Unorthodox Rebound for Argentina's Economy
USA TODAY'S David Lynch writes in todays edition about Argentina'a economy, and its recovery from the 2002 financial collapse, check it out if you are interested in Argentina's financial condition. What do you think about the governments plans to continue growth even at the high costs of inflation, or do you think they should consider slowing growth to limit inflation? You are welcome to comment through the 'post comment' link below.
Argentina's snub of conventional wisdom pays off
By David J. Lynch, USA TODAY
"The economy purrs at a growth rate of better than 8%."
"Over the past four years, Argentina has recovered its hope," says Mercedes Marco del Pont, a member of Congress.
"The biggest significance of this recovery is they just rejected the orthodox economic advice … and they've been the fastest-growing economy in the Western Hemisphere over the last five years," says Mark Weisbrot, a left-of-center economist at the Center for Economic and Policy Research in Washington.
"As the grumbling grows in Argentina's financial community, some in the government insist that the country shouldn't be judged by the same criteria as fully developed economies such as the United States or European Union. Interest rates, for example, are less important here in determining economic growth because 90% of transactions are conducted in cash."
Labels: Current Events, Living In Argentina
posted by jammer at 11/08/2007 02:19:00 PM
3 Comments:
For the 30 year period between 1973 and 2002, most leading argentine economists and politicians were very accurate in their predictions: it was always doom and gloom, and by golly, they were always right!
I believe that now there has been a fundamental change in Argentina. Optimist's will rule and will be accurate more often than not.
The old problems that kept Argentina in chains are gone, in my opinion. There is no more antagonism of Peronistas versus anti-peronistas. The military are not intervening any longer. More incredible, there is talk of a pacto social and there is a chance Cristina may pull it off.
Look at Pakistan today and you see Argentina of yesterday. Look at Chile and Spain today, and that is where Argentina is going.
The main issue here is foreign investment and infrastructure. The country is in default, and there will be no serious investments until this is resolved. Roads, rail, shipping, public transportation, airports, and energy are in dismal state.
Economics 101 - You cannot build a sustainable financial future without infrastructure
The last paragraph on the the blog about 90% of transactions done in cash is laughable... Pais Trucho.
Stop trying to servicing its unpayable foreign debt was a step in the right direction for Argentina.
The amount was so huge, that Argentina had to borrow just to fulfill part of the interest, never all of them, much less the principal.
But worse still, in order to get those loans, Argentina had to seek the approval of the IMF (International Monetary Fund), which prescribed cookie-cutter, recessive economic policies in order to vouch for the country before lenders.
When Argentina repudiated a big portion of its debt, that double leaden lifesaver was removed.
Nevertheless, I am still, in general, pessimistic about Argentina's economic future, because of the irrationality of the taxation, the inflationary mentality, and the work culture in general.
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