ARGENTINA: South America’s Most Developed Yet Volatile Economy

Simon Kuznets summarizes “You will find four types of countries in the world: developed, undeveloped, and then there are Argentina and Japan.” Photo (c) Mente Argentina 2017Simon Kuznets summarizes “You will find four types of countries in the world: developed, undeveloped, and then there are Argentina and Japan.” Photo (c) Mente Argentina 2017

By Shirley Alaba – While it doesn’t guarantee the best living standards among all the countries on Earth, Argentina is one of the best, if not the best, place to live in South America. This unique country, located at the crossroads of one of the planet’s southernmost ends, has historically been an economic behemoth, with vast swathes of cultivable land and relatively easy access to primal world water bodies connecting it to all parts of the earth with relative ease.

This great nation could have been a much better-developed country and even a global superpower, had it not been subject to poor economic policies during essential conjectures in its independent history. Still, Argentina offers one of the highest living standards in a region where its peers are often struggling with issues like rampant poverty, education disparity, low economic development and a host of other similar problems.

But the question that confuses a lot of people to no end is how this country, which is situated in such an economically volatile and underdeveloped region, manages to maintain this high quality of life with such consistency.

A Potential Economic Powerhouse

Photo (c) G20 2017

However, the country is still included in the G20 group and has been one of the fastest growing economies in the past two decades, nearly doubling itself in the period 2002-2011. Photo (c) G20 2017

The growth and development of any country depend crucially upon the performance of its economy over extended periods of time. A robust economy empowers the government to have more disposable funds to spend on all kinds of human and infrastructural development projects throughout the country.

Argentina has always been an economic powerhouse on the global stage, and in the first part of the 20th Century, it was the 10th wealthiest nation on Earth, trumping countries such as Germany and France. But successive governments failed to respond to global events like World War I & II and the Great Depressions of the 1930s in an aligned manner, leading to the downfall of the Argentinian economy from its top pedestal. However, the country is still included in the G20 group and has been one of the fastest growing economies in the past two decades, nearly doubling itself in the period 2002-2011. The average growth rate in this time was an impressive 7.1%.

The economy has slowed down since then by registering a disappointing 1.3% growth rate in the next three fiscal years since the boom, but signs of improvement are definitely there as the government tries to control inflation and put the country back on track for economic growth. Argentina’s economic resilience or the ability to bounce back from trying periods despite crippling global events and poor policymaking is down to the country’s rich natural resource deposits. The place is highly integrated industrial strata and more importantly, an agricultural sector whose goods are exported to all parts of the globe, making it a top global agrarian supplier.

A High Rank in HDI among South American Nations

The latest figures from the Human Development Index (HDI) might place Chile above Argentina in the rankings, but Argentina’s most significant accomplishment becomes more prominent when we delve down further and analyze the Index when adjusted for inequalities. Photo (c) Hispan TV 2017

The latest figures from the Human Development Index (HDI) might place Chile above Argentina in the rankings, but Argentina’s most significant accomplishment becomes more prominent when we delve down further and analyze the Index when adjusted for inequalities. Sometimes, figures which take the whole population into account for painting a narrative might become misleading, especially in the case of nations where problems of inequality between individuals belonging to different classes of the society exist.

Chile ranked 38 in the regular HDI, but when adjusted for inequality, it falls 12 places while Argentina just slips down 6 spots and manages to beat Chile in nearly every metric used to determine the ranking. The Inequality in Education in Chile is 8.2, while in Argentina, it’s 8.1. When it comes to inequality in income, Argentina manages to beat Chile by registering a score of 27.4, while the latter gets a disappointingly higher score of 35.5. This has happened because, while schools remain free in Argentina, the nation has worked to improve access to education for everyone living in the country. Similarly, when it comes down to economic prosperity, the state has shown a single-minded resolve towards involving the more marginalized sections of the society and reducing the income disparity that exists between rich and poor classes.

Argentina’s literacy rates are among the best in the world – around 98% of the population has gone to school. The healthcare is maintained through a system of publicly funded healthcare units. The road system is one of the best in Latin America, the country is self-sufficient in the power and gas sector, and it counts of as a relatively high-income country with GDP according to purchasing power parity amounting to $20,499.

Way Off

Photo (c) Merco Press 2017

Argentina is still way off from meeting its real potential. As said previously, this country has immense economic growth potential but what it just needs is a leadership that is inspiring, creating a learning environment, manages to take the right decisions, work towards utilizing the tremendous resources and further improves the quality of living in this beautiful country. Photo (c) Merco Press 2017

While being one of the better-developed states in the South American region, Argentina is still way off from meeting its real potential. As said previously, this country has immense economic growth potential but what it just needs is a leadership that is inspiring, creating a learning environment, manages to take the right decisions, work towards utilizing the tremendous resources and further improves the quality of living in this beautiful country.

Up till now, for most of the world, the leading international interaction with Argentina has been through Football, a global sport in which Argentina boasts a formidable team, but this unique country offers so much more than that.

It’s a land of immense character and beauty and resilience in the face of adversity, and above all, as the Nobel prize-winning economist, Simon Kuznets summarizes “You will find four types of countries in the world: developed, undeveloped, and then there are Argentina and Japan.”