Peru's Export Boom Offers Lessons for Argentina's Maverick New President
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Argentina's new libertarian president Javier Milei wants to implement sweeping economic reforms like dollarization, but should look to Peru's economic model instead.
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Peru has enjoyed decades of economic stability and growth despite political instability. Its currency, the sol, has been stable against the dollar since the 1990s.
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Factors underlying the sol's strength include the independent central bank, export growth, foreign investment, and accumulation of sizable currency reserves.
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In contrast, Argentina has suffered from fiscal deficits financed by the central bank and protectionist policies deterring investment and exports.
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Milei's confrontational governance style and dollarization proposal fail to address Argentina's underlying economic issues; Peru provides a better model of export-led growth with a trusted independent central bank.