MARKET REFORMS OF

ARGENTINA

Presented by: -
Ankit Agrawal (08)
Karan Gupta (39)
Navin Kumar Singh (45)
Phani Sasiknth (49)
Tirthanath Sarma (73)
Vinay Tiwari (76)
Argentina’s Economic History
Early 19th Century

Farming

Late 19th/Early 20th Century

Foreign Direct Investment

WWI
Immigration
 50s,60s, and 70s
 Manufacturing
 Import Substitution Industrialization
 Steady Growth
 Debt

80s and 90s

 Debt
 Inflation
 Peron
REFORMS UNDER MENEM
 Strategies on Privatization
1990-1994
 Airlines
 Telecommunications
 Postal service
 Sold banks and coalmines to new private companies

Reduced government consumption and inefficiency

 Strategies on Liberalization
Deregulated the economy
Liberalized foreign investment law
Eliminated price controls
Convertibility Law
Strategies to Open International Trade
Elimination of export taxes and import quotas
Eliminated foreign exchange rate controls on capital
inflows and outflows
 Argentina opened up its economy to Trade and
Investment in the early 1990 .
 Established Monetary Stability by fixing its
Currency PESO to the Dollar
 Result was an average per capita growth rate of
6.3 % until 1995
 During 1990 – 00 , GDP increased by about 50
percent ; Public Spending increased by 90 %
RESULTS
 Reforms initially led to lower Inflation , Renewed
Investor Confidence , Economic expansion and
higher standards of living
 1995 Economic Downturn
 Output declined 4.5% ; Gross Domestic Investment
Declined 16%
 After slight Recovery , another crisis in 2001
 Between 1991 and 1998 , the Argentinean economy
grew by 5 % annually , but after this the GDP had a
negative annual growth until 2003 .
In the same period , Productivity grew by 30% but
the average salary increased only 3 %
In 2002 , Unemployment was 21.5 % , while in 1991
it was 6.3 %
PROBLEMS
Govt. Regulation is a problem
 Opening a new Business required 12 Bureaucratic
Procedures , 77 Business days and $ 2100 in fees
 Extremely Rigid Labour laws
 Dollarization may introduce some Market
Discipline
 An overview of Globalization Process as developed
in Argentina indicates important national and
international groups have taken advantage of this
situation by engaging in illegal or corrupt
activities
 Fiscal Evasion
 Uncontrolled movement of Capital around the
World
Extraction of Money from one activity to invest in
others in order to maximize profit