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"Indec , said that industrial output in the first five months of this year was 7.5 per cent up on the same period last year as the rapid advance out of recession continued. Agricultural chemicals, the motor and tyre industries and cement production led the advance. Vehicle production in the first five months of this year was 40 per cent ahead of the same period of 1996. Argentina's economy shrank 4.6 per cent in 1995, hit by the Tequila effect, the wave of financial instability which follow"
" Argentine market has inextricably linked the country to global trade and capital markets. This now dictates most of the economic agenda. Thus, the idea that Argentina will revert to its old ways ignores economic reality. Furthermore, it greatly misinterprets the discontent among the electorate. The railing at the market -- guaranteed to pick up steam when Lester Thurow, the world's expert on the evils of unfettered capitalism, arrives here for a seminar in mid-June -- is distracting Argentines from the real problem. Even the ersatz market system, with all its anti-competitive leftovers from the past, is an improvement over the 1980s. It is true enough that a 21% value-added tax, high interest rates and 17% unemployment damp enthusiasm for the economic agenda, but solutions to all of this won't happen without another kind of reform. Until Argentina advances its political and judicial systems toward greater democracy and respect for the rule of law, the gains it has made in economic policy will remain in jeopardy and its prospects for long-term prosperity will remain suspect. Argentines know well that they cannot go back to the silly thinking of the ""lost decade"" of the 1980s. In 1988 President Menem took office six months ahead of schedule because his predecessor, Raul Alfonsin, resigned, calling the country ""ungovernable."" In 1989, annual inflation was nearly 5,000%. In response to the consuming chaos, the pragmatic Mr. Menem introduced the Argentine Convertibility Law in 1991 and accompanied it with a massive privatization program. In addition to currency convertibility he took other steps to pry open the highly protected Argentine economy. Even through a dramatic withdrawal of banking assets in 1995 sparked by the Mexican peso crisis, the president stayed the course. Some members of society lost privileges and still complain bitterly. But for most Argentines, the combination of stability and growth has left them far better off than in 1989. And yet the country is brimming with civil discontent. In fact, almost all of the clamor against the Menem government is, in the end, a rallying cry against corruption and the unwillingness to devolve power. While Argentines in the private sector have met the challenge to increase their competitiveness, they look around at a political culture that shamelessly flaunts its privileges, guards its power and provides itself impunity from justice. Historically"
"."" Argentina was still one of the most closed economies in the world, Mr Sachs said. Exports as a percentage of gross domestic product were only 9 per cent, the second-lowest among major countries. Only Brazil was lower. ""Argentina says it is doing fine by exporting to Brazil, Brazil says it is doing fine exporting to Argentina, but when is Mercosur going to start exporting to the rest of the world?"" he asked. Argentina's exports grew 14 per cent last year to $23.8bn, and are forecast to grow 10 per cent or more this year. Last year a third of exports went to Mercosur, the customs union that groups Argentina, Brazil, Paraguay and Uruguay, with Bolivia and Chile as associates. The rise in exports was based in traditional and primary sectors such as agriculture and energy, Mr Sachs said. The country had to diversify, and the government "
"___ Document 214 of 400 Record Argentine tax take AMERICAN NEWS DIGEST Author: Doman, Matthew Publication info: Financial Times [London (UK)] 05 Feb 1997: 06. http://search.proquest.com/docview/248324925?accountid=28034 Abstract: None available. Full text: Record Argentine tax take A combination of higher taxes and a strengthening economic recovery push"
"aulo, Brazil's Bovespa index of the 57 most traded shares was up 2.3 per cent by mid-day. Argentina remains dependent on inflows of foreign capital to service its $100bn-plus external debt, and bridge its fiscal deficit, which it aims to cut to around 1 per cent of GDP this year. The country has yet to raise $2bn to complete its 1998 borrowing programme, while next year's needs are estimated at $14bn. News of the negotiations came as Roque Fernandez, the economy minister, prepared to present an austere 1999 budget to Congress in a further attempt to ""differentiate"" Argentina from other emerging markets. Bank deposits have so far shown no signs of slipping, signalling continuing confidence in ""convertibility"", the currency board system that pegs Argentina's peso at par to the dollar. Deposits yesterday edged up to $76.9bn, while central bank foreign exchange reserves stood at $24.5bn. The total reserves of the financial system, including a ""repo"" facility maintained with international commercial banks, stood at $31.5bn. World stocks, Page 52 Copyright Financial Times Limited 1998. All Rights Reserved. "
"___ Document 281 of 400 Argentina working out spending pact Author: Dyer, Geoff; Fidler, Stephen Publication info: Financial Times [London (UK)] 02 July 1997: 03. http://search.proquest.com/docview/248550580?accountid=28034 Abstract: None available. Full text: Argentina is negotiating a ground-breaking economic programme with the International Monetary Fund aimed at improving the quality of government spending. If the three-year programme, a so-called extended fund facility, is negotiated, it would be the first IMF plan to incorporate issues of good government. The method by which targets can be established, if at all, on qualitative issues has yet to be settled. However, the programme should come into effect about the start of next year. IMF programmes usually target measurable economic indicators such as "
"ed Argentine federal tax revenues to record levels in January, offering hope the country may be able to make substantial inroads into its fiscal deficit during 1997. Total tax revenue reached $4.36bn (£2.69bn) in January, 13 per cent higher than a year earlier, and marginally higher than the record monthly revenue of $4.25bn of January 1994. The biggest single"
"n special structural adjustment loan is aimed at boosting confidence in the banking system, developing the local capital markets, and expanding access to credit, especially for small and medium-sized businesses, the World Bank said. A separate $500m special repurchase facility is intended to back the liquidity of the financial system and bolster its defences. Both loans, unveiled on Tuesday night, were precautionary, the Bank said, and part of wider efforts with the International Monetary Fund and Inter-American Development Bank to soften the impact of the market crisis on Argentina. Since the renewed market instability which followed the Russian debt default in July, Argentina has been seeking to assemble a multi- billion-dollar ""war chest"" of financing from the multilateral lenders and other sources, such as domestic financial institutions. It has requested $2.5bn in loans from the IADB, which are awaiting board approval. A $2.8bn IMF extended fund facility, which the government does not intend to draw down, was agreed early this year. The country has also been a pioneer among emerging market borrowers in securing renewed access to the international capital markets, issuing five sovereign bonds in the past four weeks. However, Arge"
"t of GDP this year. Continuing growth is predicated on an orderly end to the global market turmoil and avoidance of world recession. ""There is clearly a global deflationary impact from the south-east Asian devaluations,"" said Domingo Cavallo, the former economy minister. ""But if the developed countries react with appropriate monetary policies, and if emerging economies, including Argentina, continue on the path of economic reform, then a severe crisis can be avoided."" A disorderly end to the crisis is what the Argentines fear most. In particular, an uncontrolled devaluation by Brazil would be a big blow to investor confidence and put ""convertibility"", the peso's one-for-one link with the dollar, under severe pressure. But at least the authorities have had some experience in dealing with such a crisis. During the ""Tequila effect"", after Mexico's December 1994 devaluation, a fifth of all deposits fled the banking system. The economy shrank 4.6 per cent in 1995 as interest rates ratcheted up - but convertibility held. Since the Asian crisis returned last month, total bank deposits have risen; analysts agree the banking system is stronger than in 1995. But after shaking off the after-effects of the ""Tequila"", the last thing Argentine policymakers want is to face another test of fire. ""No wonder everyone is talking up the Brazilian plan's chances of success,"" said one analyst. Ken Warn Copyright Financial Times Limited 1997. All Rights Reserved. "
"The cereal harvest forecast for the 1997-98 season, expected to reach a record 61m tonnes, was another reason for optimism. Mr Guadagni refused to be drawn on the prospects for the trade deficit. Last week Argentina reported a 1997 trade deficit of almost $4.9bn, compared with a surplus of $49m the previous year. Some analysts have questioned whether Argentina can keep its 12-month accumulated deficit below $5bn, as it pledged to the International Monetary Fund in its letter of intent for a three-year $2.8bn extended fund facility, approved by the IMF board last week. Argentina is committed to consult the IMF if it breaches the trade deficit target and to take ""corrective measures"". ""The deficit will depend on the final result of the harvest and the evolution of commodity prices,"" said Mr Guadagni. ""But the country has a commercial deficit because it is in a very strong process of investment and modernisation."" Copyright Financial Times Limited 1998. All Rights Reserved. "
"ging from Chrysler Corp. to Fidelity Investments to Bristol-Myers Squibb Co. are building factories, opening offices and buying businesses to take advantage of Argentina's growth and its partnership with Brazil in the Mercosur common market. It isn't only direct investors. U.S. pension funds, banks and insurance companies have snapped up billions of dollars in Argentine debt in recent months, attracted by high yields and policies approved by the International Monetary Fund. The Argentine stock market hasn't done badly, either. It is up 27% this year, largely on foreign buying. Wayne Lipsky, for one, is now observing events in Argentina cautiously. As chief investment officer of the $75 billion of fixed-income funds run by New York-based Alliance Capital Management, he appreciates the transformation wrought by Mr. Menem and his ministers. But he also wonders how long the center will hold. ""The trickle-down has to be trickling down a little faster,"" Mr. Lipsky says. That is the crux of the problem facing this resource-rich nation of 33 million. Although Argentines got used to the European-style safety net woven together by Gen. Peron and those who followed him, by the 1980s a vast and inefficient state had bankrupted the country. Cloaking himself in Peronist colors, Mr. Menem swept in from the outback province of La Rioja in 1989 to dismantle it. Faced with 5,000% annual inflation and the legacy of decades of underinvestment in infrastructure and productive capacity, Mr. Menem's team chose shock treatment. They pegged the Argentine peso to the U.S. dollar, requiring a greenback in reserve for every note in circulation. They dropped trade and investment restrictions that were meant to nurture local industry but, instead, guaranteed that Argentine products were shoddy and expensive. And they began selling off $30 billion in state assets, from the telephone company to the airline, to attract the capital and technology to update the economy. Their efforts triggered a boom that made Argentina a darling of emergingmarket investors. The combination of the convertibility policy, which quashed inflation, and trade liberalization, which made higher-quality goods available, set off a consumers' carnival. Auto and appliance sales shot through the roof. Between 1991 and 1994, the Argentine economy posted annual growth of more than 7%. The party was cut abruptly short at the end of 1994 when Mexico devalued its peso and investors fled the region. Fearing the same at home, Argentines yanked $8 billion, or 18% of deposits, from local banks. But Mr. Menem and his team held the line, shoring up the financial system and committing anew to the free-market course. Relieved, Argentines overwhelmingly re-elected him president in May 1995. But while Mr. Menem put emphasis on making the market work and on keeping happy the investors on which Argentina depends, he has done little to retool what is left of government to help people make the transition to a competitive world. Schools are starved for funds. The tax system is regressive and riddled with evaders. Corruption siphons off much of the support allocated to the poor. And an overburdened, politicized judiciary has diminished hopes for effective redress. Mr. Menem defends his emphasis on getting market signals right and says he has taken steps to improve the government's ability to collect revenue and deliver services. ""The economy is doing extremely well, and I think most people understand that,"" he says, adding that ""no one has done more"" to crack down on corruption and improve efficiency. Mr. Menem blames ""subversives"" for some of the protests, which in the last few weeks have hit 14 of the 23 provinces. ""I believe that in all countries where these transitions have taken place, there have been these protests,"" Mr. Menem says. ""We have to remember this has been a very great and deep transition that Argentina has gone through."" Enrique Ruete offers a different thesis. The managing director of Grupo Roberts SA, a financial conglomerate just taken over by Britain's HSBC Holdings PLC, he believes the protests have been whipped up by politicking in advance of October parliamentary elections. But he says there is reason to be concerned. ""Unemployment is too high, and the inability of the government to convert its substantial resources into real social solutions is a major problem,"" Mr. Ruete says. At first, analysts say, Argentines focused on the positive"
"inflation, budget deficits and the level of foreign exchange reserves. Mr Pablo Guidotti, Argentine minister of treasury, said that over the period of the programme, Argentina aimed to reduce its debt to multilateral institutions such as the IMF and would only draw funds from the IMF facility if the government's access to the markets was closed. ""The financial aspect is the least important,"" he said. The aim would be to have the IMF help improve the quality of government spending and the budget process, and increase the efficiency of tax administration, he added. However, both the IMF and the World Bank are devoting increasing attention to questions of ""governance"", such as corruption. Economists are also attaching increasing importance to the quality of government as an issue encouraging development. The World Ba"
"e 61-year-old Little Rock, Ark., native. ""Ten years ago, a U.S. ambassador who retired probably didn't know many corporate executives,"" he adds. That's true for countries such as Argentina, which, a decade ago, had state-dominated economies unattractive to foreigners and anti-U.S. policies. Since Mr. Menem took office in 1989, the year Mr. Todman arrived as ambassador, U.S.-Argentine ties have blossomed. The affair between Washington and Buenos Aires, which Argentine Foreign Minister Guido diTella has half-jokingly described as ""carnal relations,"" has been accompanied by an upsurge in U.S. corporate investment here. American investment, attracted by Argentina's high growth rates and conservative economic policies, grew to $8.1 billion last year from $2.8 billion in 1991. While the Argentine economy is more open nowadays, political contacts remain key, particularly in privatizations and in highly regulated sectors such as aviation. ""The private sector views having Todman and Cheek [as representatives] as carrying the implicit backing of the U.S. and of having open access to President Menem,"" says Mr. Cavallo, now a congressman. Exxel Chairman Juan Navarro says Mr. Todman can get in to see Mr. Menem without formalities and ""lends an appropriate American tone"" to Exxel's board. ""He has given us access, know-how and tactical skill,"" says Mr. Navarro, who most recently put Mr. Todman to work winning U.S. government backing for Exxel's bid in the airports privatization. The Exxel group includes Sideco Americana SA and Flughafen Frankfurt Main AG. Meanwhile, Mr. Cheek is lobbying Argentine officials on behalf of New York-based Ogden Corp., which is bidding in partnership with two Argentine companies and Italy's SpA Esercizi Aeroportuali. Mr. Todman, a 71-year-old Virgin Islands native known for his regal bearing and demanding management style, says that although he no longer works for the U.S. government, his work helps promote U.S. interests. ""When I was a diplomat, I played a major role in helping investors and bankers understand what Argentina could become,"" he says. ""In the private sector, I am helping to make sure the changes that have taken place work."" Credit: Staff Reporter of The Wall Street Journal "
" Argentina's own policies than with what's happening in Hong Kong and in neighboring Brazil, whose own quasi-fixed exchange-rate regime has come under fire in recent days. ""Nothing fundamental has changed in Argentina,"" says J.P. Morgan & Co. economist Alfonso Prat-Guy. ""We are in a fragile situation because of what is happening elsewhere."" Yesterday, the Buenos Aires bourse's bellwether Merval stock index at first rose on Wall Street's gains, but then tumbled 3.5% on news that at least three medium-to-large Brazilian banks had posted large proprietary-trading losses in the market turmoil earlier this week and had initiated talks with Brazil's central bank. Mr. Fernandez took pains yesterday to stress that asset prices in Argentina hadn't yet become highly inflated as they had in other emerging markets. Nor, he added, would Argentina be forced to tap international markets to fulfill its financing needs anytime soon, a plus given the enormous run-up in emerging-market risk in recent days. The economy minister said it was still unclear whether the impact of this week's market volatility would have a negative impact on Argentina's growth prospects. Next year's budget document, which provides the forecasts used for the IMF deal, calls for GDP growth of 5.8% in 1998. Credit: Staff Reporter of The Wall Street Journal "
"ll be announced before the end of this month. The loans would be used to tide Argentina over until the end of the first quarter of 1999 should it prove unable to borrow in the debt markets because of continuing financial instability. The funding would be separate from Argentina's existing $2.8bn extended fund facility with the International Monetary Fund, which the government has no plans to draw down. ""This should be a very strong signal to the markets that we are well advanced in meeting our financing requirements and help remove any concerns over our liquidity,"" said Pablo Guidotti, deputy economy minister. Officials stressed Argentina still hoped to meet its financing needs through the markets, and the stand-by funding was intended to be ""complementary"" to commercial borrowing. A government campaign to persuade foreign investors that the country's economic fundamentals remain strong has so far failed to lift the stock market, which has tumbled in step with neighbouring Brazil. However, some relief came yesterday with the Merval leading share index up 1.7 per cent in early trading to 327.6. In Sao P"
"bour few immediate local worries. Most of the negatives weighing on the market lie further afield. With its reliance on foreign capital inflows, Argentina has a nervous eye on US interest rates. Any significant tightening of international liquidity could have an immediate negative impact. Last week the market traded nervously in thin volumes as traders watched Wall Street's rollercoaster ride from the sidelines. Neighbouring Brazil can also send shivers down Argentine spines. Argentina has bitter memories of the ""Tequila effect"", the wave of regional financial instability that followed Mexico's surprise December 1994 devaluation. Now traders have their fingers crossed that Brazil, the destination for 30 per cent of Argentina's exports, will not be forced into a sudden devaluation. Turbulence in south-east Asian markets have added to Argentine anxiety over its giant neighbour. Another possible negative is the $1.3bn or so of new equity offerings planned for the year's final quarter. This represents more than 2 per cent of the $55bn market capitalisation of the Buenos Aires bourse. ""This is a lot to digest and is going to depress prices,"" said Roberto Guevara of Caspian Securities . Argentina's voracious private pension funds, plus mutual funds and open-ended Latin American funds, would "
"er the Asian crisis. The country risk premium, as measured by the spread between Argentina's par bond and US treasuries, had fallen from 821 basis points in the immediate aftermath of the crisis to only 485 basis points now, he said. The fall takes the country risk premium to less than it was a year ago, although still above its pre-crisis level of 361 basis points. Local bank's interest rates for their top Argentine corporate clients had fallen to 10 per cent this month from a peak of 15.7 per cent last November. The banking system had also shown no signs of weakening, Mr Guadagni said, rather the reverse. In the first 100 days since the crisis began, bank deposits had risen 7.5 per cent, or almost $5bn. This contrasted with the first 100 days after the start of the Tequila financial crisis in December 1994, when deposits fell 15.6 per cent, or over $7bn. Big companies' investment plans were also unaffected by the recent international financial turmoil, Mr Guadagni said. "
"olute majority in Congress. The delegation also includes representatives from the Radical-controlled Buenos Aires city government. The trip aims to present the city as a model of efficiency and fiscal responsibility. One task for the Alliance is to convince investors that its embrace of key elements of President Carlos Menem's economic policy - including the currency's one-for-one peg to the dollar - is secure. Regular attacks on the current economic model by Raul Alfonsin, the former president and veteran Radical, point to tensions on economic policy. Ken Copyright Financial Times Limited 1997. All Rights Reserved. "
" sales appear to be flattening largely because the average price of products sold abroad has fallen by 13.8% since the third quarter of 1996. ""Exports are stagnant due to the reduction of commodity prices,"" he says. Nobody can say for sure whether the downturn in commodity prices is a short-term cyclical phenomenon or a long-term secular trend. What matters is how Argentine companies adjust to lower export prices, and some companies are showing impressive agility, which may be why business confidence here remains high. Officials at Acindar SA, the country's largest producer of nonflat steel with around $600 million in sales, say they will recover lost exports to Asia (formerly about 13% of total exports) by focusing more on South American customers. ""We are looking at extraregional markets as opposed to export markets,"" says Arturo Acevedo, Acindar's president. To protect markets from Asian commodity steel producers and to tighten its grip on customers, Acindar plans on customizing its products by bending and shaping steel before it arrives on the job. Acindar is also investing $80 million to upgrade mills. Some of that machinery will no doubt be imported, an example of why Mr. Kiguel, the finance undersecretary, believes Argentina's trade deficit is a sign of health. ""A country that grows fast is likely to import more capital goods from abroad,"" said Mr. Kiguel. Nevertheless, analysts say, Argentina's economy is growing so strongly today that it must opt for corrective measures now or risk instability at the most undesirable time -- during the election year of 1999. ""This economy has a real momentum of its own, and a little tinkering won't do the job,"" says Geoffrey Dennis, Deutsche Morgan Grenfell's global emerging-market equity strategist. ""The recommendation [on the stock market] is to sell into strength"" because Argentina will have to wrench down growth sooner or later, he says. Credit: Staff Reporter of The Wall Street Journal "
"___ Document 89 of 600 Breathing space won but worries remain ARGENTINA $5.7BN DEAL MEETS IMMEDIATE NEEDS FOR FINANCE: Author: Warn, Ken Publication info: Financial Times [London (UK)] 12 Oct 1998: 03. http://search.proquest.com/docview/248740340?accountid=28034 Abstract: Argentina has won a valuable breathing space with the $5.7bn (£3.3bn) financing package unveiled by Roque Fernandez, the economy minister, during last week's meetings of the World Bank and International Monetary Fund. The funds are intended to cover Argentina's financing requirements between now and the first quarter of next year, in the event of the country remaining shut out of the capital markets. But what if the financing drought continues beyond that date? In the current global financial turmoil new bond issues and syndicated bank loans have shuddered to a halt, for Argentina and the rest of Latin America. But Argentina's hunger for foreign capital remains. It faces debt amortisations totalling $11.5bn next year, while the 1999 fiscal deficit was last week forecast at some $2.65bn by Miguel Kiguel, financing undersecretary. Full text: Argentina has won a valuable breathing space with the $5.7bn (£3.3bn) financing package unveiled by Roque Fernandez, the economy minister, during last week's meetings of the World Bank and International Monetary Fund. The funds are intended to cover Argentina's financing requirements between now and the first quarter of next year, in the event of the country remaining shut out of the capital markets. But what if the financing drought continues beyond that date? In the current global financial turmoil new bond issues and syndicated bank loans have shuddered to a halt, for Argentina and the rest of Latin America. But Argentina's hunger for foreign capi"
"ng Argentina's links with Europe and the US. Mr Cavallo said he did not feel his outspoken comments risked undermining investor confidence in Argentina. They reflected a wish to strengthen a democratic system in which economic policy could be applied more efficiently. ""In Argentina, it may be some people have been corrupted by the mafias, but there are many who have not. We have institutions that are working and are able to tackle these problems."" Since breaking with the ruling Peronist party, Mr Cavallo has been lobbying the business community and seeking to forge ties with smaller parties, political independents and Peronist dissidents. But some observers doubt he will be able to create a powerful political alliance. ""Cavallo could well be elected a deputy for Buenos Aires, but I do not see him creating a viable opposition party,"" said Mr Rosendo Fraga, a political analyst. Mr Cavallo did not rule out a run at the presidency in 1999, depending on the outcome of the mid-term race. Copyright Financial Times Limited 1997. All Rights Reserved. "
"___ Document 198 of 500 Argentine Companies Find Less Is More --- Conglomerates Shed Diverse Assets to Focus on Core Units Author: By Jonathan Friedland Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 29 Apr 1997: A18. http://search.proquest.com/docview/398606354?accountid=28034 Abstract: In the past few months, hundreds of millions of dollars of assets have changed hands among Argentina's main business groups and their foreign partners, mostly in modest deals that barely warrant a headline. The flurry of activity reflects the realization that companies can't remain broadly diversified and still compete effectively in an open economy. That's something new. In Argentina, as in many developing countries, companies have traditionally been in wildly diverse lines of business, partly to achieve the size needed to obtain financing and partly to offset the risks of economic ups and downs. The trend was accentuated here in the early 1990s when these companies bought -- in the hope they could later sell them at a big profit -- billions of dollars of assets sold by Argentina's government. On Thursday, for example, Organizacion Techint, the world's largest maker of steel pipes used by the oil industry, took profits on a sizable stake in Telefonica de Argentina SA it had picked up during the government fire sale. Eduardo Baglietto, Techint's executive vice president, says the group will reinvest the $240 million from the sale in its core businesses, which along with steel include energy and energy-related construction. Earlier in the week, the company announced it had upped its stake in local steelmaker Comeci SA. Full text: BUENOS AIRES -- Argentina's conglomerates have started a tango which, like the dance itself, involves small moves that add up to something dramatic. In the past few months, hundreds of millions of dollars of assets have changed hands among Arg"
" boost to revenues resulted from a widening of the VAT tax net and higher taxes on fuels - measures imposed by Mr Roque Fernandez, the economy minister, in July last year, shortly after he took over from Mr Domingo Cavallo, the architect of the country's economic reforms. Matthew Doman, Buenos Aires Copyright Financial Times Limited 1997. All Rights Reserved. "
"and the private sector had to work together to improve infrastructure and the education system. ""Ideas and science and high technology"" must be at the core of future export efforts. Pointing to weaknesses in Argentina's institutions, Mr Sachs said export-led growth also required the rule of law, with low levels of corruption and an independent judiciary. Argentina's privatisation policies had been ""smart and successful,"" and there had been a lot of progress in fiscal policy. ""Fiscal policy is less in crisis here than in many other parts of the world,"" especially western Europe, he said. But two other initiatives were extremely important for rapid growth - labour flexibility and tax reform. But reform efforts had become highly politicised and apparently stalemated, he said. Copyright Financial Times Limited 1997. All Rights Reserved. "
"ished by Banco Tornquist in 1919. ""The monetary circulation increased correlatively, business increased in unlooked for degree and the economic development of the country presented the notable success which has attracted the attention of the whole world."" Argentina did well with its internationalism until, in the 1930s, the light was switched off on free trade and stable money around the world. Along with the rest of Latin America, Argentina went for protectionism. That set the stage for Juan Peron to add populism and labor unions; from there it was downhill both for monetary stability and the standard of living. Per capita income stagnated; inflation increased; periodic half-hearted attempts at stabilization and reform yielded to whole-hearted moves to nationalize production and print more money. Capital fled the country; soon Argentinians paid their taxes like Italians -- hardly at all -- and formed unions like the British -- with a vengeance. In the early 1980s, only some 3,000 people paid income tax and the big question was why so many did. Unions divided their time equally between working and striking. Hyperinflation was the inevitable last stop of this debilitating process. After some half-hearted measures to stop hyperinflation failed, President Carlos Saul Menem and his uncompromising new finance minister, Domingo Cavallo, introduced the Convertibility Law in 1991. At the outset, hard money meant just recognizing the facts: The dollar had become Argentina's de facto money. The law established a firm rule: fixed parity with the dollar, the dollar as legal tender, no issue of local currency except when backed 100% by dollar reserves in the central bank, and no financing of the Treasury by the central bank. Hard money provided the cover for the urgent reforms: privatization, restructuring of the public sector and elimination of pervasive subsidies. Moreover, the monetary regime withstood tough tests during the Mexican peso crisis. True enough, Argentina has high unemployment -- the immediate counterpart of drastic restructuring and liberalization -- but no politician would dare touch the rule; in Argentina everybody understands that tinkering with the monetary rule means going back to hyperinflation. The old answer of public works is fortunately out of date. The remaining strategy involves deepening flexibility and productivity, and adopting a tax structure that "
"___ Document 365 of 500 Southern Wisdom Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 04 Nov 1997: A22. http://search.proquest.com/docview/398633179?accountid=28034 Abstract: Politicians from Asia's devalued and troubled economies, rife with crony capitalism, might like to look at the Argentine experience, where six years ago economic chaos reigned and inflation hit an annualized 5,000%. Today inflation is near zero and 8% growth is expected this year. In the election, anti-corruption opposition platforms handily defeated the powerful ruling Peronist party for control of the congress, but almost no one challenged the model for price stability. In fact, political competition is likely to preserve stability by forcing even deeper reform. Full text: When Argentina's voters went to the polls a week ago Sunday for mid-term congressional elections they sent a message to their country's leadership: They love stability and they hate corruption. The Argentine story is worth acknowledging in light of recent events in Southeast Asia. Politicians from Asia's devalued and troubled economies, rife with crony capitalism, might like to look at the Argentine experience, where six years ago economic chaos reigned and inflation hit an annualized 5,000%. Today inflation is near zero and 8% growth is expected this year. In the election, anti-corruption opposition platforms handil"
"___ Document 59 of 600 Havana Author: Fletcher, Pascal Publication info: Financial Times [London (UK)] 23 Oct 1998: 07. http://search.proquest.com/docview/248608557?accountid=28034 Abstract: Argentina, Cuba's second biggest bilateral creditor, has presented a wide-ranging proposal to the Cuban authorities that combines suggested repayment mechanisms for $1.68bn of Cuban debt with initiatives to boost trade and investment ties. The package was presented yesterday to Francisco Soberon, Cuban central bank president, by an Argentine delegation led by Jorge Campbell, secretary of state for international economic relations. Argentina, whose President Carlos Menem has called for democratic change in communist-ruled Cuba, has recently lagged behind other Latin American countries such as Mexico and Venezuela in its trade ties with Havana. Argentine-Cuban trade in 1997 totalled $132m, most of it Argentine exports. Full text: Argentina, Cuba's second biggest bilateral creditor, has presented a wide-ranging proposal to the Cuban authorities that combines suggested repaym"