Kirchner is doing something that no one has done in the history of Argentina in the last 50 years. He’s created a surplus. While all of his predecessors poorly managed, issued worthless money, and got themselves even deeper into debt, Kirchner has taxed the country to a point where he now sits on the biggest fiscal surplus in the world. The fiscal prudence of Kirchner, combined with a generous social policy, is one of the greatest achievements during his presidency. However, it’s a strategy that represents an enormous danger for him and the country.

After renegotiating the country’s public debt with great skill, obtaining a huge release, and creating an unbelievably profitable tax house for the country, the Kirchner administration is accumulating more and more reserves by the day. However, although it may be a security blanket for Kirchner, it could become a big incentive for a rival politician to start planning his move towards the presidency.

Just like the stockholders of Microsoft get bigger dividends as the company achieves higher earnings (or those of IBM in its day), in a few years, Kirchner’s future presidential rivals will base their campaigns on the promise of sharing the country’s dividends among their constituents.

And just like Bush wasted the Clinton-era surplus in his military adventures, and managed to bring the economy to a screeching halt, Kirchner’s successor would be able to derail the country’s economic growth with a populist based policy based on spending all of the savings that Kirchner has managed to accumulate.

Follow Martin Varsavsky on Twitter: twitter.com/martinvars

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gabriel on May 26, 2005  · 

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