Could Argentina become the next Germany?

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In recent years, Argentina has not gained a reputation for political stability or economic development. It seems to be a country in permanent crisis. Between hyperinflation, military coups, failed wars, failed economic policies and a failed political system. But this wasn’t always the case.

There was a time when “As rich as an Argentine” was once a common phrase, back when Argentina had wealth and had a stable government. In fact, a few generations ago, Argentina was among the top ten richest countries in the world. Its GDP was nearly half of that of all the countries in Latin America combined and was more economically developed than Italy, France and even Germany.

With its trade amounting to 7% of the global total, Argentina was the breadbasket of the world. However, things took a turn for the worse when the great depression took hold of the global economy and global trade sharply declined. As a result, Argentina’s GDP dropped, external debt increased, capital flight took hold, and the country experienced hyperinflation like never seen before. What was once the superpower of Latin America quickly became a nation languishing in poverty. In response to the crisis, the government implemented some very extreme interventionist and protectionist policies, many of which failed and brought the country further into decline.

While other countries were implementing policies to facilitate and lower the barrier to free trade, Argentina remained in a closed economy focused on industrializing within its borders, and keeping the rest of the world out But what made Argentina so successful in the first place? And what is happening now in the global economy that may finally push Argentina back to its place as an economic superpower?

Source: The Great Game

Post available in: English