Is President Kirchner Improving The Lives Of Argentinos?

[ItsyBits]

The U.S. may not be ranked one way or another, but the U.S. has to run trade imbalances and current account deficits in order to ensure that the rest of the world has it's supply of dollars. Yes, there are some barriers, but the U.S. runs the most ATROCIOUS trade imbalance in the world because it has to.

Re: Europe. They are not bad examples. Even when you take out fuel, most countries have imported considerably more than they export for years, since 2000 in most cases.

Denmark, Sweden, Finland and Norway have all maintained mostly positive trade balance for most of the past 10 years. They provide all of these benefits because their economic policies make them money. Compare Spain vs. the countries you listed:


You curiously left out Iceland. Iceland, of course, suffered a major economic collapse in 2008. It looks like they learned a thing or two:


I'm not against trade. Quite the contrary. I agree that it has numerous benefits. But like everything, it has limits.

You are looking yourself blind at these trade balances and make conclusions that fits what you want to see.

I didnt mention Iceland because its hard to use as an example when its population is around 320 000 and because it went through a crisis as you mention, not because of the trade balance but because the 3 major banks couldnt pay their dept to UK and Holland.

Do these stats involve income from the tertiary sector? Spain is huge in tourism, per capita it generates more income from tourism than the U.S. I have read numbers around 50-60 billion USD / year directly from tourism. I am sure there some stats somewhere.
I am not saying that Spain is doing good. Or Greece thats seems like its only income is from tourism for anybody thats been there.
But the situation in these countries are bad because of other factors as well. Greece lied and cheated about their economy, joined the eurozone, went to the pub with Spain and Italy and had some expensive drinks. Who do you think had to pick up the tab?

-Germany!

Spain joined the eurozone and realized that they now could borrow money with the same awesome interest rates as Germany so they decided to go bananas with construction on borrowed money.

The trade balances are important, but dont try to make them the only thing.
Greece and Spain are as far as I am concerned only European versions of Argentina.

 

[sesamosinsal]

-Germany!

And why Germany?

Ah, yes, it's the only major European country that has money, and I guess it would since it essentially hasn't run a trade deficit in the past 40 years.

Clearly trade balances aren't "everything" -- I never said they were. There are many other important factors, such as current accounts, which would take into account the tourism dollars you mention. But the current accounts for most major European countries--France, Spain, and Italy--are pretty abysmal. Germany hasn't run a current account deficit since the early 2000s.

And how are my conclusions blind? It's pretty simple math: If a country (without a dollar printing machine) produces absolutely nothing and imports absolutely everything, how does that country pay for those imports? How does it survive in the long-term?

 

[prettejohn]

In my simplistic opinion, if Argentina were to drop all import tariffs it would be at the mercy of China and other NIC's and just about everything would be imported apart from basic food stuffs. As a consequence local industries would collapse. Would there be a sufficiently big service sector? The UK no longer makes a huge amount but is able to sustain its quality of life through the majority of people working in the service sectors.

 

[Matiasba]

Some say She is wonderfull !!!
The " Yuyo" soybean pays almost all her expenses.
Argentina has no savings !!!
Argentina has no credit, but chavez, ( almost gone)about 50% more expensivre than the IMF
lowest exportation of meet and milkery industry
no energy! power ligth , gas and fuel
trains are deplorable
roads are broken as never before
insecurity is minute to minute seen on the street
the police is gone, the costagards ( prefectura) in the streets, the national, guard not in frontiers but in the streets, they criticize major for operating a new police ( the other one is not htere)
not even a plan for tigtening the justice for jailing the theefs or killers
" she is perfect to acomplish the " upsidedown country"
unbelievable

This is not true!

look year by year, starting in 1992 to 2012

http://www.ipcva.com.ar/exportaciones/show_pivot.jsp

and

http://www.cronista.com/negocios/Por-primera-vez-en-su-historia-Argentina-exporto-mas-leche-que-carne-20120207-0010.html

 

[ItsyBits]

And how are my conclusions blind? It's pretty simple math: If a country (without a dollar printing machine) produces absolutely nothing and imports absolutely everything, how does that country pay for those imports? How does it survive in the long-term?

You do know that the dollar is losing ground in this aspect. Mostly against the Euro, but also because its getting more common to do business directly between two nations and currencies without using the dollar. But that obviously depends on what currencies we are talking about.

Talking about currency, why is Argentina keeping a highly overvalued Peso if the trade balance is the problem.
And once again, the supposedly high imports in Argentina. Isnt that mostly oil and electricity? Car- tv- cellphone-parts to be assembled?

Listen, I am sure you have the heart at the right place and maybe even some people in the government. I actually believe in social inclusion, free healthcare and public schools. I am from Sweden after all. But the methods this government is using seem very strange and extreme at times.

 

[Matiasba]

There's simply no incentive to do business here, unless one is glutton for punishment.

And thats exactly why nobody runs a bussiness here. Nobody makes money actually, there is not a big size upper class with billions of dollars made spuriously since the dictatorship.
There are not rich people that feel and felt comfortably doing bussiness in Argentina in the past, lets say, 40 years, getting into debt in dollars and then traspassing it to the state under an antidemocratic government that multiplied the external debt for six in a couple of years, no banks, no multinationals that came here take all the money and leave....

 

[Matiasba]

Some say She is wonderfull !!!
The " Yuyo" soybean pays almost all her expenses.
Argentina has no savings !!!
Argentina has no credit, but chavez, ( almost gone)about 50% more expensivre than the IMF
lowest exportation of meet and milkery industry
no energy! power ligth , gas and fuel
trains are deplorable
roads are broken as never before
insecurity is minute to minute seen on the street
the police is gone, the costagards ( prefectura) in the streets, the national, guard not in frontiers but in the streets, they criticize major for operating a new police ( the other one is not htere)
not even a plan for tigtening the justice for jailing the theefs or killers
" she is perfect to acomplish the " upsidedown country"
unbelievable

Not true!!

http://www.ipcva.com.../show_pivot.jsp


Compare 2003-2012 with the pre-Kirchner years or even with the 90s!!

as for the milk,

http://www.clarin.co..._646135397.html

 

[sesamosinsal]

You do know that the dollar is losing ground in this aspect. Mostly against the Euro, but also because its getting more common to do business directly between two nations and currencies without using the dollar. But that obviously depends on what currencies we are talking about.

Talking about currency, why is Argentina keeping a highly overvalued Peso if the trade balance is the problem.
And once again, the supposedly high imports in Argentina. Isnt that mostly oil and electricity? Car- tv- cellphone-parts to be assembled?

Listen, I am sure you have the heart at the right place and maybe even some people in the government. I actually believe in social inclusion, free healthcare and public schools. I am from Sweden after all. But the methods this government is using seem very strange and extreme at times.

I don't know anyone in the government, and my only objective is to see through the BS spewed from the private and state-controlled media here and abroad. I'm just like all of you--tired of the inflation, tired of the bureaucracy, tired of a lot of things, married to an Argentine, etc. We all have our reasons for being here, and I think the vast majority of us on this forum have our hearts in the right place.

The dollar isn't going anywhere. While it is declining in value versus other currencies amid endless QE in the U.S., Japan and elsewhere, it is still most widely used currency for international payments. As long as the U.S. government can continue to appease its selection of dictators in the Middle East--most notably Saudi Arabia--dollar hegemony will be here to stay.

If you have to import oil in dollars, you have to export in dollars. The dollar still accounts for some 60 percent of all international reserves held by central banks.

The only petroleum-exporting nation that converted its oil sales to another currency (EUR) since the dollar became the de facto global currency (1970s) was Saddam Hussein. Some two months after the invasion, those oil sales were converted back to dollars. And everyone knows what happened to him. Iran is experimenting with similar agreements. Heh.

Back to Argentina: Its complicated, that's for sure. I haven't been able to find the data for energy imports vs. other products, but my main point stands: Long-term trade deficits are detrimental to economic growth. They can't be sustained forever, even if you have a lovely credit rating from S&P, Fitch, and the rest. This was one of the biggest lessons for Argentina in the 1990s.

 

[Conorworld]

There is no doubt that the Kirchners have tried to make Argentina a better off country. However the trajectory is unsustainable and even if all those social programmes DO help, if it is based on an unsustainable process, the whole thing is a fallacy. That is the problem. All these import restrictions and dollar clamps are band-aids on a machine the Kirchners built that is slowly coming apart.

My country, Ireland had a similar situation recently. We all thought house price rises would last forever and the proceeds of this property boom would be endless, creating a virtuous cycle. It was not and look at Ireland now. The Argentine economy is just as unsustainable based on commodities. If and when commodity prices drop significantly, the empress will be found to have no clothes. Import restrictions in some vain attempt to create a domestic international base is a very anachronistic way of doing things in a world increasingly globalized.

Right now all these social programmes are modern day bread and circuses to anaesthetize a nation from the inherent and deeply rooted problems of the Argentine economy.

Finally, no matter how much you try and win a race with inflation by increasing wages to match it, you will ALWAYS lose to inflation. We are seeing that now.

So basically what we see as improvements in the lives of Argentines is based on an unsustainable process that has the high possibility of falling apart and erasing the benefits accrued over the last number of years.

 

[John.St]

What many fail to grasp is that our ability to export depends on imports due to the lack of developed industrial and high tech sectors. Most if not all agricultural machinery is imported. ...

Precisely.

The blanket import restrictions block import of much needed machinery to build and maintain an industry. In order to import an industrial robot or a lathe or whatever machinery needed, your company has to export wine, or sugar, or fruit, or ... Ridiculous.