Analise da Crise Economica Argentina Seculo XX aos Dias Atuais

QUESTIONS TO CONSIDER 1 How is this problem country region different from what was presented in class materials 2 What new developments have occurred that have changed the situation for better or worse 3 Is this topic still relevant to what we discussed in class Or is it no longer a relevant example For example Is Venezuela still a dictatorship Is crime still a major problem in Brazil 4 What other concepts from international studies apply to this case or have helped you understand what is happening DUE DATES October 21 December 14 FORMAT 5 pages doublespaced 12point font 1inch margins Cite your sources in any format 3 sources minimum Despite the prospect of economic growth in Argentina at the beginning of the 20th century the country has been facing successive economic crises in recent years In this sense it is necessary to analyze the historical origins of the current Argentine crisis Historically Argentina had a model of economic liberalization based on the formation of the country s agro exporting economy a dynamic that was present until the beginning of the 20th century From 1930 facing the military coup subsequent institutional crises were instituted and the State policies that were previously liberal became interventionist over time Thus despite the great economic development promoted during the Peronist Era 19461955 19731974 in the following years what occurred in the country was a stagnation of productivity increased inflation and decreased economic growth The measures adopted during Peronism have served and still serve as a model today defending policies that demand high public spending The crisis persisted in the following years in 1975 measures of shock and adjustment were implemented the socalled Rodrigazo and in 1989 there was a hyperinflation Subsequent attempts to resume Peronist policies during the Kirchner governments in 2000 and 2010 did not achieve the same success on the contrary resulted in economic recession In 2015 Mauricio Macri sought to implement economic liberalization but contrary to what was promised he did not implement his proposals and could not contain the crisis The Macri government was consolidated by recession and slight economic growth Finally the legacies left by this government were high inflation and unemployment rates as well as a devaluation of the Argentine peso leading to the demand for a broad IMF aid package which had to be refinanced by the next government In 2019 the economy during the government of Alberto Fernández influenced by Peronism was in another collapse leading the country to not comply with its obligations regarding foreign debt In order to contain hyperinflation at the time Argentina opted to implement price control and did not contain public spending or currency issuance Linked to the economic issue there is still a political conflict between President Fernández and his deputy Cristina Kirchner regarding the proposed solutions to the countrys economic issues Another point that has been generating political instability is the multiple exchanges of Ministers of the Economy since the beginning of the current government The role of the financing provided by the IMF was to assist in the balance of payments and also in the budgetary issue of the country Still it becomes necessary to implement debt sustainability face high inflation raise financial reserves and promote growth The conditions set out in the agreement were that Argentina should reduce the primary deficit by 2024 Throughout history since 2011 the Argentine economy has faced periods of ups and downs On one hand with the end of convertibility which predicted parity between the peso and the dollar there was a moment of economic growth from 2003 On the other both inflation and poverty rates continued to rise Thus the country currently has inflation of about 80 per year being one of the largest among the major economies in the world The inflationary issue is one of the biggest economic challenges of the country since despite attempts to contain it it has been present for a long time in the country directly impacting the economic capacity of consumers by hindering consumption and reducing purchasing power in the face of rising prices This crisis cycle is driven by the high public spending of the country that results in default to international financial institutions and consequently the loss of credibility of the country with foreign investors In an attempt to circumvent this situation instead of reducing spending policies are established to increase the issuance of money by the Central Bank itself to finance these public expenditures Thus there is a growth of inflation in the face of increased circulation of money resulting in a crisis In an attempt to escape the crisis people seek to keep strong currencies like the dollar increasing the demand and price of this currency in relation to the Argentine peso For this reason Argentina began to operate through the use of two currencies the Argentine peso itself and the dollar In this sense in order to avoid the flight of dollars the policy adopted was the control of capital In 2001 the socalled Corralito policy limited the amount of dollars withdrawn to 250 On the other hand a parallel dollar the socalled blue dollar was created granting the purchase of dollar values above what was stipulated by the corralito for a much higher price In this perspective Argentina meets the countries of Latin America that in the midst of periods of crisis have adopted policies that limit the purchase of dollars by the population Thus the Argentine peso in addition to being devalued by the official dollar began to be devalued more intensely by the blue dollar In addition to this issue of increasing devaluation of the peso and high inflation Argentina also has one of the lowest wages in the region Data shows that a monthly minimum wage of 45540 Argentine pesos corresponds to 334 in the official exchange rate and 135 in the parallel exchange rate Other issues arising from the crisis are the high rates of poverty and unemployment in the country In addition data indicates that Argentinas international reserves are unable to afford one semester of imports from the country leading the country to once again increase the basic interest rate in order to control inflation and attract foreign capital to the country This shortage of international reserves puts Argentina in a position of vulnerability in the face of global crises Thus it can be said that the dynamics of the economic crisises of Argentina derives from a fiscal imbalance which becomes a fiscal imbalance before the increasing of money printing in order to contain the deficit Thus there is still an exchange imbalance given the attempt by the government to keep the official dollar as exchange rate and nominal anchor In this perspective it can be observed that the Argentine governments over the years were marked by successive breaks in economic lines that instead of containing the crisis ended up generating even more economic instability Some argue that there is an intrinsic management inability in the country since despite numerous attempts over the past few years the crisis is intensifying more and more It can be seen therefore that the economic issues that Argentina faces today are the result of a series of situations that have emerged in the past and have not been successful in solving by those responsible for the economic policies of the country over the years As already mentioned among the main problems we highlight the high deficit in public accounts in the face of high public spending the monetary and exchange rate issue and the scarcity of reserves and liquidity to comply with foreign debt payments For Inspers professor of Political Science Leandro Consentino Argentina has failed to stabilize its currency in the past and now the country faces serious problems of fiscal irresponsibility For this reason experts point out that inflation in the country may reach 100 or even exceed this rate in 2022 According to Inspers Economics professor Ricardo Humberto Rocha Argentina is moving towards a violent impoverishment of society with a very critical situation From this it can be said that the managers of Argentina have failed and continue to fail by not controlling the public spending of the country and adopting economic policies that have a history of failure such as the expansion of the printing of money and the control of capital It is a cycle because inflation leads to political instability which in turn makes it impossible to fight the inflation According to Carlos Furlanetti professor of Economics at the FIA Business School the forced parity between the Argentine peso and the dollar is responsible for this problem since according to him It only increased the demand for strong currency in the country and never stopped even with successive governments trying to adopt various interventionist measures Thus it is evident that the current crisis in Argentina is multifactorial incited mainly by economic and political issues throughout the history of the country which can be enhanced by external factors SOURCES CNN BRASIL Por que a economia argentina está em crise e como chegou nesta situação Available at httpswwwcnnbrasilcombrbusinessporqueaeconomia argentinaestaemcriseecomochegounestasituacao Argentina tropeça de crise em crise há anos por conta de má gestão Available at httpswwwcnnbrasilcombrbusinessargentinatropecadecriseem crisehaanospormagestaodizespecialista FERRARI Andrés CUNHA André Moreira As origens da crise argentina uma sugestão de interpretação Available at httpswwwscielobrjecosaMqV9hHtNW934pF3dLCCbs3hlangpt FORBES Inflação a 78 e juros a 75 a crise econômica na Argentina Available at httpsforbescombrforbesmoney202209inflacaoa78ejurosa75acrise economicanaargentina G1 As raízes da crise econômica argentina entenda o histórico da economia no país Available at httpsg1globocomhora1noticia20220920asraizesdacrise economicaargentinaentendaohistoricodaeconomianopaisghtml NOVO Argentina como um dos países mais ricos do mundo ficou pobre Available at httpsnovoorgbrexplicaargentinacomoumdospaisesmaisricosdomundo ficoupobre Despite the prospect of economic growth in Argentina at the beginning of the 20th century the country has been facing successive economic crises in recent years In this sense it is necessary to analyze the historical origins of the current Argentine crisis Historically Argentina had a model of economic liberalization based on the formation of the country s agro exporting economy a dynamic that was present until the beginning of the 20th century From 1930 facing the military coup subsequent institutional crises were instituted and the State policies that were previously liberal became interventionist over time Thus despite the great economic development promoted during the Peronist Era 19461955 19731974 in the following years what occurred in the country was a stagnation of productivity increased inflation and decreased economic growth The measures adopted during Peronism have served and still serve as a model today defending policies that demand high public spending The crisis persisted in the following years in 1975 measures of shock and adjustment were implemented the socalled Rodrigazo and in 1989 there was a hyperinflation Subsequent attempts to resume Peronist policies during the Kirchner governments in 2000 and 2010 did not achieve the same success on the contrary resulted in economic recession In 2015 Mauricio Macri sought to implement economic liberalization but contrary to what was promised he did not implement his proposals and could not contain the crisis The Macri government was consolidated by recession and slight economic growth Finally the legacies left by this government were high inflation and unemployment rates as well as a devaluation of the Argentine peso leading to the demand for a broad IMF aid package which had to be refinanced by the next government In 2019 the economy during the government of Alberto Fernández influenced by Peronism was in another collapse leading the country to not comply with its obligations regarding foreign debt In order to contain hyperinflation at the time Argentina opted to implement price control and did not contain public spending or currency issuance Linked to the economic issue there is still a political conflict between President Fernández and his deputy Cristina Kirchner regarding the proposed solutions to the countrys economic issues Another point that has been generating political instability is the multiple exchanges of Ministers of the Economy since the beginning of the current government The role of the financing provided by the IMF was to assist in the balance of payments and also in the budgetary issue of the country Still it becomes necessary to implement debt sustainability face high inflation raise financial reserves and promote growth The conditions set out in the agreement were that Argentina should reduce the primary deficit by 2024 Throughout history since 2011 the Argentine economy has faced periods of ups and downs On one hand with the end of convertibility which predicted parity between the peso and the dollar there was a moment of economic growth from 2003 On the other both inflation and poverty rates continued to rise Thus the country currently has inflation of about 80 per year being one of the largest among the major economies in the world The inflationary issue is one of the biggest economic challenges of the country since despite attempts to contain it it has been present for a long time in the country directly impacting the economic capacity of consumers by hindering consumption and reducing purchasing power in the face of rising prices This crisis cycle is driven by the high public spending of the country that results in default to international financial institutions and consequently the loss of credibility of the country with foreign investors In an attempt to circumvent this situation instead of reducing spending policies are established to increase the issuance of money by the Central Bank itself to finance these public expenditures Thus there is a growth of inflation in the face of increased circulation of money resulting in a crisis In an attempt to escape the crisis people seek to keep strong currencies like the dollar increasing the demand and price of this currency in relation to the Argentine peso For this reason Argentina began to operate through the use of two currencies the Argentine peso itself and the dollar In this sense in order to avoid the flight of dollars the policy adopted was the control of capital In 2001 the socalled Corralito policy limited the amount of dollars withdrawn to 250 On the other hand a parallel dollar the socalled blue dollar was created granting the purchase of dollar values above what was stipulated by the corralito for a much higher price In this perspective Argentina meets the countries of Latin America that in the midst of periods of crisis have adopted policies that limit the purchase of dollars by the population Thus the Argentine peso in addition to being devalued by the official dollar began to be devalued more intensely by the blue dollar In addition to this issue of increasing devaluation of the peso and high inflation Argentina also has one of the lowest wages in the region Data shows that a monthly minimum wage of 45540 Argentine pesos corresponds to 334 in the official exchange rate and 135 in the parallel exchange rate Other issues arising from the crisis are the high rates of poverty and unemployment in the country In addition data indicates that Argentinas international reserves are unable to afford one semester of imports from the country leading the country to once again increase the basic interest rate in order to control inflation and attract foreign capital to the country This shortage of international reserves puts Argentina in a position of vulnerability in the face of global crises Thus it can be said that the dynamics of the economic crisises of Argentina derives from a fiscal imbalance which becomes a fiscal imbalance before the increasing of money printing in order to contain the deficit Thus there is still an exchange imbalance given the attempt by the government to keep the official dollar as exchange rate and nominal anchor In this perspective it can be observed that the Argentine governments over the years were marked by successive breaks in economic lines that instead of containing the crisis ended up generating even more economic instability Some argue that there is an intrinsic management inability in the country since despite numerous attempts over the past few years the crisis is intensifying more and more It can be seen therefore that the economic issues that Argentina faces today are the result of a series of situations that have emerged in the past and have not been successful in solving by those responsible for the economic policies of the country over the years As already mentioned among the main problems we highlight the high deficit in public accounts in the face of high public spending the monetary and exchange rate issue and the scarcity of reserves and liquidity to comply with foreign debt payments For Inspers professor of Political Science Leandro Consentino Argentina has failed to stabilize its currency in the past and now the country faces serious problems of fiscal irresponsibility For this reason experts point out that inflation in the country may reach 100 or even exceed this rate in 2022 According to Inspers Economics professor Ricardo Humberto Rocha Argentina is moving towards a violent impoverishment of society with a very critical situation From this it can be said that the managers of Argentina have failed and continue to fail by not controlling the public spending of the country and adopting economic policies that have a history of failure such as the expansion of the printing of money and the control of capital It is a cycle because inflation leads to political instability which in turn makes it impossible to fight the inflation According to Carlos Furlanetti professor of Economics at the FIA Business School the forced parity between the Argentine peso and the dollar is responsible for this problem since according to him It only increased the demand for strong currency in the country and never stopped even with successive governments trying to adopt various interventionist measures Thus it is evident that the current crisis in Argentina is multifactorial incited mainly by economic and political issues throughout the history of the country which can be enhanced by external factors SOURCES CNN BRASIL Por que a economia argentina está em crise e como chegou nesta situação Available at httpswwwcnnbrasilcombrbusinessporqueaeconomiaargentinaestaemcrise ecomochegounestasituacao Argentina tropeça de crise em crise há anos por conta de má gestão Available at httpswwwcnnbrasilcombrbusinessargentinatropecadecriseemcrisehaanos pormagestaodizespecialista FERRARI Andrés CUNHA André Moreira As origens da crise argentina uma sugestão de interpretação Available at httpswwwscielobrjecosaMqV9hHtNW934pF3dLCCbs3hlangpt FORBES Inflação a 78 e juros a 75 a crise econômica na Argentina Available at httpsforbescombrforbesmoney202209inflacaoa78ejurosa75acriseecono micanaargentina G1 As raízes da crise econômica argentina entenda o histórico da economia no país Available at httpsg1globocomhora1noticia20220920asraizesdacriseeconomicaargenti naentendaohistoricodaeconomianopaisghtml NOVO Argentina como um dos países mais ricos do mundo ficou pobre Available at httpsnovoorgbrexplicaargentinacomoumdospaisesmaisricosdomundofico upobre