Argentina must make the most of its upcoming G-20 spotlight

In 2016, when Argentina outmaneuvered India to host this year’s Group of 20 (G-20) summit, Argentina’s new government was riding high and the prospect for a successful meeting seemed assured.

In Washington, President Obama was a champion of the G-20’s free-trade agenda. In Buenos Aires, the economic opening, after a decade of populism, was raising expectations of a South American renaissance. 

Today, as Argentina makes final preparations for the Nov. 30-Dec. 1 summit, it is easy to imagine that President Mauricio Macri regrets raising his hand to host.

Under President Trump, U.S. protectionism has upended G-20 decision-making, raising the prospect of diplomatic clashes in Buenos Aires. (In this regard, Trump’s recent Paris travels were not reassuring.)

Meanwhile, Argentina’s economic rebirth proved short-lived. Following a collapse of the peso this year, the country is suffering from recession and 40-percent inflation. These days, the government, a one-time Wall Street darling, is supervised by the International Monetary Fund (IMF), which is lending a record $56 billion to keep the country afloat.

For Argentina’s coming-out party, this is hardly the transformational image Macri hoped to project to the world. By now, Argentina was supposed to be thriving under its pro-market policies, and the G-20 gathering was designed to showcase reforms and attract foreign investment.

Instead, the high-profile gathering of world leaders is an embarrassment for Argentina. Rather than construction cranes, world leaders will find demonstrators throughout Buenos Aires who protest rising joblessness and poverty. Nevertheless, the summit need not be a total loss for Argentina.

After all, the annual gathering comes at a time when Argentina desperately needs international support. Maintaining IMF loan disbursements will require the goodwill of its leading creditors, which are all members of the G-20.

Public encouragement from G-20 leaders could also increase confidence in Argentina’s turnaround, helping its government return to capital markets. G-20 members represent 85 percent of the global economy and 66 percent of the world’s population.

Finally, Argentina’s shot at global leadership could also rekindle interest among foreign investors, whose projects are essential to reigniting economic growth, and it could compensate for steeply diminished public investment in infrastructure required by IMF-imposed budget cuts.

Despite the setbacks he has endured, Macri is adept at building relationships with his counterparts on the global stage. He has established a good rapport with President Donald Trump while also deepening ties to Chinese President Xi Jinping.

Diplomatic protocol makes it difficult for visiting leaders to deny Macri a one-on-one meeting, giving him a chance to lobby for public displays of admiration. 

From Donald Trump and Xi, Macri will have even bigger requests, including renewed access to the U.S. biodiesel market and a multibillion-dollar expansion of Beijing’s line of credit. 

Finally, the summit offers Argentina a chance to make progress on one of Macri’s long-standing goals — membership in the Organization for Economic Cooperation and Development (OECD). 

Following aggressive lobbying, Argentina has reportedly won unanimous support for its candidacy in the 36-member organization, thanks in part to strong backing from the White House.

The G-20 summit will give Macri a chance to persuade European members to start Argentina’s qualification exercises without waiting for feuding OECD members to agree on the fate of other potential candidates. 

Clearly, Argentina is not poised for the grand G-20 rollout Macri envisioned when he took office in late 2015. But there are reasons to believe the G-20 could still be a success for his administration. Though Argentina is on its knees, it might find a bright side to its moment in the spotlight. 

Benjamin N. Gedan is a the director of the Argentina Project at the Woodrow Wilson International Center for Scholars and an adjunct professor at Johns Hopkins. He is a former South America director on the National Security Council at the White House.

Christopher Phalen is a researcher at the Wilson Center.