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Arabica Robusta

Argentina and the magic soybean: the commodity export boom that wasn't | Mark Weisbrot ... - 1 views

www.guardian.co.uk/...tina-magic-soybean-export-boom

food security international development agriculture crisis agribusiness foodsecurity commodity

shared by Arabica Robusta on 02 Jun 12 - No Cached
  • One of the great myths about the Argentine economy that is repeated nearly every day is that the rapid growth of the Argentine economy during the past decade has been a "commodity export boom". For example, the New York Times reported last week:
  • I haven't seen any economists make the claim that Argentina's remarkable economic growth over the past nine years – which has brought record levels of employment and a two-thirds reduction in poverty – has been driven by soybeans or a commodities export boom. Maybe that is because it is not true.
  • It turns out that only 12% of Argentina's real GDP growth during this period was due to any kind of exports at all. And just a fraction of this 12% was due to commodity exports, including soybeans. So Argentina's economic growth from 2002-2010 was not an export-led growth experience, by any stretch of the imagination, still less, a "commodities boom".
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  • there is no plausible story that anyone can tell from the data to support the idea that Argentina's growth over the past nine years was driven by a "commodities boom." Why does this matter? Well, as economist Paul Krugman noted yesterday, "articles about Argentina are almost always very negative in tone ― they are irresponsible, they are renationalizing some industries, they talk populist, so they must be going very badly." Which, he points out, "doesn't speak well for the state of economics reporting." It sure doesn't.
  • The myth of the "commodities export boom" is one way that Argentina's detractors dismiss Argentina's economic growth as just dumb luck. But the reality is that the economic expansion has been < a href="http://www.cepr.net/index.php/publications/reports/the-argentine-success-story-and-its-implications">led by domestic consumption and investment. And it happened because the Argentine government changed its most important macroeconomic choices: on fiscal, monetary, and exchange rate policies. That is what took Argentina out of its 1998-2002 depression and turned it into the fastest-growing economy in the Americas.
  • By defaulting on its debt and devaluing its currency, Argentina was freed to change its most important macroeconomic policies.
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