Argentina Essay -- essays research papers

I. INTRODUCTION Argentina lives in a democracy since 1986. Before thisyear lived it under a military regime. In the nineties under the presidency ofMenem the country experienced a great increase in the liberalization of quite a little.Argentina has a free market stinting system. Due to the recent privatizationprogram, the State now has a very limited role in the economy. According tothe Competitiveness Report of the World Economic gathering Argentina isclassified as one of the most open, least protectionist countries in the world.Its currency is convertible to the US dollars and there is total freedom formoving jacket crown internationally. Argentina has conducted one of the mostintensive privatization programs in the world. The telephone society,airlines, most railroads, electric power production companies (includinghydroelectric power plants), the Argentine oil company YPF (bought by theSpanish company Repsol) steel mills, ports, TV stations and most publicservices were transf erred recently to the private sector. Consistent withFundacion Invertir the combined value of privatized firms amounts more tomore than US$ 30 billions. Many foreign firms have participated in thislarge-scale privatization program. Foreign investors do not need to seek any bod of prior approval and are free to repatriate full amount of their capitaland earnings any time. Foreign and domestic companies are treated equally. beneath the law, they have access to all economic sectors and are eligible forincentive program and state procurement. II. TRADE PATTERN It is hardto state the type of trade that exists among Argentina and Brazil in theautomobile industry because both countries import and export cars of thesame brand and very similar representatives. Volkswagen puzzles some of itsmodel of cars in Argentina and some others model in Brazil. The reason forthis is to achieve economies of scale each country specializes in a certainmodel of car, by doing so they reduce the cost of ea ch additional unit.Another reason for specialization of production in each country is that it mightbe cheaper to produce a certain model in either Argentina or Brazil. Severalcompanies as Volkswagen have invested in production facilities in Mercosur.Additionally, joint ventures between local and foreign parts manufacturershave improved quality. A report on Argentina auto parts/services announcedthat loca... ...stment payments, and transfers.Argentina has primarily maintained a deficit position in trade in services, andhas historically paid out more investment income than it has received, keepingits finances on edge. Countries whose foreign direct investments keeps upwith its domestic growth can afford such disparities. Nevertheless Argentinasdeficit current account shows that the economy might be hurt even more bycapital flight. Thus the development of exports, especially nontraditional ones,is taking on greater urgency. In recent days exports of manufacturedproducts increased at respectable rates. "In 1995 industrial products grew 40percent while primary feather products and manufactured agricultural products eachgrew 29 percent. In 1996, exports of industrial products decreased 0.6percent, primary products grew 21 percent, and manufactured agriculturalproducts 13 percent. In 1997, exports of industrial products grew 27percent, and manufactured agricultural products 7 percent, however theprimary products decreased 2.4 percent. Imports of capital goods and partsare a major component of total imports, which are being used to increaseproductivity." (Fundacion Invertir)