When in Buenos Aires, See 'Museum of Foreign Debt'

Vultures, the foreign debt board game and other Argentinian jollity.

Argentina has a wealth of attractions: The awesome natural grandeur of Perito Moreno Glacier. Ushuaia, the "end of the world" on its southern tip (next stop: the Arctic).  Tango, the dance of sultry romance. Call me weird but, as an IPE scholar, my first port of call would instead be the Museum of Foreign Debt at the University of Buenos Aires' School of Economics. I was peripherally aware that there was such a place, but a recent Bloomberg article jogged my memory:

Argentina’s fight with foreign banks and bondholders is more than just business. It’s part of the national psyche, enshrined in a special museum at the business school at the University of Buenos Aires. The Museum of Foreign Debt is nothing fancy. There are a few flimsy panels plastered with grainy photos, dates, text, and graphs.

Oh, but the saga portrayed on those panels! Banks, bond investors, and the International Monetary Fund flood crooked regimes with overpriced credit. The Argentine economy collapses, and the people suffer. International markets are roiled. It happens time and time again. The story has all the emotions of a good tango.

Argentina has reneged on foreign debt obligations at least seven times, starting in 1827. The latest was in July 2014, when Argentina defaulted rather than give in to pressure from Paul Singer of Elliott Management. The fight with Singer has been going on for a dozen years, and the term vulture investor—rather esoteric in much of the world—is now pretty much universally known in Argentina. It’s so much on people’s minds that Buenos Aires toy stores carry a homegrown board game called Vultures, packaged in a box depicting a pair of the birds picking at a pile of dollars.

The anti-foreigner attitude is well-entrenched in Argentina as demonstrated by those manning the museum:

One May morning at the debt museum, guide Antonella Fagnano, a 21-year-old business major, describes Argentines’ attitude toward default. She pauses by a black-and-white photo of the late General Jorge Videla, who led a 1976 coup that ushered in a seven-year dictatorship. Successive presidents in that period loaded up on foreign debt to finance, among other things, the 1982 Falklands War with the U.K.

Today’s Argentina, Fagnano says, has no moral obligation to make good on debts like those. In fact, it would be wrong to pay. “Foreigners financed a lot of leaders, like these dictators. They didn’t do what they were supposed to do with the money, and left future generations the debt,” she says, shaking her head. “So, of course, you cannot allow that.”

My belief remains the same: If foreigners are so evil, then why does Argentina put itself in the same position of having to borrow from abroad time and again? Therein lies my fundamental problem with structuralist theories: it is defeatist and fatalistic to assume that your inevitable fate has to be abject misery at the hands of foreigners. Why not get your economy sorted once and for all so that you won't be in a position to be "exploited" by international creditors you always resort to out of desperation?

The victim mentality--that it's never your own fault--is always easier to adopt. Foreigners may not have your best interests in mind, so continually putting yourselves at their mercy through your oafishness isn't well-advised.