Argentina

    Дисциплина: Иностранные языки
    Тип работы: Реферат
    Тема: Argentina

    ARGENTINA

    Argentina has experienced slow economic growth since the 1940s.

    By the mid-1970s long-term growth declined noticeably, and in

    the last half of the 1980s the country suffered its longest

    period of stagnation in the century. Savings and investment

    rates fell precipitously from the mid-1970s until 1989.

    Argentines, responding to the unstable macroeconomic

    environment, increasingly saved and invested abroad. Labor

    productivity fell ang poverty worsened. This economic

    performance was tranceable to chronic public sector deficits and

    endemic inflation. Public sector deficits in the late 1970s

    ranged from 10 to 14 percent of GDP, and in the early 1980s

    surpassed IS percent of GDP. After the return to constitutional

    democracy in 1983, public demands to control inflation were

    translated into four successive stabilization programs. All

    failed to eradicate inflation, and each ended in a more virulent

    inflation than the one preceding it. The main reason for these

    failures was the inability of the stabilization programs to

    redress rapidly and permanently the public sector structural

    deficit. Structural deficits emerged from the post-war

    organization of the economy. Economic policy from the 1940s was

    used to propagate rules and transfers favoring the interests of

    private groups with access to power. By the early 1980s public

    expenditures approached 40 percent of GDP. Unionized labor

    benefitted from high wages, guaranteed employment, and rigid

    rules governing hiring and dismissals. Industry benefitted from

    highly protected markets, tax exemptions through special

    promotion regimes, subsidized credit-or effective grants, as

    many loans were not collected-subsidized inputs from public

    enterprises, and high prices on sales to public enterprises.

    Housing contractors and middleclass home buyers benefitted from

    enormous public transfers through earmarked taxes and effective

    grants through the Housing Bank. Tobacco growers, sugar growers,

    the merchant marine, and other small interest groups enjoyed

    special tax breaks. Consumers enjoyed below-cost tariffs from

    public enterprise and lax collectioll practices. Provincial

    governments could avail themselves of costless credit from the

    provincial banks, which the central bank reimbursed. The

    military enjoyed expanding budgets, especially over 1976-82, as

    well as management perquisites in state companies they

    controlled. By 1989 subsidies through the budget, tax

    exemptions, agriculcural regulations, public enterprise tariffs,

    and central bank rediscounts were estimated to amount to roughly

    8 percent of GDP--the equivalent of some $8 billion. The growth

    of the state and concomitant rents and subsidies, along with the

    capital flight provoked by an inconsistent exchange rate policy,

    were financed during the late 1970s largely by external

    borrowing through the expanding Eurodollar market at low or even

    negative real international interest rates. This permitted the

    government to run large deficits and sustain a revalued exchange

    rate with relatively low levels of inflation in the second half

    of the 1970s. An abrupt end to voluntary foreign commercial

    credit in the early 1980s and the sudden rise in real

    international interest rates provoked a financial collapse and

    placed additional pressure on public finances. The situation was

    complicated by the South Atlantic War. The loss of external

    finance and lack of adjustment meant the treasury had to resort

    to increased inflationary finance through monetary creation. The

    private sector, in an effort to avoid the resulting inflation

    tax, gradually withdrew its resources from the financial system

    and reduced its real holdings of currency ; this, together with

    the negative effects of inflation on real tax collections, made

    Argentina\'s economy progressively more unstable in the 1980s.

    Even though the deficit fell from near 20 percent of GDP in the

    early 1980s to an average of about 10 percent over 198...

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