In his infinite wisdom God created all men equal but He did not give the nations of the world equal national endowments. Some nations are so deficient in land, flora, fauna and minerals, while others are so abundant with these resources. At one end of the spectrum are countries like Israel and at the other end are countries like the United States.
One of the countries with which I have always been fascinated is Argentina—something that I guess was partly caused by the Hollywood films about the gauchos. But it was not until I made preparations to teach the subject Economic Geography at a Manila university that I realized how very well positioned Argentina was, economically speaking.
Argentina is one of the largest countries in the world. It is South America’s second largest country— Brazil is the largest—and its vast territorial expanse runs from the borders of Bolivia, Paraguay, Brazil and Uruguay, to the north, to Tierra del Fuego and the Strait of Magellan at the southern tip of South America. Were it not for Chile, it would link the Atlantic Ocean and Pacific Ocean. It has been estimated that only around 20 percent of Argentina’s vast land mass —consisting of the renowned pampas—has been developed; this area is the northeast corner of the country, centering on the national capital, Buenos Aires. Argentina lies mostly in the world’s temperate zone, which allow its economy to operate on a four-seasons basis. The land of the gauchos is a leading world producer of wheat, barley and meat, and Argentina wine has been acclaimed by connoisseurs as being among the world’s best. Argentina not so long ago discovered oil offshore in the Mar de la Plata area, and, when completed, the World Bank-financed Iguaipu Dam at the common border of Paraguay, Brazil and Argentina will rank among the biggest producers of hydro-electric power in the world.
From the foregoing description of Argentina’s economy, one should be able to conclude that, economically speaking, Argentina has everything going for it. Indeed, I have long believed that Argentina, whose population consists largely of people of European (Spanish, Italian and German) origin, should have attained First World status decades ago. But that has not happened.
On the contrary, since the 1970s, Argentina’s economy has lurched from crisis to crisis, necessitating recurrent outside intervention, usually in the form of International Monetary Fund-World Bank Group assistance (standby credits from the IMF and development loans from the WB). In the IMF-WB classification system, Argentina continues to be classified as an upper-middle-income developing country.
Argentina is once again in the midst of an economic crisis. Urged by its creditors and regional partners to seek international assistance, the Argentinian government early this year began negotiations with the IMF for a standby credit program. The announcement that was made simultaneously—Washington and Buenos Aires two weeks ago tried to apply a joyous touch—“Argentina Gets $50B Loan from IMF”—making it appear that good times automatically were ahead for Argentina and its long-suffering people. This country, which was the object of a succession of IMF standby programs in the pre-OFW-remittances era, knows fully well that that will not be the case. A host of mutually agreed instructions and limitations—especially on politically motivated government spending, such as subsidies and fiscal privileges —will be put in place, which, as in this country, will provoke much civil unrest and political turmoil. Argentina is in for a messy time in the near term, if its government does not quickly come to grips with economic reality.
But their country’s economic situation is not the only mess that the Argentinian people have to deal with. They also have to contend with the mess that their current national football hero, Lionel Messi, is creating in the World Cup tournament that is going on in Russia. Messi is largely being blamed for the recent humiliating 3-0 loss of Argentina, which is a world football power, to Croatia, which is not. The loss placed Argentina—the land of the legendary Diego Maradona—in danger of being knocked out of the tournament.
A mess in Buenos Aires and a mess in Russia: These are very messy times, indeed, for Argentina.