argentina has slowed to ten percent, reports Indec, the government-controlled statistics office. Contrary to the official number, however, private-sector economists estimate that inflation has shot up to 25 percent. Independent estimates of poverty at 30 percent are also well above the official 12 percent estimate. Ever since former President Nestor Kirchner dismissed several Indec statisticians and replaced them with political appointees in early 2007, the office has been accused of fabricating economic reports. The former president of the central bank, Martin Redrado, has also accused the government of manipulating data from die statistics agency. Doubts about the validity of Indec's calculations of the consumer price index have caught the attention of international organizations.
The government insists that price increases, such as the 40 percent rise in food-prices since the beginning of 2011, are normal in a booming economy that had grown 9.1 percent in 2010. Argentina has long dealt with problems of inflation. Argentina's hyperinflation from 1975 to 1991 sometimes caused storeowners to adjust their prices at an hourly basis. Today, a return to hyperinflation seems unlikely. Nevertheless, the government is cautious when handling issues of inflation, even taking care to step around the word with phrases such as "price dispersion."
Despite the booming economy, there are still fears of inflation as the central bank increases money supply. Indec's unreliability has only made things worse. Though Argentina may be Latin America's third largest economy, it is only sixth in the region for foreign direct investment. In addition, economists say that the government has worsened inflation by providing unreliable economic data; suppliers and producers operate on their own perceptions of inflation and raise prices "seemingly at will," according to the New York Times. …