Argentina stays rich

Argentina at the turn of the century was the world's richest nation in terms of GDP Per Capita. Today it is one of the few nations in which rates of poverty are increasing.

How could Argentina stay rich and what if they did stay rich?

I'm not asking for an Argentina-wank. I'm asking about what if there wasn't the Argentina-screw of OTL?



I imagine, due to its relative geographic isolation from much of the world, Argentina wouldn't be all that interested in projecting power overseas. Maybe it'd be like Canada or Australia (which were comparably wealthy) as a prominent middle power that involves itself in humanitarian actions and whatnot.


If Argentina has a GDP per capita comparable to that of Australia (another immigrant nation that is relatively isolated geographically and very resource-dependent) then it'd be 4.85x richer per-person than OTL. If Argentina has a GDP per capita that's ~1.1x that of the US (sort of where it was in 1900 OTL) then it'd be 5.9x richer per-person than OTL.


I imagine a wealthier Argentina would mean a higher population. More Brazilians, Bolivians, Chileans, and Paraguayans fleeing military governments for one. More immigration in general on the whole. Australia is 30% foreign-born today. I can see Argentina being 30-50% bigger in population.

High per capita GDP + higher population would mean a national economy that could be around Germany-sized.

I imagine the Falklands issue might have been settled a bit differently. Maybe the Beagle Islands too.
A stable Argentina might set up an Argentina-Uruguay-Paraguay customs union.
 
Saying Argentina was among the richest countries in the world by the turn of the 19th century is literally like saying Libya was among the richest countries in the world by the 1960s and then it fell for reasons. The first part about Libya it's true. It's also because underpopulated countries with valuable natural resources end up with high gdps per capita, which say little about how that wealth is spread among it's population and about it's relative power in the world stage.

So, on topic. Contrary to popular perception, the "Argentina-screw" actually happened by 1975 as a consequence of ill-advised policies to deal with the fallout of the 1973 oil crisis, the deliberate anti-industrial policies of the 1976-1983 dictatorship and the Latin American debt crisis of the 1980s. I don't know what kind of POD untangles that gordian knot unless we butterfly away the 1973 oil crisis and the world turns into a different place.

Let's say we don't butterfly away the Yom Kippur war, so the oil crisis happens as scheduled. Let's say our POD is that Peron chooses a competent VP (not exactly a hard POD). Peron dies on schedule. His successor takes the British proposed deal on the Falklands: the UK recognizes Argentine sovereignty but keeps a lease for 100 years. Yep, that happened. https://www.lanacion.com.ar/politic...-ingleses-a-peron-por-las-malvinas-nid1455991 https://www.infobae.com/sociedad/20...devolver-las-malvinas-y-argentina-lo-frustro/
Now, regarding the economic and security front, the new president has a tough job ahead. A competent president wouldn't listen to Celestino Rodrigo and his mentor, Ricardo Zinn. But there is also no magic solution either, so the economy is going to be hurt. On the security front, he'd need to fight the left wing insurgents through legal(ish?) means so no popular support for coup emerges. Bonus points if Campora doesn't pardon the imprisoned insurgents before his resignation.
But I don't see how the entire continent marches into the Latin America debt crisis except Argentina. So I think any reasonable POD which doesn't touch the oil crisis will result the Argentine economy suffering through the late '70 and '80s, although Argentina could still emerge a lot better than in OTL.

I kind of think a more moderate but best POD, maybe in addition to a far better handling of the issues of the 1970s, is to have Menem (or whichever president rules at the 1990s if his presidency is butterflied away) choose a different method to fight inflation than pegging the peso to the US dollar. That way, when the Russian and Brazilian crisis hit later in the decade, the currency value isn't seen as such a hard political choice. So inflation takes longer to be tamed in the early '90s but by the late '90s, the Argentine currency can be left to devaluate in a far more moderate and gradual way than the 2001-2002 debacle. The economy still suffers but since there is no need to get into debt to keep the peso in a straight-jacket, the 2001 default may be avoided (specially so if the 1970s downturn wasn't as harsh). Enter the combo of high commodity prices + low interest rates of the 2000s and Argentina stands as a country with a reasonably well educated population, eager to compete in the global work market, low interest rates to both refinance its debt and invest in infraestructure and relative economic stability and prosperity. This ATL government would still need to fight the red tape, but Argentina could have solved the medium income trap by now in this ATL.
 
Maybe they find new customers or diversify their economy. So maybe other South American countries get rich and so they sell meat to them.
 
Hmmm, this one's actually pretty hard.

While I agree with sole of what @juanml82 said I don't agree completely. Argentina's economic problems started way before the 70's and were deeply tied to both the international market and local politics.



Honestly I think that first of all you need to reinforce democracy somehow. Avoid the 30's coup and the legitimisation of such that came next. Then have Argentina embark on a more sensible industrialization, one not lead by a populist movement but focusing more on competitive light industry with some heavy mixed in and then military ones (this could eventually help with things like airplane production and the like, which could offer the country a powerful force in the international market).


Honestly it is a very hard question and I can't be completely happy with any answer I could offer.
 
Hmmm, this one's actually pretty hard.

While I agree with sole of what @juanml82 said I don't agree completely. Argentina's economic problems started way before the 70's and were deeply tied to both the international market and local politics.



Honestly I think that first of all you need to reinforce democracy somehow. Avoid the 30's coup and the legitimisation of such that came next. Then have Argentina embark on a more sensible industrialization, one not lead by a populist movement but focusing more on competitive light industry with some heavy mixed in and then military ones (this could eventually help with things like airplane production and the like, which could offer the country a powerful force in the international market).


Honestly it is a very hard question and I can't be completely happy with any answer I could offer.
The economy grew a lot under the Ongania dictatorship and IIRC also during Aramburu's. While avoiding the 1930 coup and the legitimization of it would greatly improve Argentina for a variety of reasons, the economy isn't one of them.

I agree with competitive light industry, but I'm not sure where the rational short term incentive would be. If the State remains hands off, profitable industries for the domestic markets will continue to grow, but I'm not sure they'll have much of an external market to export to, or that they'll be competitive enough. Their owners will still be rich and bribe politicians in order to keep them hunting in the zoo (ie, relatively closed domestic market). If the State intervenes, it will do so in ways that politically benefit the government in the short run, which is OTL. South Korea did it with strong government backing because it was exporting to the USA. So idk. Unless some other country(ies) are buying Argentine industrial goods there is little short term incentive to be globally competitive.
 
The economy grew a lot under the Ongania dictatorship and IIRC also during Aramburu's. While avoiding the 1930 coup and the legitimization of it would greatly improve Argentina for a variety of reasons, the economy isn't one of them
If nothing else political stability makes you more attractive to investment and gives the locals a more stable environment to develop.
I agree with competitive light industry, but I'm not sure where the rational short term incentive would be. If the State remains hands off, profitable industries for the domestic markets will continue to grow, but I'm not sure they'll have much of an external market to export to, or that they'll be competitive enough. Their owners will still be rich and bribe politicians in order to keep them hunting in the zoo (ie, relatively closed domestic market). If the State intervenes, it will do so in ways that politically benefit the government in the short run, which is OTL. South Korea did it with strong government backing because it was exporting to the USA. So idk. Unless some other country(ies) are buying Argentine industrial goods there is little short term incentive to be globally competitive
That's a good point.

I guess we would need at least two or three forward looking administrations and at least dome involvement of the state. The problem is reaching that balance where the intervention helps development without making the industriest dependant on the state.

The problem is that the world stage and the local situation don't favour an economically stable Argentina. I guess that maybe starting our partnership with Brazil early but with Argentina taking the lead instead the other way around?

Maybe have the UK break their colonial policy and move some industry here during WW1/2?
 
Argentina went from being around the 10th richest country in the world in 1950 to being around the 20th by the Oil Shock Crisis in 1973. Argentina no doubt made gains in that time period, but they were smaller than almost everywhere else in the developed world.
 
Argentine prosperity, just like Australia, was reliant on the globalised economy that was destroyed by WW1. There is little Argentina can do about this internally.
 
Peron dies in an accident while young.
Occam's razor supposing.

Peron was not responsible for the collapse of Argentina, that is a cold war meme that outlived it usefullness, as the argentinian industry kept growing during his government and by creating a welfare state and some social security he managed to curbe poverty and increased the amount of the population that could afford to buy argentinian goods, thus creating a keynesian multiplicator.
 

Marc

Donor
Peron was not responsible for the collapse of Argentina, that is a cold war meme that outlived it usefullness, as the argentinian industry kept growing during his government and by creating a welfare state and some social security he managed to curbe poverty and increased the amount of the population that could afford to buy argentinian goods, thus creating a keynesian multiplicator.

Well, I side with Jorge Luis Borges on the damage done to Argentina as a nation. Economics doesn't exist in a vacuum.
But then I'm nostalgic about classical liberalism, at its best. Yes, I know a hopeless dream.
 
Well, I side with Jorge Luis Borges on the damage done to Argentina as a nation. Economics doesn't exist in a vacuum.
But then I'm nostalgic about classical liberalism, at its best. Yes, I know a hopeless dream.
That's tribalism. The upper class of the city of Buenos Aires, frightened by the evohl black tribe coming from across the river to pollute their water with their dirty and contagious feet. It continues to this day.
 
Well, I side with Jorge Luis Borges on the damage done to Argentina as a nation. Economics doesn't exist in a vacuum.
But then I'm nostalgic about classical liberalism, at its best. Yes, I know a hopeless dream.

Have the classic liberals to win in 1946 and you might have a communist Argentina on the following election.

Their ideology was good for the 19th century, but the lack of the most basic reforms and the fact that Argentina was behind even it's natural enemy, Brazil, on therms of industrial development and on social reforms by 1945 is the proof that they overstayed their welcome.
 
Argentine prosperity, just like Australia, was reliant on the globalised economy that was destroyed by WW1. There is little Argentina can do about this internally.
Argentina, actually, could not be more different from Australia, and the economic similarity in the pre-Depression era is utterly superficial. Whereas Australia is the oldest and most infertile, but geologically least unrepresentative, Quaternary landmass, the Southern Cone is almost beyond doubt the most nutrient-rich continent the Earth has known in its entire geological history. [Consider that the hypereutrophic soils on which Argentina’s early prosperity was based are entirely absent in the fossil record of soils until the Eocene and extremely rare until the Pliocene].

New Zealand – less hypereutrophic but even poorer in natural resources than Argentina – is an incomparably more accurate comparison. Even without the political instability or currency crises, New Zealand has suffered essentially the same economic decline that Argentina did. It is possible to identify several factors that accounted for the economic fate of New Zealand and Argentina:
  1. improved soil science that lessened their comparative advantage in agriculture, shifting this advantage to the ancient – but hot and flat – Australian and African continents
  2. poorer terms of trade due to advances in lithophile metallurgy in the interwar years – being young landmasses, New Zealand and Argentina lack these newly exploitable lithophile ores, which are concentrated in ancient Australia and to a lesser extent Africa, Brazil and India
  3. extreme urbanisation and consequent political power of urban consumers and large nontradable sectors that dictated overvalued currencies for many generations, which further affected their farm sectors beyond (1)
  4. underpopulation – unique in global terms given their fertile soils, abundant water supply and comfortable climates – that made industrialisation quite uneconomic in the Southern Cone and New Zealand even as their agricultural comparative advantage declined
How these problems would have been averted is difficult to see.

If the Classical Gold Standard had survived permanently – a challenge for the alternate historian I discuss here – Argentina (with Chile, Uruguay and New Zealand) would have seen their exports become cheaper as agricultural technology advanced. This would have theoretically allowed their farm sectors to improve in technology and perhaps maintain their relative comparative advantage. The trouble is that the Southern Cone and New Zealand lack the superabundant land supply of Australia and even Africa or Brazil. Thus, unless Australia’s mineral wealth would have become sufficient to price its agriculture out of the world market – an ecologically wholly desirable outcome but one I possess zero certainty of – their comparative advantage in agriculture would have inexorably declined and they had little to replace it with.

Alternative means other than maintenance of the Classical Gold Standard have not occurred to me. Point (3) above makes it impossible for me to see a possibility of more free-market politics in the Southern Cone and New Zealand, unless their history before the boom had been based upon smaller and more numerous farmers. Such a possibility would have necessitated a departure point many decades before the Great Depression, and possibly even radically different colonial histories.
 
Peron was not responsible for the collapse of Argentina, that is a cold war meme that outlived it usefullness, as the argentinian industry kept growing during his government and by creating a welfare state and some social security he managed to curbe poverty and increased the amount of the population that could afford to buy argentinian goods, thus creating a keynesian multiplicator.
Peron did good things but let's not forget that he was also a strongman El Duce fan who deepened the political divisions of the country and while he did give birth to many useful industries he also pushed for many inefficient ones and/or awful economic state policies that are still haunting us 70 years later.

Saying no to the meme doesn't mean we should become apologists either.
But then I'm nostalgic about classical liberalism, at its best. Yes, I know a hopeless dream
Classic liberalism never existed anywhere, but specially in Argentina.
It's like "true" socialism. A "no true Scotsman" fallacy.
underpopulation – unique in global terms given their fertile soils, abundant water supply and comfortable climates – that made industrialisation quite uneconomic in the Southern Cone and New Zealand even as their agricultural comparative advantage declined
This is extremely important and what most people forget when spouting the "Argentina could have been South America's USA" BS. Argentina is fucking empty.
To give an example, in 1880 Argentina had around 2 million people while the US had 50. The US of SA my ass.
 
This is extremely important and what most people forget when spouting the "Argentina could have been South America's USA" BS. Argentina is fucking empty.
To give an example, in 1880 Argentina had around 2 million people while the US had 50. The US of SA my ass.
It's not just "being empty". Egypt has twice the current population of Argentina stuck together by the Nile and that doesn't make it a rich country. But if we compare the USA and Argentina at the end of the 19th century, how about comparing literacy rates? IIRC the USA illiteracy rating around 1900 was less than 20% while Argentina's was about 50%. Something all the fans of pre-WWI Argentina seem to dismiss as an irrelevant detail for some reason.
 
It's not just "being empty". Egypt has twice the current population of Argentina stuck together by the Nile and that doesn't make it a rich country. But if we compare the USA and Argentina at the end of the 19th century, how about comparing literacy rates? IIRC the USA illiteracy rating around 1900 was less than 20% while Argentina's was about 50%. Something all the fans of pre-WWI Argentina seem to dismiss as an irrelevant detail for some reason.
I mean, absolutes matter more than percentages.

Argentina had around 6-7 million people, so 50% of that is some 3'ish million. The USA had 70 million, 20% of that being 14 million.

So the US still had more than double the population of Argentina in totally literate people.


Also, I'm not sure you got those numbers right. I'm pretty sure Argentina had a small percentage lead but not by that much.

https://ourworldindata.org/literacy

Seems to imply the US had around 20-30% illiteracy, not literacy.



Also, Egypt is an awful example, because it lacks the easily accessible natural resources, development and stability for that (they are in the Mediterranean and thus destined to be Europe's plaything). Never mind that they had more or less the same population as Argentina around the time.

What made the Great and Secondary powers into what they were, are:
1) Resources (either their own or their conquered people's)
2) Big populations (which leads to) and big internal markets (UK, Germany, US, France, Russia*)
3) A well diversified and developed economy.

Argentina was lacking in items two and three and when we tried to rectify 3 we did a half assed job at it and/or stated a little too late.


*For all that their country was awful they were still powerful just for their sheer size, in both population and territory.
 
I mean, absolutes matter more than percentages.

Argentina had around 6-7 million people, so 50% of that is some 3'ish million. The USA had 70 million, 20% of that being 14 million.

So the US still had more than double the population of Argentina in totally literate people.


Also, I'm not sure you got those numbers right. I'm pretty sure Argentina had a small percentage lead but not by that much.

https://ourworldindata.org/literacy

Seems to imply the US had around 20-30% illiteracy, not literacy.



Also, Egypt is an awful example, because it lacks the easily accessible natural resources, development and stability for that (they are in the Mediterranean and thus destined to be Europe's plaything). Never mind that they had more or less the same population as Argentina around the time.

What made the Great and Secondary powers into what they were, are:
1) Resources (either their own or their conquered people's)
2) Big populations (which leads to) and big internal markets (UK, Germany, US, France, Russia*)
3) A well diversified and developed economy.

Argentina was lacking in items two and three and when we tried to rectify 3 we did a half assed job at it and/or stated a little too late.


*For all that their country was awful they were still powerful just for their sheer size, in both population and territory.
I got the numbers right, I wrote that the USA had a 20% illiteracy rate. And yes, the USA had more than double the population of Argentina in literate people. That means more skilled workers for more complex production, more patents, more science research, more informed voters, etc, etc.

Argentina is not a resource rich country, that's a myth. Germany is a resource rich country. The USA is a resource rich country. The UK is a resource rich country. They have the kind of resources, also easily available through relatively cheap logistics, a literate society with money to expend can turn into industrial goods, adding value and creating jobs in the process. Argentina didn't have that.
 
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