AHC: Argentina as an economic powerhouse

With any POD in 1930 or 1960, make Argentina have a developed economy with GDP per capita similar to Spain or Italy, high valued export-based economy similar to Japan or Germany, and a stable political climate by 2010. Bonus points if Peron was the leader.
 
Even without the horrible successive rulers, the end of both WW was catastrophic for Argentina ... maybe a intelligent leader that uses the war times surplus to modernize the country? ... not sure.
 
Not that knowledgeable about Argentine history, but I don't know how much blame Peron can get when his people came to power after the Infamous Decade.

For the OP, maybe if the 1930 coup could be avoided?
 
There are several reasons why Argentina did not continue to be as prosperous later in the 20th Century as it was earlier. It's importan to understand the basis of early Argentinan prosperity and why it did not continue.

First, Argentina's early prosperity was based on exporting agricultural products to Europe. It used foreign (primarily British) capital and technology to improve its agricultural production. British paid for the railroads, refrigeration technology, and brought in advances in cattle breeding, fencing, seed selection, and processing technologies that increased Argentiean productivity. Argentinean manufacturing provided for the domestic market only under a protective tariff for import substitution.

In the early 20th Century, this was enough to build a fairly prosperous economy. But it was vulnerable to changing conditions because of these weaknesses:

1) It relied on Argentina earning lots of cash through its export of agricultural products.

2) Argentina was heavily reliant on foreign capital. Not only does that mean money for improvements were dependant on the international financial markets, it also meant Argentina did not control the development of its own infrastructure as foreign businessmen's purpose was not to develop the Argentine economy, but to make their own investments profitable.

3) Argentina was heavily reliant on foreigns for improved technology and commercial knowledge.

4) Argentina did not have a large enough domestic market to sustain a competitive industry and enjoy economies of scale in comparison to other countries.

5) Argentina's government, although a nominal democracy, never had a strong tradition of the rule of law which limited the powers of government, kept rulers in check, and discouraged corruption.

6) The Argentine economy was not prosperous enough to pay for a large social welfare state along European lines.

Under Peron, all these weaknesses came into play. Peron wanted to build a welfare state that was beyond Argentina's ability to pay. His short term solution was to seize control of export revenues to increase government income. By limiting the ability of exporters to earn money, he gave them a big disincentive to invest in more productive technology and managerial knowledge. This made the economy less dynamic. As technology improved around the world, Argentine industry became even less competitive. Which meant for political reasons it needed even more protection. But subsidies encourage inefficiency, and higher import duties meant Argentinean companies could less afford the needed foreign technology that would help them become more competitive. Furthermore, the lack of rule of law meant Peron could stay in power for a long time to perpetuate his bad policies despite the growing corruption. This is a simplified version of what happened, but it gives us some insight on what needs to be avoided.

A) Argentina must eliminate export taxes and controls so that its export industries can continue to grow.

B) Argentina needs to keep its access to the international credit markets while encouraging the growth of its own financial centers. It needs to create the kind of banking regulations that would transform it into a financial capital of Latin America.

C) It needs to fun its own plan of internal improvements to encourage economic development across the country. Which means it needs to increase taxes to pay for the new infrastructure. Presumably, a long term plan is needed to prioritize what gets built first as it won't be able to pay for eveerything it needs.

D) It needs to encourage technological development through easier access to foreign machine tools, and encourage indigenous know-how by boosting engineering education and other craft skills.

E) It needs to expand its home market in order for its industries to enjoy economies of scale. Some kind of greater Southern Cone customs union would be good, possibly including Brazil. Mercosur a few decades earlier.

F) Strengthen the rule of law, encourage strong separation of powers, punish corruption.

G) Determine the proper level of welfare state that Argentina can have based on existing revenues, and don't increase it until economy has grown enough to pay for it. Anything more will simply hurt the economy too much and end up eating the seed corn.

It needs to have an outward looking, dynamic economy. Unfortunately, this is everything the "experts" think won't work after WWII. although Peron himself did much harm, even without him Argentina would need to change some things as the conditions of the early 20th Century no longer applied postwar.

But it can be done. It would require a lot of things changing though, perhaps changing the 1930 Coup (as JFP suggested) or something else earlier could butterfly a lot of the needed things.
 
Actually, no government did more to increase the domestic market than Peron who, authoritarian as he was, was also indisputably the most popular politician of his age and would have won any election as long as he could be elected (such as, IE, the British PMs). And while he did structurally weaken the economy, the real and more serious damage was done by the military juntas that followed, all of which were antiperonists, and Menem, who destroyed whatever control on infraestructure the country had as well as large portions of said infrastructure and the local industry.
Of course, Peron has worse press abroad.
 
The Argentine economy was hurt by the recovery in post-war Europe which bought grain from America instead of Argentina with the Marshal Plan money. As Europe started making consumer products again, the Argentine manufacturing sector was again unable to compete. IOW their main customers were Europeans but they had to compete with America and Europe for that market. Their goods weren't superior and their wages weren't particularly low. They were just not competitive enough.
 
Actually, no government did more to increase the domestic market than Peron who, authoritarian as he was, was also indisputably the most popular politician of his age and would have won any election as long as he could be elected (such as, IE, the British PMs). And while he did structurally weaken the economy, the real and more serious damage was done by the military juntas that followed, all of which were antiperonists, and Menem, who destroyed whatever control on infraestructure the country had as well as large portions of said infrastructure and the local industry.
Of course, Peron has worse press abroad.

The problem with Juan Peron is that he tried to close the Argentina from trade and wanted the industrialization quickly which Argentina doesn't have a capability at that time. He wanted to make a welfare state even though it is beyond Argentina's capacity. He never realized that creating a close ties with the US would be more beneficial for Argentina than emphasizing the discredited "economic protectionism and nationalism".
 

RalofTyr

Banned
Che boludos. Estaba vivir a capital federal por la primavera. Las Argentinas toman muchas mates yerba y comidan muchas empanadas gordas para poder trabajar a la mañana.


Though Argentina has about 1/3 the land-mass of the USA, they would have difficulties in being a power-house. It's true, a lot of Europeans have invested in Argentina and their standard of living is the one of the highest in the region. Even now you can call them a "Power-house".

One thing is certain, apart from leather goods, I'm not buying anything made in Argentina; everything I bought while down there has already broke or ripped or the zipper fell off. The stuff bought at the Dollar-Store from China is of better quality.

They do have a high-standard of living comparable to the US, but the Argies seem too adjusted to their way of life. They don't seem too ambitious, but very content with their way of life.

They have vast natural resources in the Pampas and to the north (the land's flat as Kansas). But, they love their cities and you will find very few houses spread out. Sure, there were farms, but to exploit the land, you have to go there. The Patagonia desert was empty compared to the deserts of Nevada (comparable in climate). On the Omnibus, if we got lost off of the main roads, we were history.

One Porteño, told me that he visited Los Angeles and saw how professional the LAPD compared to the federales. Another told me that, "In America, things work".

Argentina is already a power-house, but a power-house compared to other Latin countries.
 
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