Economic history of Argentina

[9] The era of import substitution ended in 1976, but at the same time growing government spending, large wage increases, and inefficient production created a chronic inflation that rose through the 1980s.

[9] In the early 1990s, the government reined in inflation by implementing a currency board system and introducing a new convertible peso equal in value to the U.S. dollar and privatized numerous state-run companies using part of the proceeds to reduce the national debt.

[12] The period between the 16th and the end of the 18th century was characterized by the existence of self-sufficient regional economies separated by considerable distances, a lack of road, maritime or river communications, and the hazards and hardship of land transport.

Dutch and Basque merchants in particular played an important role, in partnership, in managing the system of navíos de registro to conduct trans-Atlantic trade with Buenos Aires.

[17] Argentinian historian Zacarías Moutoukias argues that this system of trade, in which Buenos Aires was linked with the mining economy of the Andes through the situado and to cross-Atlantic trade through contraband and the navíos de registro, created an integrated political and commercial elite in Buenos Aires, made up of military officers, Crown officials and local merchants, and a political economy in which “corruption”— that is, the violation of royal laws regarding trade— was not an aberration but rather a defining characteristic.

[19] Norberto Galasso and Enrique Rivera consider that it was neither capitalist nor feudalist, but a hybrid system result of the interaction of the Spanish civilization, on the transition from feudalism to capitalism, and the natives, still living in prehistory.

[20] Only activities associated with a dynamic exporting centre enjoyed some degree of prosperity, as occurred in Tucuman, where cloth was manufactured, and in Córdoba and the Litoral, where livestock was raised to supply the mines of Upper Peru.

In the seventeenth century, this included the development of textile workshops (obrajes), the raising of mules for transport and the hunting of feral cattle herds to produce meat, leather and tallow— all of these economic activities supplied the mining economy of Potosí in the Andes.

To achieve their economic objectives, Britain initially launched the British invasions of the Río de la Plata to conquer key cities in Spanish America but they were defeated by the local forces of what is now Argentina and Uruguay not once but twice without the help of Spain.

[25] The first Argentine historians, such as Bartolomé Mitre, attributed the free trade to The Representation of the Hacendados economic report by Mariano Moreno, but is currently considered the result of a general negotiation between Britain and Spain, as reflected in the Apodaca-Canning treaty of 1809.

[26] Compared to other parts of Latin America, slavery played a much lesser role in the development of the Argentine economy, mostly because of the absence of gold mines and sugar plantations, which would have demanded huge numbers of slave workers.

[38] After Rivadavia resigned in 1827, ending the "happy experience", the federalist Manuel Dorrego assumed power as governor of Buenos Aires, but was soon executed by the unitarist Juan Lavalle during a military coup.

[41] Forbes's testimony should be appraised in perspective of the contemporary Anglo-American commercial rivalry, In light of the partial nature of the account and of his "jealousy, even antipathy" towards the English in Rio de la Plata.

[51] The end of the civil wars provided the political and legal stability necessary to assert property rights and cut transaction costs, contributing to the huge inflows of capital and labor resources that built modern Argentina.

[9] "In spite of its enormous advance which the Republic has made within the last ten years, the most cautious critic would not hesitate to aver that Argentina has but just entered upon the threshold of her greatness."

[58] Foreign investment in Argentina came to a complete standstill from which it never fully recovered:[82] Great Britain had become heavily indebted to the United States during the war and would never again export capital at a comparable scale.

[84] As a consequence, investable funds became increasingly concentrated in a single institution, the Banco de la Nacion Argentina (BNA), creating a financial system vulnerable to rent-seeking.

[106] Wartime reserves enabled the Peronist government to fully pay off the external debt in 1952; by the end of the year, Argentina became a net creditor to the tune of US$5 billion.

[113] A suggested cause is that a multitude of frequently changed regulations, at times extended to ridiculous specifics (such as a 1947 decree setting prices and menus for restaurants), choked economic activity.

[121] A gradual reversal in trade policy culminated in the military announcing import substitution as a failed experiment, lifting protectionist barriers and opening the economy to the world market.

[82] When the military dictatorship finance minister José Alfredo Martínez de Hoz assumed power, inflation was equivalent to an annual rate of 5000%, and output had declined sharply.

[127] While developments looked positive for a while, an IMF staff team visiting Buenos Aires in August 1983 discovered a variety of problems, particularly a loss of control over wages affecting both the budget and external competitiveness, and the program failed.

[137] The uneven implementation of fiscal adjustments and reforms, a worsening global macroeconomic environment, and political instability led to the complete loss of market access and intensified capital flight by the second quarter of 2001.

[136] At the end of December, in a climate of severe political and social unrest, the country partially defaulted on its international obligations; in January 2002, it formally abandoned the currency convertibility regime.

[147] Various sectors of the economy were re-nationalized, including the postal service (2003), the San Martín Railway line (2004), the water utility serving the Province of Buenos Aires (2006)[148] and Aerolíneas Argentinas (2009).

[172] In July 2014, a ruling from a New York court ordered the country to pay the remaining holders of the bonds defaulted in 2001, which by then were mostly American Vulture funds, before it paid any of its exchange bondholders.

[182] In December 2015, the government announced the elimination of export restrictions for wheat, maize and meat, while reducing withholding taxes on soybeans to 30% at a fiscal cost of 23,604 million pesos.

To the cause of the quarantine in 2020, in April, 143,000 SMEs will not be able to pay salaries and fixed expenses for the month, even with government assistance, so they will have to borrow or increase their capital contribution, and approximately 35,000 companies consider closing their business.

[197] According to Di Tella and Zymelman (1967), the main difference between Argentina and other settler societies such as Australia and Canada was its failure to seek adequate alternatives to compensate for the end of geographical expansion with the definitive closing of the frontier.

[198] Taylor (1992) pointed out that the relatively high dependency ratio and the slow demographic transition in Argentina led to a reliance on foreign capital to offset the resulting low savings rate.