USA praises Macri as Argentina tries to break economic isolation

Bloomberg

Barack Obama became the first U.S. president to visit Argentina in more than a decade as his counterpart, Mauricio Macri, seeks a rapprochement with the international community following a decade of financial and diplomatic
isolation.
Obama, arriving from an historic state visit to Cuba, met with Macri and is scheduled to attend a business forum in Buenos Aires before visiting the southern city of Bariloche on Thursday. Macri, in a joint news conference in Buenos Aires, described Obama as “inspiring” and said the two countries shared common values.
Obama got a warmer reception than his predecessor, George W. Bush, who during a Summit of the Americas held in Mar del Plata in 2005 was snubbed by former President Nestor Kirchner and faced the scorn of then Venezuelan President Hugo Chavez. Macri, whose victory in elections in November ended 12 years of government by Kirchner and his wife, Cristina Fernandez de Kirchner, is seeking to rebuild Argentina’s reputation abroad, Cabinet Chief Marcos Pena said before the visit.
“President Macri is a man in a hurry,” Obama said in the news conference. “I’m impressed because he has moved rapidly on so many of the reforms that he promised, to create more sustainable and inclusive economic growth and to reconnect Argentina with the world economy.”
Macri, who has removed foreign currency controls and export tariffs on most agricultural products and is close to sealing a deal with holdout creditors led by Paul Singer’s Elliott Management Corp., has said he expects Argentina’s change of direction to attract $20 billion in foreign investment this year.

‘Recalcitrant Debtor’
Argentina, which defaulted in 2014 after refusing to obey a New York court ruling ordering it to pay holdouts from a 2001 default in full, was described by the U.S. Court of Appeals in 2013 as “a uniquely recalcitrant debtor” and has often been accused of moving the goalposts for investors.
Obama will view Macri as an ally following a decade in which the U.S. has been frozen out of some portions of the region by the rise in anti-capitalist sentiment in countries such as Venezuela, Ecuador and Bolivia.
Relations with Argentina got so bad that at one point Fernandez even dropped hints there were plans to assassinate her, saying that “if something happens to me, don’t look east, look north.”
“For the Argentine government this is a visit that is transcendental to show a more Western profile,” Juan Gabriel Tokatlian, a professor in international relations at Torcuato Di Tella university in Buenos Aires, said by phone. “It’s also transcendental for the U.S. because this is the first government in the region to triumph against what some have nicknamed the pink tide.”

Long Journey
Anti-U.S. sentiment in Argentina is still strong amid perception of complicity with the military dictatorship that ruled the country from 1976 to 1983. That’s been exacerbated by the timing of Obama’s trip, which falls on the 40th anniversary of the military coup. In a bid to assuage the situation, Obama’s administration, at the request of the Argentine government, said it will declassify military and intelligence records on the coup.
“President Obama’s visit is very important for us because it shows the interest and priority that the U.S. administration has placed in President Macri’s government,” Foreign Minister Susana Malcorra said in a news conference in Buenos Aires. “I always like to demystify these visits because it’s not as if with the presence of President Obama that everything is miraculously resolved. It’s the beginning of a journey, but it’s a very auspicious beginning.”
Obama arrived with an entourage of 750 people, among them businessmen and officials. The two governments signed a series of accords on security, trade and efforts to combat money laundering.
Still, the Argentine government’s expectation that Obama’s visit will accelerate a wave of investment in the country may be overoptimistic, said Tokatlian. That will depend more on Macri’s ability to close the largest fiscal deficit in almost two decades and rein in inflation of over 30 percent, he said.
Malcorra on Monday sought to temper expectations about the visit, saying that no immediate results in terms of investment should be expected.