User:BestofLAandBay/Economy of Argentina

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Argentina is the second largest economy in all of Latin America, in second-place after Brazil. Its agricultural export sector is the highest in the world, producing soybeans and wheat at quantifiable levels, and it benefits from natural resources that lie on the basin of the Rio de la Plata.

History
Before the 1880s, Argentina was a relatively isolated backwater, dependent on the salted meat, wool, leather, and hide industries for both the more significant part of its foreign exchange and the generation of domestic income and profits. From 1880 to 1905, this expansion resulted in a 7.5-fold growth in GDP during its most vigorous period, averaging about 8% annually. One important measure of development, GDP per capita, rose from 35% of the United States average to about 80% during that period. After 1862, Argentina was experiencing economic growth from the inflow of foreign capital as well as more immigration, primarily from Italy, Spain, and Central Europe. Foreigners working in areas of agriculture and husbandry could avail of a fast track to citizenship in Argentina . The Argentine economy began to experience swift growth after 1880 through the export of livestock and grain raw materials, and British and French investment, marking the beginning of a fifty-year era of significant economic expansion and mass European immigration. Growth then slowed considerably, such that by 1941 Argentina's real per capita GDP was roughly half that of the U.S. Even so, from 1890 to 1950, the country's per capita income was similar to that of Western Europe; although income in Argentina remained considerably less evenly distributed. The country has had exceptional productivity in its agro-pastoral export sector since the 19th century. From 1880 to 1905, this expansion resulted in a 7.5-fold growth in GDP during its most vigorous period, averaging about 8% annually. European immigrants settled in the areas north of the city of Buenos Aires, living in the warm climate alongside large indigenous populations, with a focus on settled agriculture rather than resource extraction .

From 1880 to 1905, this expansion resulted in a 7.5-fold growth in GDP during its most vigorous period, averaging about 8% annually. One important measure of development, GDP per capita, rose from 35% of the United States average to about 80% during that period. Growth then slowed considerably, such that by 1941 Argentina's real per capita GDP was roughly half that of the U.S. Even so, from 1890 to 1950, the country's per capita income was similar to that of Western Europe; although income in Argentina remained considerably less evenly distributed. According to a study by Baten and Pelger and Twrdek (2009), where the authors compare anthropometric values, i.e., height with real wages, Argentina's GDP increased for the decades after 1870. Before 1910 however, the heights have been left unaffected. This, in turn, suggests that the increase in the population's welfare did not occur during the income expansion of the given period.

The Great Depression caused Argentine GDP to fall by a fourth between 1929 and 1932. Having recovered its lost ground by the late 1930s partly through import substitution, the economy continued to grow modestly during World War II (contrary to the recession caused by the previous world war). The war led to reduced availability of imports and higher prices for Argentine exports that combined to create a US$1.6 billion cumulative surplus, a third of which was blocked as inconvertible deposits in the Bank of England by the Roca–Runciman Treaty. '''Argentina placed import duties on mechanical and agricultural implements; rice, raw and manufactured silk each totaled to be about 15%. Sugar, coffee, mate, tea, cocoa, and other provisions made up 20% of the economy’s primary imported goods. Linen, liquors, wines, beer, and tobacco were relatively all 30%, with wheat at about $3'''. Benefiting from innovative self-financing and government loans alike, value-added in manufacturing nevertheless surpassed that of agriculture for the first time in 1943, employed over 1 million by 1947, and allowed the need for imported consumer goods to decline from 40% of the total to 10% by 1950. The low labor productivity, the lack of economies of scale, and slow growth in importing machinery during World War I were all evidence of the country’s inability to maintain and develop the technological capabilities needed to sustain industrialization .

However, the economy declined during the military dictatorship from 1976 to 1983 and for some time afterward. The dictatorship's chief economist, José Alfredo Martínez de Hoz, advanced a corrupt, anti-labor policy of financial liberalization that increased the debt burden and interrupted industrial development and upward social mobility. Over 400,000 companies of all sizes went bankrupt by 1982, and neoliberal economic policies prevailing from 1983 through 2001 failed to reverse the situation.

Record foreign debt interest payments, tax evasion, and capital flight resulted in a balance of payments crisis that plagued Argentina with severe stagflation from 1975 to 1990, including a bout of hyperinflation in 1989 and 1990. Attempting to remedy this situation, economist Domingo Cavallo pegged the peso to the U.S. dollar in 1991 and limited the money supply's growth. His team then embarked on a path of trade liberalization, deregulation, and privatization. Inflation dropped to single digits, and GDP grew by one third in four years.

Agriculture
Argentina consistently ranks as one of the world's major agriculture producers, ranking among the top producers ''in agriculture exportation. Examples include soybeans, beef, honey, maize, wheat, squash, sunflower seeds, and Yerba mate, which is the country's dominantly sold commodity.''

In 2018, Argentina was the largest soy producer of soy in the world, with 37.7 million tons produced (behind only the US and Brazil); the 4th largest in maize; the 12th largest in wheat; the 11th largest in sorghum; and the 10th largest in grape production. Other important exports are banana, garlic, grapefruit, artichoke, olives, and carrot .

Soy and its byproducts, mainly animal feed and vegetable oils, are major export raw materials with one fourth of the total; cereals added another 10%. Cattle-raising is also a major industry, though mostly for domestic consumption; beef, leather and dairy were 5% of total exports. '''Meat production and grazing in Latin America had different effects on domestic agriculture; by U.S standards, beef and other forms of meat production were requirements for centralized ownership. Financialization was profiting off agricultural goods, and it intensified the exploitation of food workers . Cattle production began to be closed as mixed agriculture gave way to specialization in feed grains, which undermined the viability of self provisioning of meat, milk, lard and other commodities in the rural parts of Latin America'''

Sheep-raising and wool are important in Patagonia, though these activities have declined by half since 1990. Biodiesel, however, has become one of the fastest growing agro-industrial activities, with over US$2 billion in exports in 2011. Fruits and vegetables made up 4% of exports: apples and pears in the Río Negro valley; rice, oranges and other citrus in the northwest and Mesopotamia; grapes and strawberries in Cuyo (the west), and berries in the far south. Cotton and tobacco are major crops in the Gran Chaco, sugarcane and chile peppers in the northwest, and olives and garlic in the west. Yerba mate tea (Misiones), tomatoes (Salta) and peaches(Mendoza) are grown for domestic consumption. Organic farming is growing in Argentina, and the nearly 3 million hectares (7.5 million acres) of organic cultivation is second only to Australia. Argentina is the world's fifth-largest wine producer, and fine wine production has taken major leaps in quality. A growing export, total viticulture potential is far from having been met. Mendoza is the largest wine region, followed by San Juan. Government policy towards the lucrative agrarian sector is a subject of, at times, contentious debate in Argentina. A grain embargo by farmers protesting an increase in export taxes for their products began in March 2008, and, following a series of failed negotiations, strikes and lockouts largely subsided only with the 16 July, defeat of the export tax-hike in the Senate.

Foreign Trade
In 2020, Argentina was the 46th largest exporter (by merchandise exports) in the world (US$65 billion), 0.3% of the global total. Argentine exports are fairly well diversified. However, although agricultural raw materials are over 20% of the total exports, agricultural goods still account for over 50% of exports when processed foods are included. Soy products alone (soybeans, vegetable oil) account for almost one fourth of the total. Cereals, mostly maize and wheat, which were Argentina's leading export during much of the twentieth century, make up less than one tenth now. '''Governments helped regulate the economies with agricultural exportation into the country and their relations to the European states was the basis for a real international system. The traditional colonial exchange between the manufactured goods and exotic products paved a way for a new international division of labor for the European working class that immigrated to Latin America .''' Industrial goods today account for over a third of Argentine exports. Motor vehicles and auto parts are the leading industrial export, and over 12% of the total merchandise exports. Chemicals, steel, aluminum, machinery, and plastics account for most of the remaining industrial exports. Trade in manufactures has historically been in deficit for Argentina, however, and despite the nation's overall trade surplus, its manufacturing trade deficit exceeded US$30 billion in 2011. Accordingly, the system of non-automatic import licensing was extended in 2011, and regulations were enacted for the auto sector establishing a model by which a company's future imports would be determined by their exports (though not necessarily in the same rubric).

A net energy importer until 1987, Argentina's fuel exports began increasing rapidly in the early 1990s and today account for about an eighth of the total; refined fuels make up about half of that. Exports of crude petroleum and natural gas have recently been around US$3 billion a year. Rapidly growing domestic energy demand and a gradual decline in oil production, resulted in a US$3 billion energy trade deficit in 2011 (the first in 17 years) and a US $6 billion energy deficit in 2013. '''Nestor Kirchner's administration was a fundamental pillar of management when he incentivized resources to be released, executed, and financed into public policies. Multilateral credit agencies were avoided, allotting more autonomy in economic policies. He introduced a new taxation system for agricultural exports that raised the amount of export duties on soybean production from 35% to 44% .'''

Argentine imports have historically been dominated by the need for industrial and technological supplies, machinery, and parts, which have averaged US$50 billion since 2011 (two-thirds of total imports). Consumer goods including motor vehicles make up most of the rest. Trade in services has historically in deficit for Argentina, and in 2013 this deficit widened to over US$4 billion with a record US$19 billion in service imports. The nation's chronic current account deficit was reversed during the 2002 crisis, and an average current account surplus of US$7 billion was logged between 2002 and 2009; this surplus later narrowed considerably, and has been slightly negative since 2011.

Issues
The economy recovered strongly from the 2001–02 crisis, and was the 21st largest in purchasing power parity terms in 2011; its per capita income on a purchasing power basis was the highest in Latin America. A lobby representing US creditors who refused to accept Argentina's debt-swap programmes has campaigned to have the country expelled from the G20. These holdouts include numerous vulture funds which had rejected the 2005 offer, and had instead resorted to the courts in a bid for higher returns on their defaulted bonds. These disputes had led to a number of liens against central bank accounts in New York and, indirectly, to reduced Argentine access to international credit markets. Following 25 years of boom and bust stagnation, Argentina's economy doubled in size from 2002 to 2013, and officially, income poverty declined from 54% in 2002 to 5% by 2013; an alternative measurement conducted by CONICET found that income poverty declined instead to 15.4%. Poverty measured by living conditions improved more slowly, however, decreasing from 17.7% in the 2001 Census to 12.5% in the 2010 Census. Argentina's unemployment rate similarly declined from 25% in 2002 to an average of around 7% since 2011 largely because of both growing global demand for Argentine raw materials and strong growth in domestic activity. '''The authors choose to argue concepts that aren't limited to the agrarian crisis of Latin American exported commodities, but rather discuss how the system is lacking systemic validity, and circular policies that could benefit economically and environmentally. They focused on implementing viable ways of restoring land to the people, like increasing residual biomass of food waste.''' Given its ongoing dispute with holdout bondholders, the government has become wary of sending assets to foreign countries (such as the presidential plane, or artworks sent to foreign exhibitions) in case they might be impounded by courts at the behest of holdouts.