A year ago, Argentina was the darling of global investors. So much so that, when it issued a pioneering 100-year bond with a yield of just 7.9 per cent, investors gobbled it up, ignoring the fact that the country has defaulted eight times in the past 200 years.
Whoops! This week President Mauricio Macri asked the IMF for help, after the peso tumbled to record lows. And that century bond? After rising to 105 per cent of its face value late last year, it is now trading nearer to 85 per cent.
This is deeply painful for the Macri government — and for long-suffering Argentine voters who hoped that “gradualist” reforms could deliver an exit from years of economic turmoil, indebtedness and decline. But there is a silver lining too, at least for the wider world: Argentina’s turmoil could offer a timely wake-up call about the bigger challenges in 2018.