THE HINDU Editorial Vocabulary - June 1, 2018 - Topic 2
Guarding the peso: Argentina's economic crisis
Argentina is not alone among
major emerging economies in trying to weather the current run on currencies due
to the rallying U.S. dollar and rising interest rates. But with a history of
recurrent defaults and devaluation of the peso, Buenos Aires has greater cause
for concern. President Mauricio Macri, whose market-friendly image ensured Argentina’s return to
the global capital markets in 2016 after a decade, has a special stake in
ensuring that his reforms remain on track. Following a record sovereign debt
issue that year, Argentina became the second Latin American state after Mexico
to launch a 100-year maturity bond in 2017.
The new optimistic narrative was
based on the former businessman’s commitment to reducing the fiscal deficit,
building on the prevailing reasonable ratio of public borrowing to GDP.
Nevertheless, Mr. Macri’s poll promise to make Argentina a “normal country” has
been put to the test mid-way through his term. In early May, the currency
tumbled to a record low against the greenback, forcing the central bank to
raise key interest rates thrice within a week to 40% to shore it up. Mr. Macri
even sought a multi-billion loan from the IMF, a deeply sensitive move given
the once-hostile relations with the lender and a public apprehensive about the
institution’s overall mission. The most recent crisis in Latin America’s third
largest economy — the 2001-02 default to the tune of $95 billion, the largest
in the world — had unleashed hyperinflation, social unrest and political
instability. When the then socialist President, Néstor Kirchner, took an
aggressive stance vis-Ã -vis investors, the country was effectively closed from
global money markets for a prolonged period. Then, at the height of its
economic collapse earlier this decade, Mr. Kirchner’s wife and successor,
Cristina Fernández, lampooned the hedge funds, which held out against the
country’s debt restructuring terms, as “vultures”. Now the situation has raised
questions about the sustainability of Mr. Macri’s so-called gradualist reforms,
which were dubbed neo-Keynesian rather than neoliberal.
With the treasury minister
recently hinting at further fiscal tightening, there are signs of a shift in
tone, if not the overall policy. Conversely, Mr. Macri has been prudent to
promise continuity with his cautious approach to regulate subsidies and to legislate
tax and pension reforms. The era of economic profligacy that was propped up by
the commodities boom in the last decade is probably history now. At the same
time, no price is too high to avert a repeat of the horrors of the social
upheavals of more recent years. Occupying a centrist platform, Mr. Macri is,
however, better placed than most other politicians in the country to negotiate
a path ahead to balance conflicting interests.
Vocabulary
Recurrent: occurring often or
repeatedly.
Example: She had a recurrent dream
about falling
Concern: a matter of interest
or importance to someone.
Example: Oil reserves are the concern
of the Energy Department
Synonyms: responsibility, business, affair, charge, duty, job, province, preserve
Optimistic: hopeful and confident
about the future.
Example: The optimistic mood of the
sixties
Synonyms: hopeful, confident, positive, cheerful, cheery, sanguine, bright, buoyant
Narrative: a spoken or written
account of connected events
Example: The hero of his modest
narrative
Synonyms: account, chronicle, history, description, record, report, story
Prevail: prove more powerful
than opposing forces
Example: It is hard for logic to
prevail over emotion
Synonyms: win, win
out/through, triumph, be victorious, carry the day, come
out on top
Tumble: fall suddenly,
clumsily, or headlong.
Example: She pitched forward,
tumbling down the remaining stairs
Synonyms: fall (over), fall
down, topple over, lose one's balance, keel over
Apprehensive: anxious or fearful
that something bad or unpleasant will happen.
Example: He felt apprehensive about
going home
Synonyms: anxious, worried, uneasy, nervous, concerned, agitated, tense
Unleash: release from a leash
or restraint.
Example: We unleashed the dog and
carried it down to our car
Synonyms: let
loose, release, (set) free, unloose, untie, unchain
Lampoon: a speech or text
criticizing someone or something in this way.
Example: Does this sound like a
lampoon of student life?
Synonyms: satire, burlesque, parody, skit, caricature, impersonation
Prudent: acting with or showing
care and thought for the future.
Example: No prudent money manager
would authorize a loan without first knowing its purpose
Synonyms: wise, well
judged, sensible, politic, judicious, sagacious
Negotiate: try to reach an
agreement or compromise by discussion with others.
Example: His government's willingness
to negotiate
Synonyms: discuss
terms, talk, consult, parley, confer, debate
