Argentina Economic Crisis

Argentina Economic Crisis

The lack or the weakness of the infrastructures implies a cyclical discrimination. The hegemonic classes do not agree with the idea that the state should take charge of the infrastructures, because in this case they should at the same time allow it to adopt a reformist fiscal policy able to meet the related management costs. Indeed, the diatribe on the weakness of the state and the arrogance of its guardians finds confirmation in the economic policy imposed by the privileged classes (terratenientes and financial operators) with regard to institutional structures with a high degree of inefficiency. The State is mainly the place of transactions, of bargaining between economically aggressive groups, which condition the choices of the government and even the privileged alliances between countries with common economic interests. Internal politics is expressed by reason of foreign politics, which mainly has the task of institutionalizing the conducts inspired by the hegemonic classes.

Even in Argentina, as in other countries with late industrialization, paradoxically, industry requires the state to take on the infrastructure, financing and customs protection without effectively and fairly exercising taxation. The state therefore financed the landowning aristocracy and the rural bourgeoisie in the 19th and 20th centuries. Labor policies and trade union laws ensure rights that the market economy is unable to satisfy. On the legacy of anarchism and republicanism, introduced in Argentina by exiles and Italian immigrants (e.g. the anarchist Severino Di Giovanni, executed in 1931), the working class has reached a degree of social awareness that the multiplication of public employment and the strengthening of the middle classes have partly sacrificed to the – somewhat parasitic – principle introduced by Peronism, of stability, continuity and low performance. The economy of full employment contrasts with the laws of competitiveness and competition, which require, among other things, a continuous cognitive and technological updating. The positive result that the expansion of the so-called market democracy determines (with the creation of Mercosur, which includes Argentina, Brazil, Uruguay and Paraguay) is represented by the weakening of Praetorianism. The Castro structure, for a long time protagonist of the political affair, demonstrates an unprecedented partisan and sprawling atony.

Runaway inflation and generalized malaise constitute a permanent implosive danger that is difficult to control with forceful actions. A more insistent system of communications is also connected to this unfortunate situation, which makes the world public participate in internal events, ideologically attested in defense of civil rights and respect for the rules of democratic participation. The twilight of the dictatorships coincides with the public debt crisis, with hyperinflation, as well as with pauperisation.

Recourse to the market implies a survey of the infrastructural resources, created mainly by Great Britain and France in the period of the Argentine economy of export (in the first decades of the 20th century) of agricultural products and crafts.

The railways, the port facilities, the electricity and gas production routes are the works of the English companies, responding to an economic design that is difficult to approve in the contemporary market economy, which among other things records a different cataloging of the goods inserted in the various conduits. commercial. The conditioning of domestic industries by the world market determines a sort of progressive marginalization of Argentine products, in highly anti-industrial conditions. The contemporary market requires that the exporting countries of products (primary or manufactured) do not adapt to a regime of continuity without fearing their further dependence on external credit and on the regime of financial interventions that are less and less sensitive to the logic of solidarity.

The substitution of imported products with domestic products is slow and does not guarantee attunement with the change in customs increasingly inspired by so-called global models. The stimulation of internal consumption favors the growth of the industrial apparatus, which, in populist regimes, is subject to credit policy and the merciless laws of financial dynamics. The production of semi-finished products and subsequently the chemical industry and the technologically sophisticated one join the production of non-durable consumer goods, which uses existing natural resources. This last technological sector involves the creation of financial companies so complex as to escape the censorship of the local authorities, which end up, even for reasons of lack of competence,

The immense scenarios of Argentina, such as Patagonia, rich in natural gas reserves, would also need, in order to take off economically, an oil policy capable of satisfying the needs of the area and negotiating the external components of the sector, using them for internal development. The low competitiveness of the economic system is the cause of the chasm of public debt. The challenges of globalization have a relative impact on the restructuring of the Argentine technological apparatus.

In fact, from a report of the Eighties by the CEPAL (Economic Commission for Latin America), it is clear that the relatively more advanced Argentine industrial sector is the traditional one of non-durable consumer goods. 50% of Argentine companies are small and medium-sized (with a maximum of five and twenty employees respectively). The national market, which developed in favor of customs barriers, often turns into a monopoly due to the absence of competition capable of increasing the homogeneity of products. Large companies or modern sectors are often branches of foreign companies, benefiting from the privatization wave of the 1990s.

The drama of the public debt, which affects the Latin American area as a whole and Argentina in particular, worsened in the 1980s, following the second oil crisis, which induced industrialized countries to reduce imports and raise interest rates. interest at levels never reached since 1930. In the face of continental inflation of over 1000%, in 1989, the increase in prices in Argentina reached 4923%. 51% of Argentine exports go to cover the payment of interest on the debt contracted on the financial market. The refinancing conditions imposed on debtor countries, such as Argentina, by commercial banks and international financial institutions are of such magnitude as to cause a severe recession.

The contraction in imports by the Argentine economy entails the containment of jobs which, in the context of globalization, negatively affects the European and US propulsion systems. The nationalistic drift, which refuses to honor the debts contracted by governments formally legitimized by popular vote, represents a threat and constitutes a further process of political unbundling of the Latin American region which, conversely, tends to promote and create common economic areas, capable of facilitate the flow of labor and capital. This perspective also provides for a more balanced distribution of the active population, for the most part settled in the cities, whose hypertrophy is explained, alternatively, by the unsustainability of the job demand by the countryside and the attractiveness of modern metropolises. These, however, are almost always inadequate to ensure a decent standard of living for the generations that crowd the margins of modernity.

Argentina Economic Crisis