Argentina - The Collapse of the Currency Board & Beyond
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Case Code: ECOA112 Case Length: 15 Pages Period: 2003 Pub Date: 2003 Teaching Note: Not Available |
Price: Rs.300 Organization : - Industry : - Countries : Argentina, Latin America Themes: - |
Abstract Case Intro 1 Excerpts
Excerpts
Background Note
Early History
The modern state of Argentina began to evolve around the 1860s, when after decades of civil war, basic institutions and infrastructure were developed. Soon, European immigrants began to enter the country in large numbers. The country continued to prosper in the early part of the 20th century, thanks to the exports of agricultural products especially to Europe...
Economic Policies
Argentina's recovery in the 1990s had been driven by its currency board system of exchange rate management. Indeed, it had become a much talked about model among many developing countries. The currency board called for strong monetary discipline and linked domestic money supply to dollar reserves. In early 1999, when the Brazilian real crashed and earlier in 1994-95 when the Mexican Peso plummeted, the Argentine Peso held its own at a peg of one peso to the dollar...
The Industry
The industrial sector employed approximately 23.1% of Argentina's workforce in 2000. Industrial development was heavily concentrated in the province of Buenos Aires-as well as in Santa Fe and Cordoba...
Foreign Investments
Attracting foreign direct investment had been a key element of Argentina's economic growth strategy. Foreign investors operated in major economic sectors. They had been attracted to Argentina in the past decade because of its good institutions and strong fundamentals..
Foreign Trade
During much of its modern history, Argentina had exported low-value-added products. During the 1940s and 1950s, Argentina imposed tariff and non-tariff barriers to facilitate import substitution. From the 1960s through the 1980s, policy fluctuated between more open and less open trade...
Human Resources
The Argentine education system had a lot of scope for improvement, even though enrollment had soared, thanks to free public education. Educational infrastructure was poor and lecturers often did not turn up as they did many other part time jobs...
Future Outlook
In the 2003 elections, Nestor Kirchner defeated Carlos Menem to become the country's new president. Kirchner faced the challenge of restoring the country's credit rating, maintaining fiscal discipline and reducing poverty. But Kirchner seemed to be taking charge during favourable circumstances...
Exhibits
Exhibit I: Argentina: Economic Data
Exhibit II: Argentina at a Glance
Exhibit III: Argentina: Macro Economic Indicators, 2002
Exhibit IV: Argentina: Inflation by Decade
Exhibit V: Comparative Analysis: Macro Economic Indicators, 2001
Exhibit VI: Argentina: Economic Indicators Real Sectors
Exhibit VII: Argentina: Economic Indicators, External Sector
Exhibit VIII: Argentina: Profile of International Trade, 2002
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