Omar Suarez is Argentine. They call him “El Caballo” or hard-charging horse. Nothing used to move on his sector of the Parana River without some form of patronage making its way into his pocket. The influence that Suarez projected waned abruptly when he was imprisoned last year. The case is indicative of the grinding corruption that the Macri government aims to dislodge. Uprooting this widespread, implicit tax on the economy could have stunning implications for growth. A $100,000 concession to the likes of El Caballo now turns into capital investment for a small enterprise. Investors get it; the local stock-market index is up some 27% in US dollar terms since the beginning of 2017. They are enthusiastic for good reason. But authorities could fail to meet expectations, given the weight of the task at hand. According to Transparency International’s Corruption Perceptions Index, Argentina ranks 95th globally. That position is worse than South Africa, but better than Russia. ■
Our Vantage Point: Economic growth in Argentina may reach 2.5% this year. With a stronger-than-average estimate for Latin America, there is some cushion for disappointment in the pace of reform. But the Macri government will push hard in advance of legislative elections to be held in October.
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