Essay on Argentinas Economic Disaster The Government is...

Argentinas Economic Disaster: The Government is to Blame Argentina is a country with rich natural resources and abundant educated and energetic labor. Yet it fails to pull itself out of a recession that has lasted for too many years, according to its citizens. Many blame the International Money Fund (IMF), foreign influence, or political corruption for their monetary woes. However, others believe that the Argentinean government is to blame for the high unemployment rates and increased poverty. They believe that the government has spent more money than it has received; thereby, increasing the government deficit to unfixable levels, which has ultimately led to the downfall of the economy as a whole. These people are only partially†¦show more content†¦Argentina became a self-sufficient country that lacked competition from foreign markets. However, due to the lack of enthusiasm and lack of profits, the economy soon returned to its downward spiral towards recession. As more debt poured into the country, more investors moved out. The r ate of growth plummeted and the inflation rate skyrocketed to over 3,000 percent by 1989. As a rebuttal against such economic horrors, the Argentinean government turned the state owned manufacturing factories into private owned. The goal was to end the monopolies and create competition; thereby, improving quality but lowering prices. In addition to the factory switches, the Argentinean government also deflated the peso by placing it at a one to one ratio with the American dollar. The money supply could only change if the money supply of the United States changed. Although these solutions seemed feasible at the moment, Argentina soon found out that they had made huge mistakes. When the Argentinean government privatized the companies, they thought that revenue and profits would occur quickly and naturally. But in reality, the state owned monopolies became private owned monopolies. Not only were they still monopolies, but also they were foreign owned. Therefore, any money gained did no t end up back into the country, but rather to foreign countries. Also by fixing the peso to the dollar, the Argentinean government believed that they wouldShow MoreRelatedWas the Falklands War a Success or a Failure for Thatchers Administration?4841 Words   |  20 Pagesthe - Thatcher government? - On 2 April 1982, the British political system was rocked by news of an extraordinary event eight thousand miles away in the South Atlantic. A long-standing and thorny dispute with Argentina over sovereignty of the Falkland Islands – a tiny relic of empire proximate to the South American mainland – had erupted with a sudden and unprovoked invasion of British territory by Argentine forces. Britain’s Conservative government faced the greatest crisis inRead MoreInternational Management67196 Words   |  269 PagesThe global financial crisis and economic recession have challenged some assumptions about globalization and economic integration, but they have also underscored the interconnected nature of global economies. Most countries and regions around the world are inextricably linked, yet profound differences in institutional and cultural environments persist. The challenges for international management reflect this dynamism and the increasing unpredictability of gl obal economic and political events. Continued