What is MacroWeb?

By Lucia Olivera, an Argentine Citizen

INTRODUCTION

Anyone who is aware of Argentina’s plentiful natural resources will wonder: “Why is Argentina in a constant struggle for economic stability?” In this paper, I will attempt to answer this question while presenting a brief and objective view of the Argentine economy. My objectivity, however, is somewhat compromised by the fact that I am a citizen of Argentina, and have strong feelings about my country’s history.

My grandparents used to tell me that, in the early part of the 20th century, Argentina’s economy was outperforming that of countries such as Canada and Italy. They said that powerful countries once thought of Argentina as a source of serious competition, because of its well-educated population, its abundant natural resources, and its freedom from racial and religious conflicts. As I grew up, bearing witness to hyperinflation, political instability, and increasing poverty, I always believed my grandparent’s story was a fairytale.

Perhaps the origins of the Argentine economic struggle can be traced as far back as the colonial period. The method and aims of the colonization process in Argentina were very different from those in the United States. The Spanish designed colonies to exploit natural resources, with little interest in local accumulation of wealth or in developing the land they occupied. The Spanish crown was the only owner of the land. They had little interest in building a lasting set of institutions in their Latin American colonies, because the Crown was only interested in extracting as much wealth from the land as they could (and, of course, in “saving” the population by converting them into Catholicism). The British, on the other hand, designed their colonies to settle the land, giving the settlers an opportunity to own and cultivate a parcel of land.

Beginning with Argentina’s Independence era—from 1810 to 1830—the Argentines, generally, have developed distrust and dislike for foreigners. These feelings towards outsiders started because most of the land that was not owned by the government was given to wealthy European families in exchange for political or economic favors.

Mariano Moreno, a well-respected Argentine politician, wrote in 1810:

"The foreigner does not come to our country to work for our well-being, but to take as much advantage from us as he can. Let's give him a warm welcome, learn from the improvements of his civilization, accept the works of his industry, and offer him the fruits that nature so generously gives us; but let's take his advice carefully...." (Moreno, Mariano. Gazeta de Buenos-Ayres, September 1810.)

Moreno's wise words are not taken very seriously today, when the philosophy seems to be "let's try to fool the foreigners into giving us all they will, and ignore their advice."

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