Has Argentina Become Worse Or Better for Foreign Retirees recently?

[Ries]

In the period Argentina has gone from economic powerhouse to 'quilombo', China has gone the opposite way. I thought they'd restrict informal employment and tax evasion but...it seems 50% of China's economy is informal too?
That surprised me.

one question- when, exactly, was Argentina an "economic powerhouse"?
was it when the british owned the fincas, the slaughterhouses, the railroads, and the banks?
or when the country was basically closed to imports, except for the 35hp borgward engines Peron put int the rastrojeros?

Argentina has always been an isolated oddball, and certainly 40 to 50 years of revolving door military dictatorships didnt help.

I think most Argentines would be very happy for a return to humble, inexpensive products made locally that generated jobs, as opposed to a couple of percent of the citizens making a living exporting raw materials while the rest starved...

the era most argentines are most nostalgic about was a time when most people couldnt afford cars, but public transportation, including a nationwide train network, worked.
when no one could become a billionaire, but tens of thousands of people made a lower middle class wage.
a time when you could get a basic education at a state university, or a broken arm set at a public hospital, for free, rather than one when Buenos Aires was a world class destination for expensive facelifts...

 

[MarshallE]

one question- when, exactly, was Argentina an "economic powerhouse"?
was it when the british owned the fincas, the slaughterhouses, the railroads, and the banks?
or when the country was basically closed to imports, except for the 35hp borgward engines Peron put int the rastrojeros?

Argentina has always been an isolated oddball, and certainly 40 to 50 years of revolving door military dictatorships didnt help.

I think most Argentines would be very happy for a return to humble, inexpensive products made locally that generated jobs, as opposed to a couple of percent of the citizens making a living exporting raw materials while the rest starved...

the era most argentines are most nostalgic about was a time when most people couldnt afford cars, but public transportation, including a nationwide train network, worked.
when no one could become a billionaire, but tens of thousands of people made a lower middle class wage.
a time when you could get a basic education at a state university, or a broken arm set at a public hospital, for free, rather than one when Buenos Aires was a world class destination for expensive facelifts...

More of the same is precisely what got voted and has been getting voted out since Milei took the reins. They tried import substitution for decades, it hasn't worked and it's not going to work. Argentina is not going to be the country where consumer electronics (TVs, Phones etc) are manufactured, cars neither. These "industries" need to be put out to pasture, and Argentina should focus on where it has real advantages over other countries, namely Agriculture, Mining, other types of resource extraction generally, and knowledge work (programmers and so forth)

 

[JMHarris]

More of the same is precisely what got voted and has been getting voted out since Milei took the reins. They tried import substitution for decades, it hasn't worked and it's not going to work. Argentina is not going to be the country where consumer electronics (TVs, Phones etc) are manufactured, cars neither. These "industries" need to be put out to pasture, and Argentina should focus on where it has real advantages over other countries, namely Agriculture, Mining, other types of resource extraction generally, and knowledge work (programmers and so forth)

Ahhhh....Adam Smith and the invisible hand...

 

[Ries]

More of the same is precisely what got voted and has been getting voted out since Milei took the reins. They tried import substitution for decades, it hasn't worked and it's not going to work. Argentina is not going to be the country where consumer electronics (TVs, Phones etc) are manufactured, cars neither. These "industries" need to be put out to pasture, and Argentina should focus on where it has real advantages over other countries, namely Agriculture, Mining, other types of resource extraction generally, and knowledge work (programmers and so forth)

I only have about 2 decades of experience with industria argentina, but that has not been my experience.
I have written again and again about all the good quality, reasonably priced local goods I have bought, from my my Campi brand vanatorio, to my fv grifferia, to my Morelli gas oven, to my El Roble hammers, to my Pampero all cotton work shirts. All made here, all half the price I would pay in the USA for a chinese import of lesser quality. I have dozens of other products in my house and in my life that are similar.

mass market brand name consumer goods made by multinationals are something that no country can compete with- Nike has invested between $50 and $100 billion dollars creating a web of over 100 interconnected factories in Vietnam, to make shoes and clothing. Cambodia, right next door, with even cheaper wages, will never be able to compete making running shoes. They do pick up some simple contract sewing, though>
Argentina can, and does compete at a level of well designed, mid level goods that are good quality but not "brand name"- clothing, shoes, jewelry, kitchen goods, knives, builders hardware, some sporting goods, and so on. The global market for exactly the kind of things Argentina does well has been growing.

in terms of cars, you couldnt be more wrong. All the Toyota Hi-lux pickups for South America are made here. 180,000 a year. And now they are making, and exporting, the HiAce van as well, with a target of 10,000 a year.
Currently Chevrolet, Citroen, Fiat, Ford, Mercedes, Nissan, Peugot, Renault, Toyota, Volkswagen, and several chinese electric vehicle companies,have factories in Argentina, all of which export high value added quality modern products.

nobody but china makes iphones or laptops or tv sets.
Argentina is completely normal in that respect.

 

[SlowWalker]

not even counting the interest rate increases, the cuts to pensions and social services and health care system.

To note again, Kirchener government gutted the pension funds and replaced them with debt (like US SS) instead of financing the government with debt. They took the money and loaded government agencies with debt. Milei isn't against funding the stuff, he has asked the government where they want the money to come from to fund it to maintain the balanced budget. Previous governments sold the farm.

I'm not suggesting he is making it easy, or that there isn't something he can do, but putting it all on him is ignoring the past.

Much like Milei, she also cut the education system in multiple ways, a move Milei is parroting. She slashed funding, and that led in turn to gigantic increases in tuition, less tenure, and a government control of a hitherto relatively independent system of universities.
Like many so called libertarians, they both actually want to exercise much more political and ideological control, not less.

But Britain is only one example- Austerity always makes things worse. Nebraska, the most Libertarian state in the USA has, since following the dogma, increased it deficit enormously, and yet, cut all kinds of services, thus increasing unemployment, bankruptcies both personal and business, and lost gdp and sales volumes compared with surrounding states that are still normal.

I gave you a list of countries previously were there were significant cuts that were all considered successes and did these things you mention also. Some hate Thatcher, others don't. The governments that game after were appreciative of what her government had done to right the ship whether or not they would have done the same. Its the pendulum swing of politics. But if you look at European countries, their economy has largely done nothing for the last 10+ years and they had slight negative interest rates even for times and free education in countries.

Canada in the 90s had huge debt levels. Ontario I think is still the most indebted non sovereign government in the world.
The federal government made major cuts which are still being felt today. They downloaded responsibilities to the provinces.
To deal with that the provinces also made major cuts. Chretien and Martin (Chretien's finance minister and then the next Prime Minister) did a great job in making Canada right again fiscally.
Universities started charging more, certain faculties became "professional" faculties and were deregulated and were allowed to raise tuitions as they deemed fit. in 2018 Ontario froze University funding, so they started bringing in even more international student that they can charge whatever they want to help fund the budget shortfall since they couldn't charge domestic students enough.

They sold off the CANDU nuclear technology to SNC Lavalin. I believe Skydome at the time was given a 99 year lease to private investors. Ontario had a major defining strike that changed labour in Ontario in the 90s when teachers went on strike for 2 weeks. They no longer have the ability to strike I believe. Ontario government expropriated land and built a toll road to alleviate traffic and then they gave it away for almost nothing to SNC Lavalin (I think) and an Italian firm for a 99 year lease and now its too expensive for people to use. However, following the recession from 89 and early 90s, you ended up with a boom that carried through. And Canada didn't suffer a 2008 housing crisis either.

You are evidently a deficit hawk- which, like libertarianism, has basically never been proven to actually benefit countries.
Its an ideological opinion based "economic" theory, which has not been proven to be beneficial in real life.

I am not a deficit hawk. I also don't mind acceptable inflation fo ~2% (real, not BS). It is needed for a growing economy.
But the deficit and debts needs to be responsible and manageable. I rather it be a result of investing in assets not just purely spending on services. I think its pretty clear what has happened since the pandemic globally with the massive deficits and jump in inflation which has resulted in a global cost of living crisis. Its literally across the world. So I don't understand how one can suggest unlimited spending is responsible.

Government, when it works, does not abandon everybody to the whims of capital, and shrug its shoulders when businesses dont survive.
Instead, its purpose is to help the people live better, not the corporations to profit more.
Again, look to Japan, or Sweden, Austria or France, Korea or Singapore, where healthy economies go hand in hand with a high standard of living, and GDP's are not the sole definer of success.

Again you are talking about normal countries where budgets and deficits were reasonable (except the outlier Japan), and have the ability to raise debt. Argentina does not have the ability to raise affordable debt. Therefore, the Keynesian model of spend in a down cycle and cut back spending in a boom is not applicable. What countries are typically running surpluses? Japan and Korea are suffering from inflation, even prior to the war. Japan was raising interest rates to counter it and putting the Yen carry trade at risk and global markets. The new PM is trying to spend her way to get the economy going again. Japan are savers, but their salaries like Korea and others aren't rising to keep up with the cost of life. I would hardly consider France's economy healthy. They are suffering, Macron had to raise the retirement age which brought riots to the country and they are still having an impossible time passing budgets. They are in a lot of trouble. The European economy I don't think is the example you think it is.

I am not using GDP as a metric of success. but Using debt and deficit as a percentage of GDP provides and idea if they are in affordable and responsible range or not.

 

[SlowWalker]

one question- when, exactly, was Argentina an "economic powerhouse"?
was it when the british owned the fincas, the slaughterhouses, the railroads, and the banks?
or when the country was basically closed to imports, except for the 35hp borgward engines Peron put int the rastrojeros?

Argentina has always been an isolated oddball, and certainly 40 to 50 years of revolving door military dictatorships didnt help.

I think most Argentines would be very happy for a return to humble, inexpensive products made locally that generated jobs, as opposed to a couple of percent of the citizens making a living exporting raw materials while the rest starved...

the era most argentines are most nostalgic about was a time when most people couldnt afford cars, but public transportation, including a nationwide train network, worked.
when no one could become a billionaire, but tens of thousands of people made a lower middle class wage.
a time when you could get a basic education at a state university, or a broken arm set at a public hospital, for free, rather than one when Buenos Aires was a world class destination for expensive facelifts...

I think until World War 1 Argentina was a powerhouse because they would export a lot to Europe.
The U-boats essentially shut down transatlantic trade.

In the 50s (I think), the opening of the Panama Canal and subsequent upgrades to it reduced the traffic that went around South America. Prior Argentina was a major stop on trade routes, warehousing, ship maintenance etc. This ended.

And then came the protectionist policies which protected industries and owners.

I think up until the 80s though Argentina still had the largest GDP in South America.

 

[JMHarris]

Has anyone heard of Stephanie Kelton? From Google AI:

Stephanie Kelton is a prominent economics and public policy professor at Stony Brook University (SUNY) in New York, best known for arguing that government deficits are not inherently dangerous and can strengthen the economy. She is a leading expert in Modern Monetary Theory (MMT), which suggests countries issuing their own currency can safely run deficits to fund public investment.

Key Aspects of Kelton’s Work:

• "The Deficit Myth": Kelton is the author of this 2020 bestseller, which challenges conventional views on federal budgeting.
• Modern Monetary Theory (MMT): Kelton argues that for a government that prints its own money (like the U.S.), a deficit is not a sign of financial weakness but rather a reflection of the private sector's surplus.
• Focus on Resources, Not Money: Kelton argues the constraints on spending are not tax revenue but available resources (labor, materials) and inflationary pressures, rather than a fixed budget.
• Policy Positions: She argues that deficits can be used to invest in infrastructure, education, and research to drive long-term productivity and growth.

MMT sounds great and I would love to see the US give it a try. But, in the end, it is just a theory, like the Austrian school and Chicago school of economics are just theories.

 

[JMHarris]

I think until World War 1 Argentina was a powerhouse because they would export a lot to Europe.
The U-boats essentially shut down transatlantic trade.

In the 50s (I think), the opening of the Panama Canal and subsequent upgrades to it reduced the traffic that went around South America. Prior Argentina was a major stop on trade routes, warehousing, ship maintenance etc. This ended.

And then came the protectionist policies which protected industries and owners.

I think up until the 80s though Argentina still had the largest GDP in South Americ

What history books are you reading????????????????????????????????????????????????????????????

 

[SlowWalker]

Has anyone heard of Stephanie Kelton? From Google AI:

Stephanie Kelton is a prominent economics and public policy professor at Stony Brook University (SUNY) in New York, best known for arguing that government deficits are not inherently dangerous and can strengthen the economy. She is a leading expert in Modern Monetary Theory (MMT), which suggests countries issuing their own currency can safely run deficits to fund public investment.

Key Aspects of Kelton’s Work:

• "The Deficit Myth": Kelton is the author of this 2020 bestseller, which challenges conventional views on federal budgeting.
• Modern Monetary Theory (MMT): Kelton argues that for a government that prints its own money (like the U.S.), a deficit is not a sign of financial weakness but rather a reflection of the private sector's surplus.
• Focus on Resources, Not Money: Kelton argues the constraints on spending are not tax revenue but available resources (labor, materials) and inflationary pressures, rather than a fixed budget.
• Policy Positions: She argues that deficits can be used to invest in infrastructure, education, and research to drive long-term productivity and growth.

MMT sounds great and I would love to see the US give it a try. But, in the end, it is just a theory, like the Austrian school and Chicago school of economics are just theories.

I'll try and help explain it.

She says "not inherently dangerous". This is what everyone says, literally Warren Buffet has repeated this many times.. Acceptable sized deficits are acceptable. Debt as a responsible amount is ok. Typically, the increase in debt at a rate less than the rise in GDP is acceptable. One of years aren't a big deal. When you break that it becomes an issue.

Everyone knows that borrowing money by issuing debt in your own currency is good. Yes, you can always pay off your debt because you can print more money. That just means you inflate it away and its worth nothing. This is literally what she is saying in the third point under Focus on Resources, not Money as (inflationary pressures). See every fiat currency and the Argentinian Peso is a great example.

 

[SlowWalker]

What history books are you reading????????????????????????????????????????????????????????????

From Gemini
During World War I, Argentina faced a period of profound economic restructuring, initially suffering a severe recession before pivoting toward a war-driven export boom. Despite Maintaining strict neutrality, Argentina's economy was highly dependent on European trade, and the war caused an immediate disruption in capital flows, a collapse in imports, and a temporary halt in foreign investment from Great Britain. [1, 2, 3, 4]
Key impacts on the Argentinian economy and transatlantic trade included:

1. Initial Crisis and Recession (1914-1916) [1]

• Trade Disruption: Transatlantic shipping was severely affected by German naval activities (submarine warfare) and the prioritization of shipping by the Allied powers.
• Capital and Imports: European investment ceased, and the banking system faced a crisis as loans were called in. Imports, particularly manufactured goods and coal, dropped sharply, causing massive price increases (inflation).
• Industrial Retraction: Although the crisis forced some domestic production, the manufacturing sector initially lacked the capacity to fill the void left by imported goods.
• GDP Decline: Argentina’s GDP contracted, with per capita GDP falling by roughly \(34\%\) between 1913 and 1917. [1, 2, 3]

2. The Wartime Export Boom (1917-1918)

• Demand for Foodstuffs: As the war continued, the Allied powers (primarily Britain) signed long-term contracts for Argentine grain and meat, causing a boom in exports.
• Export-Led Recovery: By 1917, high export prices boosted the economy, leading to a recovery.
• Rise of the USA: The United States replaced Germany and filled some of Britain's role as a major trading partner and supplier. [1, 2, 3, 4, 5]

3. Changes in Transatlantic Trade Patterns

• Shift in Partners: Before 1914, Argentina had a balanced trade relationship with Britain and Germany. The war forced a shift towards dependency on Britain and an increase in trade with the USA.
• Merchant Marine Challenges: Argentine trade was hindered by the need to secure safe passage through submarine-blocked waters. Germany sometimes offered safe conduct to Argentine ships, but also sank several of them, causing severe diplomatic tensions (e.g., the sinking of the Monte protegido in 1917).
• Submarines vs. Neutrality: Despite the sinking of ships, Argentina maintained its neutral stance, though this was challenged by the German "sink without a trace" policy. [1, 2, 3, 4]

4. Long-term Effects

• Emergence of Import Substitution Industrialization (ISI): The shortage of imports forced a slight increase in domestic manufacturing, including the growth of the local metallurgy sector (e.g., TAMET).
• Social Unrest: Inflation, high cost of living, and social inequality led to intense labor disputes and a massive wave of strikes, culminating in the Semana Trágica (Tragic Week) in 1919.
• Post-War Slump: Following the war, demand for agricultural products fell, creating new economic adjustment challenges as Europe began to produce its own food again. [1, 2, 4, 5]

For an in-depth look at the economic history of Argentina, you can read more on Wikipedia. For a specific analysis on Latin America's role in the First World War, this article from the Stiftung Preußischer Kulturbesitz is a helpful resource. [1, 2]