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Argentina in 2050

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Argentina in 2050 UNIVERSITY OF WARSAW INSTITUTE OF INTERNATIONAL RELATIONS ARGENTINA IN 2050 Accomplished by Hanju Kim Natalia Herrera Polina Borshchevska Yuet Mun Kwong Nicole Ostrowska-Cobas Developing Countries in International Relations Academic year 2016 1 TABLE OF CONTENTS 1. Introduction………………………………………………………………………...……...3 2. Political Situation……...…………………………………..………………………………4 3. Economic Situation…………………………………………………..……...………….....5 4. Relations with Neighboring Countries………………………..………..….……………....6 5. Regional and Global Influence.…….……………………………………………………...8 6. Population………………………………………………………..……………………….10 7. Conclusion…………………………………………..…………………………………....12 2 1. Introduction This report is devoted to discover the entire pattern of progress of Argentina until 2050 focusing on the different realms: political and economic growth, population, dynamics of relations with neighboring countries and the regional and global influence. The main idea is to portrait a general view of the country in 36 years based on predictions we derived from analyses that have been published. Nowadays Argentina is a country with a high level of development potential in comparison with some of the countries in the region, nevertheless Argentina still has to overcome plenty of obstacles in order to become a fully advanced state; for achieving this propose the government is trying to bind relations with other countries inside and outside of the region to increase the cooperation among them, relying on liberalistic IR theories this will allow the country to gain a more international position that will eventually lead to a prosperous future. To begin with, the political situation impresses with its progress in human development, simultaneously significantly improving the quality of living of its citizens and advancing the level of urban infrastructure. Although, in the economic field Argentina experiences steady growth, the likelihood of considerable boost is very high leading to economic stabilization. The influence in the regional and international arena is one of the most important aspects giving the fact it will completely change the perception of Argentina as an international player. Concerning population the odds are that the country will accomplish the maximum population in comparison with previous years, simultaneously experiencing an ageing society issue and a moderate fall in growth rate. The dynamics of relations with neighboring countries the main focus are countries adjacent to Argentina borderline: Chile, Uruguay and Brazil in a bigger scale and Paraguay, Bolivia in a minor scale; also the relations between Great Britain and Argentina was analyzed concerning the territorial conflict they had back in 1980’s. Through the analyses that we conducted, we derived to the possible outcome of Argentinian society in 2050. 3 2. Political Situation In the past 13 years, Argentina made a symbolic amount of social and economic progress. The Kirchners managed to reduce poverty by 70% and extreme poverty by 80%1. Unemployment fell from more than 17.2% to 6.9%. Nevertheless, economic growth has been slow for the past 4 years (averaging at 1.1%), inflation has been high and a black market for the dollar has developed. In light of this instability, newly elected president Mauricio Macri presented himself as a candidate for a better future.2 He started a new way of governing by undoing the populist policies of his predecessor. Export taxes on agricultural products such as wheat, beef and corn were scrapped and taxes on soybeans (biggest export) were reduced in mid-December. Shortly after, the new finance minister lifted currency controls thus allowing peso to float freely. In an attempt to end Argentina’s exclusion from the international credit markets, the new government met with foreign bondholders through a mediator. The changes seem to be working as the freed currency dropped by 30% - an improvement for exporters. Consequently, it elevated the inflation rate by more than 25% since Mr. Macri took office. The government is keen on persuading businesses and trade-union leaders to control their prices, however, those are little disposed to do so. The president is also demanding the resignation of General Attorney Alejandra Gils Carbó - an independent officer appointed by the congress with life tenure. The resignation is demanded on the grounds that she is a supporter of the former government – critics emphasize his hypocrisy by stating the fact that he appointed a former councillor of his own party as general attorney of the city of Buenos Aires. The Supreme Court is left with three members and he can appoint his own candidates, hence ensuring a majority. Having briefly explained the current political situation in the country, a rough projection can be made for the near future. Even though the Senate is controlled by Peronists, many of them need support from the central government to restructure their debts - this calls for a form of cooperation. By undertaking rapid transformations and taking such extreme measures to achieve them makes the future uncertain. If they manage to reduce inflation and create economic growth, the government will most likely gain more support and it will secure closer ties with the West. By doing so it may also alienate the neighbouring countries which have a different political and economic structure. It’ll be a tough road, ergo failure is also likely and if it happens the political system may pull a tango turnaround. There have been rumors in the media that Fernandez might try to return for a third term as president in 2019. 1 SEDLAC, poverty. Data from 2003 to mid-2013, based on independent estimates of inflation (http://sedlac.econo.unlp.edu.ar/eng/statistics-detalle.php?idE=34 – accessed 5.04.2016). 2 International Monetary Fund 4 3. Economic Situation In 2016, with a Gross Domestic Product (GDP) of more than US$ 540 billion, Argentina is one of the largest economies in Latin America. In recent years, the country has focused on economic development with social inclusion. Argentinian economy enjoys valuable natural resources. It is a leading food producer with large-scale agricultural and livestock industries. It is among the world’s largest beef and soybean exporters and is the leading producer of sunflower seeds, yerba mate, lemons and soybean oil. The opening of the Chinese market has helped boost the country’s export potential.3 The country is pursuing an active foreign policy agenda and represents Latin America in the G-20, together with Mexico and Brazil. The Argentinian economy enjoyed significant growth over the past decade. Argentina invested heavily in health and education, areas which account for 7% and 6% of GDP, respectively.4 First of all, from the performance of Argentina since the 1980’s, its very likely to become the top 20 biggest economy in the world in 2050 due to the huge investments in the fishing industry and fish processing equipment become modernized. The export will be highly expanded. Secondly, Argentine government is developing the new crops and non-traditional product development plans, especially in grain processing, grain ancillary products, processed foods, fruits, flowers and other organically grown crops.5 Furthermore, the government succeeded in establishing mechanisms for the vaccine, and the gradual improvement of health conditions in order to enhance the confidence of trading partners, which is the strong contributing factor for current situation and also for the future. Positive improvement of the Argentinian government and the technology will successfully derive them to ease the trade restrictions form other countries on animal health problems in Argentina.6 Lastly, if further tap the potential of agriculture, whether it is to meet the domestic needs or for the increase in exports, will need to invest more in infrastructure (including frozen, processing and transportation equipment); irrigation; fertilizers and pesticides; marketing; promotion and the information system.7 Credit mechanisms are also necessary to improve conditions for agricultural development potential in Argentina.8 According to the analysis that we have made, we can clearly conclude that Argentina has a mighty potential to become the World Top 20 economy in 2050. 3 Chudnovsky, Daniel, and Andrés López. The elusive quest for growth in Argentina. Macmillan, 2007 4 Cimoli, Mario, Giovanni Dosi, and Joseph Stiglitz. Industrial policy and development: The political economy of capabilities accumulation. Oxford University Press, 2009. 5 Cavallo, Domingo, and Yair Mundlak. Agriculture and economic growth in an open economy--the case of Argentina. Vol. 36. Intl Food Policy Res Inst, 1982. 6 Bruno, Michael. Inflation Stabilization: The Experience of Israel, Argentina, Brazil, Bolivia, Mexico. Mit Press, 1988. 7 Delacroix, Jacques, and Glenn R. Carroll. "Organizational foundings: An ecological study of the newspaper industries of Argentina and Ireland."Administrative Science Quarterly” (1983): 274-291. 8 Albornoz, Facundo, Darío Milesi, and Gabriel Yoguel. "New Economy in old sectors: some issues coming from two production networks in Argentina."DRUID summer conference. 2002. 5 4. Relation with Neighboring Countries Argentinian borders are touching with five Latin American countries, and having one territorial conflict with European country. Northern part of Argentinian border is contiguous with Paraguay and Bolivia, while the Eastern part is touched with Brazil and Uruguay. 9 Western and Southern border is adjacent with Chile. Argentina
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