Name the country whose economy despite the global recession nevertheless expanded 9.2 percent in 2010 and has kept growing in 2011 at an annual rate of about 8 percent.
Still unsure? The nation defaulted on part of its external debt, roughly $93 billion, at the beginning of 2002 after undergoing three years of brutal recession.
Argentina, Latin America's third largest economy. Quite a turnaround in nine years, when the nation quickly became a pariah state, foreign investment fled the country, and capital flow towards Argentina ceased almost completely. The government then decoupled the Argentine peso's parity with the U.S. dollar, tanking its value, depleting the Central Bank's foreign currency reserves and producing higher than average inflation.
So, how did Buenos Aires resolve the situation?
Essentially by staring down the World Bank and International Monetary Fund, which delivered dire pronouncements about Argentina's fiscal future if it did not honor its debts in full. The Argentine government remained firm and eventually refinanced its debt under a deal whereby 76 percent of the defaulted bonds were exchanged by others, of a much lower nominal value (25-35 percent of the original) and at longer terms, some of which were indexed on the future economic growth of Argentina.
Needless to say, there was still prolonged squealing by some of the private debt holders, with the International Monetary Fund assuming the role of advocate,…