Downhill or the long agony of Argentinian development: Alcino Ferreira Câmara-Neto and Matías Vernengo
Figure 6.1 Income per capita (% of US GDP per capita) (source: Maddison (2001), IFS/ IMF and authors’ calculations).
that ensued can be seen as the result of the deconstruction of the process of globalisation that tied the Argentine economy to the world through trade and capital flows. However, it is important to note that the collapse of the primary-export model of development in Argentina, as much as in other parts of Latin America and the peripheral world, were the result of the collapse of the system in its centre. It was the collapse of the hegemonic position of the United Kingdom that disorganised the international division of labour, and the Gold Standard system that underpinned and gave sustainability to British domination. In other words, the internal conditions in Argentina, in contrast to other countries in the region (e.g. Mexico, that suffered a revolution), were not central for the change in the development strategy. In contrast to conventional wisdom, the second relative decline of income per capita in Argentina cannot be attributed to the failure of the import substitution industrialisation (ISI) model, in the economic plane, or to the failures of the populism of Peronism or the developmentalist programme of Frondizi, in the political plane, simply because the economic performance in the immediate post-war period up to the 1970s is rather satisfactory.2 Only in the 1980s, the second important decline in the relative income of Argentina actually took place, that is, well after the import substitution model was abandoned by the liberalising policies of the last military government (1976-1983). The policies initiated in 1976 were designed to restore the primary-export model of the Belle Époque, promote growth and reduce what was perceived as the excessive power of the trade unions. In contrast to the first change in development strategy, the move away from ISI was a policy decision of the local elites. In other words, the relative decline in income per capita took place in two distinctive periods, associated to the crisis of the export commodity and the ISI model. For that reason it seems more promising to treat the Argentine story not as one of continual decline, but as one in which for external and internal circumstances the model of development is overturned. The results of the new development strategy might be reduced levels of growth and divergence of income per capita with respect to the centre, but that might not be the overarching reason for the change in the first place. In the second case, reduced power for trade unions and lower levels of social conflict might have been seen as more relevant than high rates of growth, for example. In this chapter we seek to analyse the relative performance of the Argentine economy during the ISI period and the subsequent neoliberal model implemented after 1976 and, with the truncation of the Alfonsín government (1983-1989), maintained during the 1990s up to the collapse of Convertibility in 2001-2002. Finally, the period of recovery between 2003 and 2008 is shown to fall short of a full break with the neoliberal model implemented after 1976. The rest of this chapter is subdivided in four sections. The next section discusses the general tendencies of output, investment and productivity for the whole period starting in 1950. The following one deals with the macroeconomic policies. The third section analyses the coordination of the process of investment and the international insertion of the Argentine economy, while the fourth deals
with income distribution. In the conclusion we discuss the current Argentine development strategy, and the effects of the international economic crisis that started in 2008.