Argentina Embraces Socialist Policies of the Past
March 5, 2004
After enjoying a decade of economic liberalization, Argentina reversed course in 2000, opting instead to pursue big government policies made popular under General Juan Peron in the late 1940s.
After reeling from an economic recession over the last three years -- the worst in Argentina's modern history -- the situation has begun to improve, says American Enterprise Institute scholar Mark Falcoff, however:
- Argentina's GDP will grow by about 7 percent this year, a figure extremely impressive by current Latin American standards; however, this level of growth would need to continue for another 10 years for the country to reach the prosperity it enjoyed in 1998.
- Official unemployment rests at 20 percent and some estimates put as many as 60 percent of all Argentines below the poverty line.
- Foreign investment into Argentina has slowed considerably, putting at risk the maintenance of its capital stocks.
In order to survive, many Argentinians have been forced into semi-legal or illegal activity: drug and arms trafficking, kidnappings for ransom, and unauthorized reproduction of software, music and videos.
Nevertheless, President Nestor Kirchner has remained tremendously popular among Argentines by blaming others for the countries failures, particularly international lending agencies (such as the IMF), foreign businessmen and George W. Bush.
Source: Mark Falcoff, "Argentina Has Seen the Past - and It Works (For Now)", Latin American Outlook, American Enterprise Institute, January 2004.
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