Argentina was once richer than Germany, Italy and France – 03/29/2023 – Market

Dramatic as a tango, Argentina’s budgetary strangulation and impoverishment in recent decades contrast with a past of wealth that can still be seen in the pleasant urban plan of Buenos Aires, with its wide avenues and sidewalks, French buildings, restaurants and cafes.

In the first 30 years of the last century, Argentina was one of the fastest growing countries in the world, attracting European immigrants by exhibiting, in part of that period, a GDP per capita greater than that of Germany, France and Italy.

Between 1900 and 1916 Argentina’s exports of frozen meat jumped from 26,000 tons a year to 411,000 and the country attracted millions of dollars in foreign capital, although it always kept its domestic savings rate low.

In 1914, the then sophisticated British chain Harrolds chose Argentina as the first country to have a branch outside the United Kingdom. In the 1940s and 1950s, its windows displayed works of art by famous Argentine artists.

Today, the huge Harrolds building in Buenos Aires has been closed since 1998, grimy and abandoned on the same Florida street as the money changers.

Almost adjacent to the building, a notice on the facade of a Brazilian Renner store announces that it is temporarily closed “due to lack of product stocks for reasons beyond the company’s control”.

With the scarcity of dollars, less and less imported products enter Argentina. Foreign trade businessmen complain about the government’s lack of discretion, in addition to an increase in corruption in the area for the release of import guides.

Among the more historical causes of Argentina’s decadence, six military coups (1930, 1943, 1955, 1962, 1966 and 1976) that undermined the strength and independence of the institutions are pointed out; the low secondary educational level of Argentines until the end of the 1940s; and the closure of the economy to foreign markets that marked Argentine history after the Great Depression of 1929.

In the government of Juan Domingo Perón (1946-1955), protectionist and nationalist policies were deepened, at the same time that a new era of populism increased state spending directed at the poorest, without a corresponding increase in revenue.

The same type of policy was maintained by the couple Nestor and Cristina Kirchner while they occupied the Presidency, between 2003 and 2015, with the multiplication of social benefits, public jobs and retirements without the due contribution of the beneficiaries.