El Sur del Sur
The Southernmost South
Economic Activities
Introduction
Livestock
Fishing Industry
Mining and PowerTransportation and Communications
The Rise and Transformation of the Agricultural Export Model
Diversification
Industry The welfare State
A fresh start The last attemptsForeign Trade
Exports and imports
Mercosur |
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Argentine economy followed a pattern of agricultural and livestock exports which endured from the colonial times up to the early decades of the 20th century. Then it gave rise to the production of some manufactures which stopped coming from Europe, until the establishment of industries which would mark the early path of the country.
AGRICULTURE
One of the most important branches in Argentine economy is agriculture.
It does not only meet domestic demand but its exports also account for
a fourth of the total income from goods sold abroad.
LIVESTOCK
Argentine beef, valued worldwide due to its quality and taste, accounts
for a 10 per cent of the exports, aside from its numerous by-products.
Furthermore, it fully meets domestic demand.
FISHING
For Argentine economy, fishing is an important source of income with a
great future ahead. A thousand species of fish, shellfish and mammals
are estimated to live in the Argentine Sea.
INDUSTRY
It was not until 1940 that the national industry, which had inceptively
started in the times of the Hispanic colonies, became stronger. After
suffering serious crises, today it faces the need of renewal and technological
change in order to be competitive.
MINING AND POWER
Argentina has a large mining stockpile and important power resources.
However, operation at a large scale is still an unachieved goal.
TRANSPORTATION
AND COMMUNICATIONS
Transportation and communications have started to gain a great significance
in Argentine economy. In 1990, it accounted for a 5 per cent of the Domestic
Gross Product. Technological development is the key for the increase of
this percentage. Trade balance and the overcoming of imports by exports
is a national goal in a country which seeks its place in the international
market. To keep the product quality and to lower costs are the challenge
which the country has to face.
THE RISE AND TRANSFORMATION OF THE AGRICULTURAL EXPORTS MODEL
Diversification
The fall of export supply from Europe during the First World War brought about a serious setback in the Argentine economy. Only in 1917 was there a slow recovery with manufacturing, mining and construction investment.
The 1920s came together with industrial development and the technological transformation of the countryside based on an economically liberal model, supported by the agricultural and livestock sectors. But the 1929 crisis seriously weakened the national economy.
The Welfare State
By the 1930s, some urban sectors claimed that the State should foster industrial development, and this type of industrialization began to spread during the Second World War. The replacement of exports was the key for larger foreign currency savings.
A fresh start
The above model was starting to wear out by the 1950s. There were inflation, recession and sluggishness, and the foreign debt increased. The agricultural and livestock exporters, in turn, could no longer find a market to sell their goods. The industrialists started to witness the decrease of domestic demand and their costs rose due to the increased prices of the imported factors of production.
The last attempts
The 1976 military government wanted to do away with inflation through the opening up of the economy and free trade. The outcome was the decrease of the operating capacity and a steep growth of the foreign debt. With the return of democracy by 1983, the welfare of the Argentinians had diminished dramatically. Nowadays, the role of the state is far from being focused on welfare. FOREIGN TRADE During 1995, the former 5,800 dollar shortfall could be reversed. Whereas exports went up to 17,503 millions, imports were 16,432 millions. The corresponding surplus was 1,071 millions.
Half the foreign trade volume is carried out with US, Brazil, Germany and Italy. The business transactions carried out with Asia, Africa and Oceania are near a 20 per cent. Most of the trade with bordering countries is carried out with Brazil.
Exports and Imports
Exports from Argentina are goods with little processing: fats, furs, leather, animal feed, cotton, fuels, oils and by-products. Vegetable and animal raw material accounted for a third of the export volume. Industrial goods are less than a sixth of the total exports.
Imports are basically focused on machinery, mechanical and electronic appliances and devices. Cars, chemicals, fuels, metallurgical minerals and metal manufactures are imported to a lesser extent.
Mercosur
On January 1st, 1995 Mercosur began to operate (a free trade area between Argentina, Brazil, Paraguay and Uruguay). Chile is likely to be included in a short time. This union is gaining strength and stands only after the European Union because of its relevance. Except for the products from automobile and sugar-processing industries, the rest circulates without any customs taxes. They have adopted a common tax for the imports from the rest of the world. 200 million people live in this area and the domestic turnover is 800,000 million dollars.
