Why Argentina is not rich

By | October 11, 2022

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Why did #Argentina stop growing? Why did it never develop into a #prosperous nation like Japan, France, or Canada?

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[Music] At first glance Argentina seems to have It all fertile farming lands Bountiful Freshwater sites access to the world’s Oceans growing demographics and so on Yet some things rotten in the state of Argentina in 1910 the country ranked as One of the world’s wealthiest annual Growth averaged five percent and its per Capita GDP rivaled that of Belgium yet By 2000 the wheels had come off the per Capita GDP dropped and since then Buenos Aires has teetered on the edge of Bankruptcy surviving paycheck to Paycheck many explanations were Submitted one that gained prominence Especially following his death was that Fault lay with the former president Juan Domingo Peron it was Peron whose Corporatist governance stifled Innovation Peron who placed populist Agitation over Argentina’s economic Well-being Perron whose charismatic Authority the hampered stable governance All the blame for Argentina’s troubles Were heaped onto his uncomplaining Shoulders yet structural issues are Rarely due to personality defects and Economic woes long predated perron’s Government so why did Argentina stop Growing why did it never develop into a Prosperous Nation like Japan France or Canada and what caused its slow aching And long decline

[Music] Foreign This video is sponsored by Masterworks The future of Argentina is not looking So good inflation is expected to hit 95 Percent and for Citizens there are only So many ways to preserve wealth but the S P 500 down this year index funds seem To be a losing Gambit however according To a McKinsey study the biggest banks And institutions are investing anywhere Between 30 and 50 of their assets into Alternatives asset managers are now Following suit and alternatives are seen As a way to Shield clients from high Volatility and skyrocketing interest Rates like anything in investing timing Is everything but one platform is ahead Of the curve Masterworks they let you Invest in an alternative specifically Named by Goldman Sachs and BlackRock as Being crucial for the next decade Contemporary art as an asset art has Outpaced the s p 500 for the last 26 Years with 13.8 percent appreciation for Contemporary art versus 10.3 percent Return for the s p Masterworks has so far sold six Paintings for an average return of 29 to Their members including a sale just last Month for a 33.1 percent return which is Incredible because at the same time the S P 500 was down around 20 percent Masterworks has done so well they’ve had

To release more art on their platform to Meet demand and there’s a wait list but You can skip it by just clicking the Link in the description Foreign A state’s living standards there are Lies damned lies and GDP per capita Statistics Productivity measures can be useful but Alone they reveal nothing of a society’s Actual conditions Argentina is a case in Point though by 1900 it ranked highly on Standard metrics land policy remained Rooted in the 16th century and though Land is the source of all wealth in Argentina land distribution led to Development mediocracy like all settler Societies Argentina’s land policy was Determined by colonization patterns Violence and the prerogative of force Guided land transfers from the Indigenous peoples to the conquerors the Original titles were written not in ink But in blood soldiers and the Politically well-connected carved out Vast Estates called estancias and this Top heavy system of proprietorship Ensured wealth status and political Power By the late 17th century this tendency Had spread to the River Plate the Collapse of Spain in 1808 opened a Political vacuum allowing the land Owning estancieros to monopolize Power

By the 1860s rural Elites took control Of Buenos Aires rolling through a sham Democracy Free from Madrid’s Authority the new State expanded South into the Pampas new Lands were granted to settlers but the Lion’s Share went to the already wealthy Advances in refrigeration technology and The absence of a domestic Market monthly Estanciaros relied on exports to realize Profits most were destined for the Industrial Hub of Britain as such British Investments began to seep into Argentina monopolizing the country’s Railways to ensure export stability Britain thereby stepped into the Imperial role that Spain had once Occupied here the Estancia Rose’s Self-interest clashed with development Priorities having acquired their land by Less sophisticated means their wealth And influence dependent on Argentina Remaining a source of raw agricultural Commodities there was thus no impetus to Move up the value chain or industrialize Instead these functions were left to Britain confining Argentina to Stagnation Moreover as immigrants poured into the River Plate many became tenant Farmers On the estancias here excessive rents Gobbled up the surplus of farmworks and This undermined the consumer demand that Would have made domestic manufacturing

Economically viable while this led to an Agricultural boom long term it halted Argentine development the ruling Estanceros were untroubled by this Though most were happy to watch their Export revenues and ground grants roll In thus by 1900 Argentina entered a Relative GDP per capita Peak yet this Apparent Prosperity was profoundly Unequal and dependent on export markets Selectively shot footage of downtown Buenos Aires concealed a darker reality Of urban squalors and self-help housing Meanwhile fresh waves of Spanish and Italian migration placed stress on Existing infrastructures and since most Were employed in the farm export Industry education and literacy Standards remained low Argentina’s Outward facing economic structure left It vulnerable to Global sharks so when The Great War broke out in 1914 export Markets were clobbered electoral reforms Provided a window for urban workers to Form a government and in 1916 the Radical party assumed power on an Anti-elite ticket which they maintained Until 1930. though they were successful In pushing industrialization and job Creation Rising living standards bid up Food prices and labor costs and this Threatened the farm export model on Which the estanciaros depended tensions Came to a head with the Wall Street

Crash of 1929 the resulting Great Depression caused Global export markets To collapse combined with severe Droughts this through agricultural Workers onto the street sparking civil Unrest So in 1930 under the pretext of Stabilization the estanciaros backed a Military coup that established another Sham democracy though Argentina dodged The brunt of the depression London’s Decision to enact beef tariffs Threatened its economic recovery now in Control of government the estanciaros Again acted to ensure their interests And in 1933 Buenos Aires signed the Lopsided Roka runkimon treaty to Maintain beef exports Argentina would Become a captive market for British coal And oil British interests also gained a Privileged position in Argentina’s meat Processing and sales Industries plus the British were exempt from labor laws Once more this confined Argentina to Resource extraction while Britain sat Atop the value chain naturally Anti-british and anti-oligarch Sentiments Rose throughout the 1930s and When the second world war broke out in 1939 this formed a breeding ground for Economic nationalism wartime industrial Expansion granted the urban labor force New political clout and in 1943 another Military coup reorganized Argentine

Society yet again this time the main Benefactor was army colonel Juan Domingo Peron upon being appointed as labor Secretary Perron used his position to Cultivate Loyalists and Foster a Populist political base and when Democracy was restored in 1946 he wrote This wave straight to the presidential Palace seeking to implement another State cooperative Government Model Peron Nationalized Argentina’s Railways in Exchange for canceling Britain’s wartime Debts he also effectively enacted export Tariffs pushing down domestic food Prices and raising State revenues this Money was put towards social welfare Programs and Industrial subsidies these Policies were not unusual for the time However geopolitical factors soon Rendered them unviable wartime Neutrality meant Argentina was excluded From Washington’s martial plan Aid Instead US dollars were pumped into Europe cycling them back to the United States as agricultural purchases Argentina was cut out of this Loop Depriving it of the foreign exchange Needed to import the Technologies and Energy resources synced with Industrialization by 1949 the economy Was in a crisis export earnings dropped A third dollar reserves vanished Industrial output stalled unemployment Was rampant and inflation soared to 33

Perron had no choice but to cut spending Revive the export industry and open Argentina to foreign Capital yet this Undermined peron’s nationalist Credentials he responded by cracking Down on dissidents only to hit a third Rail by challenging the Catholic church So in 1955 the former colonel was Himself deposed in a coup and exiled to Madrid Political instability remained elusive Though Argentina’s return to democracy In 1958 was reversed by another coup in 1966. even so living standards continued To rise despite a drop in the country’s Per capita GDP But the real decline began in 1973 when An oil shock and the collapse of the Brethren wood system led to a downtrend In World conditions the agricultural Export Market was decimated and foreign Investment slowed to a trickle desperate The military dictatorship invited Peron Back to head a democratic Coalition but Neither he nor a cabinet filled of Economists could solve the country’s Problems after his death in 1974 Peron Was succeeded by his wife Isabel but she Too was unequal to stabilizing the Economy a failed austerity program led To rises in fuel transport and utility Costs bringing on a collapse in real Wages hyperinflation and a recession Once more restoring stability formed a

Rationale for another coup in 1976 but The Junta was backed by the oligarchs Who sought to restore the dominance of Agriculture this led to deregulation Privatizations removal of tariffs Protections and extensive loans which Ballooned Argentina’s foreign debt to 31 Billion dollars or two-fifths of its GDP The result was the industrialization Mass unemployment and a whole thing of Real industrial wages resistance was met With force and up to 30 000 political Dissidents disappeared at the hand of The government never to be heard from Again meanwhile the loosening of capital Controls LED oligarchs move their money Offshore and in 1981 another currency Devaluation intended to boost exports Led to a run on the peso resulting in Capital flight desperate for a political Win the Junta fell back on nationalist Swindle by invading the Falkland Islands Whose sovereignty it disputed with Britain but this plan backfired when the UK forces successfully retook the Islands thereafter the Junta collapsed And democracy was restored in 1983. it was left to the government of Raul alfonsin to rebuild a shattered Country but this was impossible given The destruction of Argentina’s Industrial base and the fact that the Interest repayments on foreign debts Were eating up more than half of the

Export earnings alfonsin had little Choice but to request an IMF loan to Avoid bankruptcy and this meant imposing Austerity on Argentina the economy Improved somewhat but water shortages And forced blackouts aroused social Discontent and a spurt of hyperinflation Due to money printing which in 1989 Reached 28 000 allowed the peronists to Return to power yet once there the new President Carlos menim abandoned social Democracy in favor of continued Austerity and de-industrialization to Arrest inflation he also introduced the Convertible peso which was packed to the US dollar this was funded by the Extensive Barrow point of US Dollars and The sale of State Enterprises to private Actors interestingly inflation eased and There was stable growth but even so by 1997 the building debt had placed Convertibility under stress maname Refused to abandon the peg since doing So would crush economic confidence as a Result the country slid into recession And in 1999 the Hot Potato fell into the Leap of menom’s successor Fernando de la Rua a surging dollar pushed up an Already overvalued peso undermining Export competitiveness Buenos Aires Abandoned the peg leading to a bank run As argentines withdrew their money while It still had value the Government tried To Halt the crisis by freezing dollar

Accounts but in December 2001 the entire System Came Crashing Down Argentina Devaulted on its 80 billion dollar Foreign debt GDP contracted by one-third Riots erupted and Buenos Aires switched Presidents four times in three weeks it Was the worst depression in the Country’s history In some Argentina’s 20th century was Marked by its failures to address the Structural issues caused by its agrarian Economic base those who benefited sought To maintain the status quo but this came At the cost of Industrial Development The resulting tensions undermined Political stability frustrating rational Policy making and long-term planning Consequently ordinary argentines lost Faith in the political class and it was In this soil that the myth of the long Decline took root simplistic though with His its psychological appeal is All Too Human because ultimately it is easier For one to mourn their lost potential Than to accept they never had it in the First place I’ve been your host children from Caspian report have you approve of the Work we do please consider joining our Patreon community page or the YouTube Membership program joining either helps Us to keep our content objective and our Channel self-sustaining thank you for Watching and so


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