El Sur del Sur
The Southernmost South
Mining and Power
Transportation and Communications
The Rise and Transformation of the Agricultural Export Model
Diversification Industry The welfare State A fresh start The last attempts
Foreign Trade Exports and imports Mercosur
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.
| From late 19th century up to the beginnings of the
present century, Argentine economy was based on farming exports. The center
of business activities was located in Buenos Aires and the Littoral. The
significance of the turnover was such that, towards 1910, our country did
hold the eleventh position in the world ranking.
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.
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.
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The Southernmost South
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