February 4, 2013
WHEN YOU CAN’T TRUST THE NUMBERS: Argentine Statistical Hanky Panky Draws IMF Censure.
Argentina, the only country in the world that threatens private economists with jail terms for disputing the government’s obviously bogus inflation numbers, is now the only country in the world to be censured by the IMF for unacceptably bad economic statistics. In a rare move by the 24 member board of the world’s most prestigious financial institution, Argentina’s government was censured for failing to improve the quality of the numbers it uses to calculate things like GDP and, especially, the inflation rate.
The current president’s husband fired the professional economists in the statistical office in 2007. Ever since, the patent bogosity of Argentina’s statistics has undermined the government’s credibility at home and abroad. Inflation is a deadly sensitive subject in Argentina, where past bouts of hyperinflation have wiped out the savings of whole generations. Currently the government claims inflation is no higher than 11 percent; when the thought police aren’t watching them, private economists whisper that the real rate is more than 25.
The statistical chicanery isn’t just for political window dressing; thanks to unrealistically low inflation numbers Argentina has been able to defraud holders of inflation-linked bonds of about $6.8 billion since the games began in 2007, suggests a report in Bloomberg BusinessWeek.
Nature intends for Argentina to a rich country like Canada, and gave it everything needed for prosperity, but a deeply dysfunctional political culture continues to frustrate the plan.
Luckily, nothing like that could ever happen here.