Douglas Farah has a fascinating piece in Foreign Policy detailing the latest on Argentina’s financial follies. I’ve heard of many ways that governments have tried to acquire foreign currency, but I didn’t realize that Argentina had turned to encouraging money laundering in their quest for dollars.
Having suffered a 20% fall in foreign exchange reserves in recent months, the Argentine government passed a law last week that essentially “invited money launderers from around the world to put their dollars in Argentine banks with no questions asked.”
Not everyone was in favor of such a drastic move. The auditor general, for instance, urged the Senate not to pass the law and “called the measure a huge invitation for criminal groups to have their money “legitimized through fictitious companies.” Indeed.
Apparently, there have already been money laundering concerns about the country. Farah notes that the “State Department had already expressed concern that “money laundering related to narcotics trafficking, corruption, contraband, and tax evasion occurs throughout the [Argentine] financial system” and that “Senior members of the Fernández de Kirchner government are currently involved in a widely reported roiling money laundering scandal in which the president’s deceased husband and predecessor as president, was allegedly involved.”
There is much more reason for pessimism though–definitely check out the original piece because it has lots of interesting details about the group of young Peronists known as “La Cámpora,” (whose leader is Maximo Kirchner, the president’s son) who are the proud “architects” of great policies such as this.