Argentina, on the other hand, has a wide range of natural resources that the country benefits from. In 1976, the economy was affected by the depraved governance of a military dictatorship, which led to an increase in corruption and in anti-labor policies due to financial liberation increasing the country’s debt by reducing capital for investment. While Argentina is a rich country, since 1974 their economy has recorded steady economic growth meaning that there’s very little to no progress being made in their economy. In Soto and Zurita’s research they blame fiscal irresponsibility on Argentina’s slow economic progress. The evolution of Argentina’s real GDP per-capita has been at around 1.1% growth per year between 1950 and 1974. After 1974 there
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Rise in imports led to fall in exports and their rates increased. The competitiveness of the exports dropped due to decrease in their demand as they were expensive compared to the imports, which had been made cheap through fixation of the rates. While these had been positive to the economy of Argentina the capital flow had been affected negatively. Most investments were financed through foreign financing or international cash flows. As the fall of exports and increase in imports increased there was a large deficit in the country current accounts. Due to increase in currency valuation the demand for imports fell by 1998 where the country’s economy experienced a major drop in the gross domestic production. These severe changes in the country’s economy led to a drastic fall in cash flow as fears increased among international investors due to uncertainty created by the unpredictability of the …show more content…
While Chile tested different strategies to improve their economic status Argentina struggled to make the correct decisions. Chile is rich in minerals like cooper, Argentina on the other hand is rich in agricultural produce especially soya. When Chile enjoyed good economic growth some of its revenue was put aside and used as a safety net while Argentina spent their money extravagantly. Chile for so many years allowed the exchange rates to be flexible, which allowed the currency to rise while Argentina controlled exchange rates and controlled monetary value through government
Rise in imports led to fall in exports and their rates increased. The competitiveness of the exports dropped due to decrease in their demand as they were expensive compared to the imports, which had been made cheap through fixation of the rates. While these had been positive to the economy of Argentina the capital flow had been affected negatively. Most investments were financed through foreign financing or international cash flows. As the fall of exports and increase in imports increased there was a large deficit in the country current accounts. Due to increase in currency valuation the demand for imports fell by 1998 where the country’s economy experienced a major drop in the gross domestic production. These severe changes in the country’s economy led to a drastic fall in cash flow as fears increased among international investors due to uncertainty created by the unpredictability of the …show more content…
While Chile tested different strategies to improve their economic status Argentina struggled to make the correct decisions. Chile is rich in minerals like cooper, Argentina on the other hand is rich in agricultural produce especially soya. When Chile enjoyed good economic growth some of its revenue was put aside and used as a safety net while Argentina spent their money extravagantly. Chile for so many years allowed the exchange rates to be flexible, which allowed the currency to rise while Argentina controlled exchange rates and controlled monetary value through government