Argentina is in a complex situation with no easy way out. Perhaps it may be one of the few countries that was once considered “developed” and, with time and bad decisions, became “underdeveloped.” Once European migrants, looking for a better future, did not migrate to North America, but rather Argentina, a promising nation with vast resources, strong institutions and a fast-growing economy. Now Argentina is just the uncared-for remains of what once was a great nation.

In 1945, with the rise to power of General Juan Domingo Peron, the Argentinean “economic miracle” ended. Peron, a left-wing populist, whose statism, interventionism and wealth distribution policies led to the country’s economic collapse. Since then, however, Peron has maintained an iconic image and is idolized by multiple Argentinian politicians until this day. The “Peronistas”, as they call themselves, have ruled Argentina for most of the past sixty years.

Then 2015 arrived, and Argentinians demanded change. After years of Peronist rule, the economy was in a deep recession, inflation was out of control and corruption scandals dominated the covers of newspapers. Mauricio Macri, a center-right businessman who promised to change the policies implemented by the Peronists and promote free trade, lower government spending, and controlled inflation, was elected president. Macri’s first two years in power were a success. From 2015 to 2017 foreign direct investment doubled, inflation sharply decreased, and investors all over the globe were rushing into Argentina.

Macri’s success was reflected in the 2017 midterm elections when his party, Cambiemos, gained seats in both chambers of Congress. The result was considered a massive victory for Macri and another hit to Peronism. It seemed like Argentina was finally following the right path, the path back to the great nation of old.

During the first half of 2018, a drought hit the southern hemisphere. Countries such as Australia, South Africa and Argentina were affected by the phenomenon. Recall the fact that agricultural products make close to 40 percent of Argentina’s total exports. Therefore, with the drought, the nation’s exports notably decreased causing the trade deficit to widen from $554 million to $1.28 billion in a single quarter. According to Bloomberg, Macri was banking on a near-record soybean crop to drive economic growth of 3.5 percent in 2018. Evidently, he was too optimistic.

Soon after, the Argentinian peso experienced selling pressures and inflation started to kick in. One August afternoon, Macri committed, in my opinion, a terrible mistake in a desperate attempt to maintain the peso’s value. He announced that he had reached an agreement with the IMF to speed up the payments of a previously agreed bailout. In exchange, he agreed to implement austerity measures such as decreasing social benefits and not interfering in the currency market. The announcement gave investors a clear signal: The Argentinian government is experiencing difficulties. The market’s reaction was as expected— the peso reached a record value of 40 pesos per dollar and, consequently, inflation soared.

On Sept. 25, worker’s unions announced a national strike. The country was paralyzed as workers demanded primarily price control, higher benefits, and cut ties with the IMF. Historically, Argentina’s unions have been powerful and have gathered significant political influence during Peronist governments. As social unrest increases, Macri’s popularity has experienced a decline in the polls and an election awaits in late 2019.

Macri finds himself in a highly complex situation. Either he keeps austerity measures and follows the IMF’s demands or he follows the unions’ demands and returns to the Peronist policies that have previously devastated Argentina. If he chooses the first option, Argentina might benefit in the long run, but the short-term political impact that this decision will have on Macri and Cambiemos will be too high considering the upcoming election. On the other hand, Macri and his government might choose to satisfy the unions’ demands and gain political popularity as the Peronists did. This decision, however, might have a catastrophic effect on Argentina’s economy as it will return to the policies that have dominated Argentinian politics since the time of Peron.

In my opinion, Macri and Argentinians must take a leap of faith. Macri must maintain austerity policies and must cooperate with the IMF. He must also make sure that his government opens the nation’s economy to the world with free trade deals that will have a positive impact on Argentinians. The people of Argentina must understand that the long-term benefits of such a plan outweigh the short-term drawbacks and must give Cambiemos another chance.