Argentina, a top South American tourist destination, has achieved four out of seven possible points in the Travel and Tourism Competitiveness report for 2021. The country ranks third in the region in natural and cultural resources and provides protection for 28.6% of its population. In 2021, the travel and tourism sector contributed nearly 34 billion U.S. dollars to Argentina’s GDP, a 39% increase from the previous year.
Argentina is a developing country with a highly literate population, an export-oriented agricultural sector, and a strong natural tourism ranking. However, it only ranks 50th in tourism competitiveness globally, according to the 2019 report. The report highlights the importance of travel and tourism to Argentina in granular detail across various metrics.
In 2019, Argentina’s contribution to GDP was 9.8, but the COVID-19 pandemic caused international tourism to drop to over 90% in 2021 compared to 2019. The travel and tourism market in Argentina is projected to grow by 8.19 (2024-2029) resulting in a market volume of US$13.18bn in 2029. The direct contribution of travel and tourism to GDP is expected to grow by 3.6 pa to ARS3,861.3bn (3.8 of GDP) from 2023 to 2033.
In 2021, Argentina generated around 445.00 million US dollars in the tourism sector alone, accounting for 0.069 percent of its gross domestic product. Domestic and international visitor spending in Argentina directly contributed US$15.5 billion to Argentine GDP and supported a US$41.5 billion total impact. According to the World Economic Forum’s 2017 Travel and Tourism Competitiveness Report, tourism generated over US$22 billion, or 3.9 of GDP, and the industry supports a further US $4.2 billion of the country’s GDP, totaling to US $12 billion.
📹 Argentina loses tourist boom as inflation soars 288% | World Business Watch | WION
Argentina’s booming tourism industry, fueled by an attractive exchange rate for foreign visitors, appears to be fading. This comes …
Is tourism important in Argentina?
Argentina, the world’s 8th largest country, is home to a diverse geography and a significant tourism industry. The travel and tourism market contributed 46. 4 billion USD to the country’s GDP in 2021, increasing from 46. 4 billion USD in 2020 to 33. 7 billion USD in 2021. Despite low tourism numbers, the top tourists from different regions visiting Argentina in 2021 were from Brazil, Argentina, Chile, Bolivia, Paraguay, Brazil, Uruguay, and the Atlantic Ocean.
What percentage of Spain’s GDP is tourism?
Spain’s economy’s current buoyancy is attributed to the strength of its tourism sector, which has experienced strong growth in the first four months of 2024, exceeding records from 2023. Tourism GDP accounted for 0. 9 pps of Spain’s annual GDP growth of 2. 5 in 2023, and new forecasts for 2024 predict it will contribute around 0. 6 pps to the expected growth rate of 2. 4, accounting for 13. 0 of total GDP. International tourism has seen its best start in history, while domestic tourism is showing signs of moderation.
What percentage of the economy is tourism?
The US travel and tourism industry is a significant contributor to the economy, with international visitors spending $233. 5 billion in 2019 and contributing nearly $640 million a day. The industry generates $1. 9 trillion in economic output, supports 9. 5 million American jobs, and accounts for 2. 9 of the US GDP. The International Trade Administration supports the industry through its National Travel and Tourism Office (NTTO) and the U. S. Commercial Service, providing data and related products to support international outreach and promotion efforts.
With over 100 offices in the US and 75 countries worldwide, the NTTO promotes US policies that encourage competitiveness, provides business counseling, match-making, and promotional support services, ensures that regulations do not adversely impact industry competitiveness, and provides information, trade data, and market analysis to the industry, partners, and policy makers. Maintaining close relationships with the industry helps enhance its competitiveness and overseas profile.
Is Argentina in the 3rd world?
Argentina would be classified as a third-world country, given its alignment with the United States, its position as a second-world country in relation to the Soviet Union, and its neutral stance among third-world countries.
What is the main source of economy in Argentina?
Argentina’s main source of income is its service sector, accounting for over half of its GDP. This includes retail, tourism, and financial services. As Latin America’s third-largest economy, it has a GDP of over USD 600 billion and is a member of the Mercosur trade pact. Argentina’s economy is bolstered by its strong agricultural sector, which is one of the world’s largest producers of soybeans, corn, and wheat. The fertile Pampas region is crucial for crop production and cattle ranching, despite recent drought.
What is Argentina’s greatest resource?
Argentina’s primary energy mix is primarily composed of natural gas (55%) and oil (33%), with bioenergy contributing 5%, hydropower contributing 3%, and nuclear energy contributing 3%.
What is Argentina’s biggest industry?
Argentina is a major exporter of soybeans, wheat, meat, wool, and wine, with most of its wine consumed domestically. The country’s economy is heavily reliant on services and manufacturing, with agribusiness and ranching dominating the economy for much of the 19th and 20th centuries. Argentina produces more grain than any other Latin American country, second only to Brazil in cattle raising. Its gross national product (GNP), GNP per capita, and value added from manufacturing are among the highest in the region.
Argentina’s agriculture began in the 1960s after the founding of the farming colony at Esperanza in 1856. The spread of wheat, corn (maize), and flax cultivation followed the estancia region of the Pampas. The growth trend continued into the 20th century as Argentina became one of the most prosperous countries in Latin America. Meat and grain were exported to expanding markets in Europe in exchange for fuel and manufactured products.
However, the Great Depression of the 1930s significantly damaged Argentina’s economy by reducing foreign trade. Between 1930 and 1980, Argentina fell from being one of the wealthiest countries in the world to ranking with the less-developed nations. In response, successive governments pursued a strategy of import substitution to transform Argentina into a self-sufficient country in industry and agriculture.
This was achieved by imposing high tariffs on imports and sheltering Argentine textile, leather, and home-appliance manufacturers from foreign competition. However, this encouraged industrial growth diverted investment from agriculture, leading to a dramatic decrease in agricultural production.
What is Argentina’s main resource?
Argentina’s primary energy mix is composed primarily of natural gas and oil, with bioenergy accounting for approximately five percent and hydropower and nuclear energy contributing approximately three percent each. Argentina is home to the second-largest shale gas reserve and the fourth-largest shale oil reserve in the world.
How much does tourism contribute to Argentina’s GDP?
In 2021, the travel and tourism sector in Argentina contributed approximately 34 billion U. S. dollars to the country’s gross domestic product (GDP), representing a 39% increase from the previous year. However, due to the travel restrictions imposed in 2020, the main international airports in Argentina registered only 630 thousand international inbound passengers, according to data from Oxford Economics, the United Nations World Tourism Organization (UNWTO), and national sources.
Which country has the highest GDP from tourism?
In 2023, the United States surpassed pre-pandemic levels in terms of travel and tourism contribution to GDP, with a total of 2. 36 trillion U. S. dollars. China and Germany followed closely, with travel and tourism contributing around 1. 3 trillion and 488 billion U. S. dollars, respectively. The total contribution of travel and tourism to global GDP reached just under 10 trillion U. S. dollars in 2023. GDP, the total value of goods and services produced in a country in a year, is a crucial indicator of a country’s economic strength.
What is the economic makeup of Argentina?
From 2012 to 2022, the Argentinean gross domestic product was primarily driven by the agricultural sector, which accounted for 6. 44 percent of the total, followed by the industrial sector, which contributed 24 percent. The remaining 16 percent was attributed to the service sector, which accounted for 53 percent of the total. The remaining 0. 5 percent. The source does not provide information on percentage points not exceeding 100. Access to all statistical data is available for a fee of $1, 788 USD per year.
📹 What experts think of ‘anarcho-capitalist’ Milei’s plan to dollarize the Argentinian economy?
Replacing the Peso with US dollars and getting rid of the central bank, that’s what Javier Milei, Argentina’s recently elected …
Even though other countries have dollarized this will be one of the most exciting economic experiments in history. Argentina is very different from the other dollarized countries. It is one of the largest exporters in South America. Around half of Argentina’s exports are crops and one third manufactured goods. Most of the manufactured goods are sold to neighboring countries. Really looking forward to see how it changes Argentina and their neighbors.
In both Ecuador and El Salvador, which dollarized in 2000 and 2001 respectively, dollarization involved parallel processes. In both countries, the most straightforward process was the dollarization of all existing deposits, which can be converted into dollars at the determined exchange rate instantly.
I remember studying Anarchist ideologies, such as Anarcho-Capitalism, when I was a teenager. Not only is Milei Argentina’s first Anarcho-Capitalist president, but probably world’s first self-declared Anarcho-Capitalist head of state and government. Now, Milei talks a big game, but there is a boundary between fantasy and reality, his ideas may be worthwhile, but enacting his policies will be an uphill battle.
It appears that Goldman Sachs was not closely involved when Ecuador adopted the US dollar as its currency. At that time, Ecuador was among the nations with the poorest fiscal responsibility. However, it was the implementation of dollarization that effectively curbed the previously irresponsible fiscal behavior in our country.
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Argentina has an interest rate of 133% which is crazy (though understandable with inflation at 150%). It must make borrowing money next to impossible if the loan value more than doubles every year. I think the Latin American countries should try to create a currency similar to the Euro. It would give them a say over monetary policy and unlike with dollarisation, they wouldn’t be relying on the USA Central Bank to make decisions in their interest. But it would be backed by the entire economy of Latin America. Best of luck to Argentinians.
The experiment already happened. In 1889, Puerto Rico suffered a 40% currency devaluation, crippling the Puerto Rican economy. This was caused by the United States setting up the American Colonial Bank and declaring the U.S. dollar as legal tender (the official money) of Puerto Rico, changing it from the peso. However, in 1899, one peso was only worth 60 cents, meaning the local businesses of Puerto Rico and its citizens lost 40% of their net worths overnight from causes totally outside of their control. This resulted in Puerto Ricans, attempting to save their net worths, borrowing money from the American Colonial Bank. However, high interest rates made it very unlikely that locals were going to be able to pay back their loans, causing many Puerto Ricans to default on their debt. The result was that the bank seized their assets (in these days, typically their land).
You got several things wrong. He dont want to move to the dollar to lower the inflation, he wants to move to the dollar and abolish the central bank so in that way other governments cant use the central bank to get the country into debts and with that force the country always have a balanced book. You can see that because he first wants to lower the inflation to single digits by very harsh austerity and then he wants to move to the dollar and close the central bank. So again he dont want it to lower inflation. Other thing this is not the worst crisis, the 2001 was worse and that was provoked by a period that is almost identical of what Millei wants, the Menem period was when the peso was pegged to the dollar in a 1 to 1 ratio and it destroyed the Argentinian industry and it had crazy high unemployment numbers and very high poor %.
As an Ecuadoran who experienced the dollarization process first hand, I can tell you that nothing is as painful as being constantly swindled by the state. The dollar was already a safeguard to prevent the vaporisation of our meagre economies. When it was declared that we will no longer be paid in sucres, it was a major relief in spite of the tremendous devaluation that the government announced with the dolarization decree. It took a couple of years until nobody complained. If there is something that our people are not willing to relinquish that is the value of our incomes and the introduction of a “Venezuelan or Argentinian” experiments. We’ve got thousands and thousands of Venezuelans in our streets to remind us the price and doom of socialism.
It’s doesn’t sound so crazy when you consider that argentine economy is deeply influenced by the dollar, salaries may not, but prices of goods are mostly set on USD, even more if you are a business. Cars, real state, rent, are all set on dollar, even if you sign the contract in pesos, the price is set on USD, so we are not that far off really.
I had no idea of the facts Taking the ridiculous inflation numbers into account, his idea of dollarization into USD and closing down of central bank makes quite a bit of sense really Essentially this is pressing the red panic button to stop everything at once and kind of start over for a while, it takes away the country’s economic autonomy but can potentially greatly stabilise its economy This is a very radical and last resort solution to an economic turbulence that is completely and utterly out of control and i certainly dont think it would be justified outside of this context because its that radical Mr Milei is gonna be a very busy man for the next few years if he manages to press the hard reset button
i guess most haven’t seen all the declarations of milei. everytime he’s asked what would the common citizen do, he says “he doesn’t know”. He even declared he doesn’t look at the micro-economy of the household, he just cares about the big numbers and aggregates. This week, in a couple of days, he removed the tax exemption to the basic consumption items. The arg/usd rate climbed around 50% (in a couple of days). And he announced the return of tax for income (affecting everyone). So he capped acquisition power of the average citizen by around half, in a couple of days. I don’t think he’ll be able to end his term. He must have the presidential helicopter on hold.
Considering El salvador in Central America went to “dollarization” in 2001. The country does not print its own money. While short term, Salvadorians felt a depreciation of assets, you have to be optimistic in the long term. El Salvador use the dollar as national currency. And while previous to 2001, the dollar to colones rate was 1:8.50.
Poorer countries seek dollarisation as a means of rescuing their economies, as such, they lose their sovereignty to the US. Richer countries began a dedollarisation process, such as some of BRICS countries as well as Saudi Arabia and UAE who had agreement with China to use Chinese Yuan in the trade between each other.
If the US was interested in helping Argentina, they would have done so already instead of letting it languish and suffer in agony. When the Argentinian economy switches to the dollar, you can bet that Argentina won’t fare any better because the FED will start printing money and adding to the M2 money supply. This means that whatever capital Argentina had will be absorbed and drained via more dollars being printed. Good luck Argentina, but BTC > USD anyday.
Why do journalists simply assume voting for a right wing capitalist is a protest? Can’t voters identify and agree with a capitalist right wing? Never heard anyone qualify a left or center-left winner as protest votes, why is that? I dont understand how can you qualify dollarization as risky policy? Where in the world did a country change to common currency went wrong? All I see is success in countries that changed currency to a common/stable one: Look at all the countries in Europe which have Euro, and the ones which didn’t. Which is better/worse? Ecuador, Panamá have dollar. Are they better or worse since the change? Why is a policy that has been done many times and has many success in those cases considered risky? What is the risk? Stopping inflation? Preventing corrupt politicians from printing money? I don’t understand the negative tone they have against a very good solution.
I wish the US Dollar was as solid as we would like to think. Biden/Trump/Bush/0bama all spent and printed money at frightening rates. By using the Dollar, Argentina now has zero control over the inflation or devaluation of their currency. Ecuador Dollarized back in 1999. It has been good because it stopped the constant devaluation of their national currency, and gave the people solid currency which motivates saving instead of spending.
Phd Economist Michael Hudson explained everything in detail in the quote below: Every hyperinflation in history, such as we’re seeing in Argentina now, whose prices have gone up 140% in the last year, every hyperinflation has come from the currency depreciation, from the balance-of-payments deficit. And Germany, now that it is deindustrializing, now that it cannot import, if affordable, gas and oil to run its industry, all of a sudden this anchor of the euro’s exchange rate has turned into a deficit, meaning the euro is looking like it’s on the downside. The reality back in the 1920s is Germany had to pay reparations. The payment of reparations caused the currency to plunge. When a currency goes down, as Germany’s did and Argentina’s today, the price of imports go up. And the price of imports go up, increase the domestic price of food, the domestic price of doing business. And so the government then has to create more money to enable these transactions of the economy to take place at the higher price level. In every case, the hyperinflation and even regular inflations are led by the balance-of-payments deficit, followed by a declining exchange rate, followed by increasing import prices and domestic prices, and then at the very end, money creation increases, just the opposite of what Milton Friedman and the Chicago School and the right-wingers say. When you have a false view of what causes inflation for the last 100 years, ever since the 1920s, it’s not a mistake. It’s because there’s a social interest in having a wrong view.
Because the previous government did such a good job. As for the ‘economist’ stating that the Peso will be valued lower next to the USD, obviously, I guess they’re just handing out degrees over there on economics. But with the USD comes many benefits that, true, the citizens will not feel straight away, but will notice and hey, when you’re at the bottom there is only one direction.
I know nothing about Argentina but I was in Russia during the early 1990’s when the authorities believed that economic “shock therapy” was needed to transition to a free market economy. The problem was it was more shock than therapy and many Russians lost their entire life’s savings. That created a politics of resentment that gave us the Putin of today. I am skeptical that economic models stemming from very different cultures will work any better in Argentina. But one thing is certain. The ideas of Libertarianism will now be given something they have sorely lacked: a test of their validity in real world circumstances. I’ll be perusal the results with interest.
So for Argentina to buy USD they could not use Peso anymore as this currency no longer hold value. The only bargain would be only in gold. It’s also depends if USA willing to trade their USA with gold as printing more money would shoots up inflation domestically. Unless USA issue a separate US currency for Argentina use only.
Argentina has such a low national income that it can only afford a small share of the world’s gold supply. That should give you a good picture of what is going on. The US would have to finance what the country needs in gold reserves to be an active partner in trade. Industries will work their people to death so the nation’s output can exceed what the nation owes.
Mate! don’t go down that path. I would urge a business/political learning trip to Zimbabwe! Argentina don’t change the Peso for the dollar. It only makes the USA stronger and you become it’s puppet and you won’t have that money you think you will have! It looks good on paper from an Academia perspective. Zimbabwe hired the “best” from Harvard and it didn’t work!! Dont abolish the Peso!!
They would be better off pegging it to a silver standard. A valuable metal of which Argentina is a significant producer. Creating a new silver peso equal to roughly USD5 (say 500 to 1 devaluation) containing about USD1 of sterling silver should do the job. The coin would be extremely popular around the world but most importantly put Argentina’s fate in its own hands rather than the US Treasury.
them using the dollar should revalue the dollar a bit as long as we dont print anymore. cause the current amount in circulation would be split between a lot more people. But then they wouldnt be able to just exchange their currency, companies or government would have to sell to america or american companies to get dollars to then start paying employees in dollars while the people spend the last of their pesos or exchange with their government. Yeah it would probably take a year.
The problem with dolarisation is that you will be still dependent on emission of money that FED is doing from thin air – diluting purchase power. So basically FED (USA) will be benefiting from that as they are “printing” this money. What you should do is to have your currency pegged to the same value in gold/silver or high value products. Or just not printing the money except maybe for some specific reasons as investment into critical public infrastructure. People are actually not benefiting from today’s better efficiency of the economy because of being stolen by the State in the form of money “printing” as part of belief in Keynesian economic theory…
Hello from argentina. When you say “risky politics” you sure can’t seriously imply that doing the same politics for decades which destroyed the country from being as wealthy as an average european country to being compared with Zimbabwe or Sudan. Please keep your opinions aside from the information itself
Closing the central bank is a dump idea; having the US dollar is worst than having gold as a currency; unlike the US; Argentia can not print US dollar, but gets the devaluation of the US dollar, Gold doesn’t devalue. Closing the central bank also lock up a country ‘s ability to help its citizen when in need; promote program when needed to help its economy.
Well not the central bank is the problem, the problem is the people who work there. A central bank must be independent from the government but like in most contries it isn’t. Guido Agostinelli is not only a professor of political economy he also is the head of an gourmet food import business called Geson SA. He profits from high inflation the most. He is part of the problem and should not be giving any talks about that topic.
Coupling the Argentinean fiat peso to the US fiat dollar just in time to have it dragged down when the world dumps the US dollar. A better solution would be to design a new type of currency that can’t be counterfeited or controlled by a central authority. A blockchain general ledger eCurrency for example would be a good choice.
Argentina already spent a decade with a dollarized economy. The result was the destruction of national industrial base and the confiscation of bank deposits to avert the collapse of most of the financial sector. The problem is not the peso, the problem is what ends up happening to the dollars that should be coming into the country as a result of trade. Milei is a conman who will end up executing the same plan Macri’s team intended to execute, but faster and with far more pain for working Argentines. The same class as before will continue in power, the middle class will all but disappear, the rich will become richer. It will not end well.
9:03. How would dollarizing the Argentinian economy give Argentina the inflation rate of the United States? That doesn’t make any sense. You might be using the currency of the United States, but the way prices fluctuate in one country is totally different to another country. For Argentina to have the same currency AND inflation rate as in the USA, Argentina would need to become another State in the United States. Even then that may not be enough to give Argentina the same inflation rate of the USA, as there are way too many variables behind inflation (climate-reated ones, for example), and Argentina is also far from the United States geographically as well, which would impact supply chains.
It’s interesting that he blames the public central bank for the inflation when there are four other ways to inflate a currency. These being counterfeiting, shorting, manipulating supply of essential items, and price setting. But dollarizing the economy will protected against the counterfeiters and international shorter, but won’t have a significant effect on supply manipulation and price setting.
If you’re going to dollarize the economy, you don’t ALSO need to abolish the institution of the central bank…. that is, if YOUR ARGUMENT from the outset was a serious one, which was that it’s the PRINTING OF PAPER money (too much of it, so each one is worth nothing) that got the hyper inflation problems that Argentina has been facing for years going in the first place. But with the DOLLAR as the national currency, it is NOT paper money printing that the Central Bank could be or would be doing/responsible for (can’t do that with the US dollar anyway, since that’d be counterfeiting activities and the US wouldn’t kindly take it). It, as a central institution, would just be a federal repository of the Dollar… so that in international trade, finance, and commercial undertaking — such as import and export trades —- the Argentina Central Bank officials would be the officials to talk with other central bankers & financiers from other nations… to get trade, finances, and commerce going…
Argentina is between a rock and a hard place. If the reforms will succeed a significant number of Argentinians will pay an high price but with prospective for better days in the future. If the reforms will fail the situation would be even more difficult than now and the nation could turn in a dangerous and unpredictable state of chaos. Good luck argentinians.
Leé el DNU, no importa tu signo político. Dentro de los 366 ítems hay cosas que no aplican a necesidad y urgencia, que deberían haber ido al congreso y conversarse con especialistas de cada tema y los representantes votados en democracia. Hay cosas que van en contra los intereses nacional y publico como la derogación de la ley de tierra y de fuego. Hay cosas con tintes autoritarios y esclavistas. Un DNU no debe ser en esencia un cambio estructural tan abarcativo. Debe tratar un tema puntual que requiere acción inmediata. Este DNU no puede ser aprobado como tal. Pidamos al congreso que trabaje en representación de los intereses del país ya que el ejecutivo está tratando de legislar de facto para los intereses de 4 empresas.
So he’s way handling things is to adapt another nations currency and piggy back ride on that country’s success, for its own benefit. You all know this can backfire for everyone, right? Both Argentina and The US can have a negative response to this adaption with the currency. Hundreds of millions of Americans can suffer greatly if Argentina fails with its plans to dolorize its economy, I’m hopes of fixing it. It’s like a bank loan The US is the bank, it loans money to Argentina and not only money but The US also loans its “Credit” fot Argentina to use. Argentina fails to make the payments of performans very low, the US won’t get its money back and its credit will plummet. I dont think so Argentina 🤚🏻😐
But isnt it what the EU did with their countries setting up a german Euro? Spain, Greece, Portugal are submitted to the Euro and have no real central bank anymore, their central bank is in Frankfurt and led by european technocrats (mostly Germans, French, Dutch and Belgian). And still it works. I wish the best of luck to Milei, Argentina has been in a hole since Peron, how many presidents have passed without anything good to happen?
Another Colony for the US Dollar, same politics as usual, Neoliberalism… Not having a Central Bank basically turns the country into a US State. they have to sell Assets, do a fiscal arragment and this was already done several times, the issue with Dolarization is getting OUT of IT, this experiment can be very painful for Argentinian people. Not saying it’s easy to solve current issues, the main issue is they already have a Debt with IMF that they cannot pay, how will they dollarize without dollars?? Honestly I dont think this will happen, even inside the government some dont agree with this approach as they now importance of having it’s own currency… Panama, Ecuador and El Salvador are very small countries comparable, Panama, for example, is a tax haven so it can easily retain dollars….
As an American I couldn’t be more proud for Argentina and it’s people, from President Puccio until now Argentina and it’s people have suffered economy and spiritually as a people, I pray that your culture and history will be restored if he puts Argentina people first then you will regain your proud as being Argentinian, I aways wanted to travel to your very unique country now I’m more inspired to meet you one day I’m always looking for a good steak and wine !! 2:37
The other hand, of a low peso, is Argentina’s cost of production of goods would become very low, then being able to export with very competitive prices. If a decent non corrupt givernment provides for legal security a nd easens life to exporters and argentine industry, harrased by leftish 2nd highest tax rate on trading companies, argentina will re-birth.
Two questions 1 – how may a small nation (and with hope for a positive outcome) be the tail that wags the dog for a return to savings as the basis for sound financial health in a (western) world of 50 years of financial chicanery achieved by cultivating a world view of the necessity of credit as the only proper basis for everything? 2 – will not the four ills of Argentina’s central bank system merely get kicked upstairs to the four ills (++) of the US central bank system?
I do not believe that this is something experts can truly predict the outcome of. Whether due to bias, turbulent economics, or outdated models, I predict before I watch this article through that they will not be completely accurate in their predictions. I wanna see what they think will happen and compare it to what does happen.
LMAO, “what do experts say”? Yall know that Milei himself is an economist… or what is it that you need in todays world to be called and “expert”? “Experts” told the American people that Iraq had weapons of mass destruction, “Experts” told the american people that Bin Laden was in Afghanistan but after many years of war he was found in Pakistan, “experts” told us that mask were not necessary then change their mind, experts told us that we needed to get our kids out of school to save grandma but countries like Sweden never closed and they dis not loose half of their population, “Experts” told us that the Jab was all we needed, and then the booster, and then the 3rd one, and now its a every season thing… So I ask again, what qualifies one as an “Expert”?
People believe that dollarization is Milei’s sword. It isn’t true. It is an electoral message. In order to use the dollar as currency, fiscal balance is needed. “I want to be like Rocky and win the world title” You need to train. Then it won’t matter if Rocky is fiction and if you win the world title.
Adopting another country’s currency is giving up control of your economy to their central bank without any of the benefits of actually being part of that country. Might as well just become another state in the US at this point, then at least they’ll be considered during policy making. Really what good does sovereignty do for Argentina at this point? except, the US probably wouldn’t want that burden. What’s the use in conquering territory nowadays when you’d have to manage it, invest in it, protect its peoples, etc. Much easier to make the local governments dance to their tune, and if they misbehave just make the federal reserve squeeze Argentina’s balls until they fall in line, and let the argentinians fend for themselves.
Dollarization is not a permanent solution, the Dollar is scheduled for extinction. It can be a transition. The Argentine Treasury can issue debt free Pesos and retire all the Central Bank Notes. An algorithm optimizing prosperity, (increasing the currency based on GDP), and fine tuned with AI can manage the money supply without human intervention. Interest Rates can be set by the market. The Argentine State Treasury needs to monitor and manage the States money.
They just need to create real jobs. Traditional jobs. Farming, tree planting, fish industry, construction, water filtration, the basic things that support life. When people are fed and housed, 90 percent of problem is fixed. Next would be to have sustainable electricity, airconditioning and cleaning of environment. Hardest to fix is corruption in the government as people would really kill you if you mess with them.
Dollarizing an economy… where’s the anarchy there? since the world order has been running around the dollar since the end of Bretton Woods accord in 1971, US has imposed his power on it’s coin, i don’t see any anarchy there, i just see a continuation of the past, a flashy guy making headlines, too much etiquette but no substance.
It’s great to see a politician talking of LESS state, less politicians, less centralization …. i hope he will execute what he’s saying. What happened to Argentina will happen to other countries and in the end to the world currency reserve, the dollar …. the state is the problem! The state should not interact with the Economy and Europe is an another exemple of failure. Good thing i went away to a country where the State is not involved in their citizen businesses.
There is no need for dollarization. They need put in a finacial framework (like Sweden or Germany) that control spending, and makes sure that it will be very hard to break it. On top of that they need to sell certain government assets, gut subsidies for everyone but the poorest, fix the broken export system, and open the economy for foreign investment.
None of these reports touch on the factors that have lead to this high inflation. Are they old international loans denoted in dollars? Is it limitless spending? Is it crippling tax-evasion and corruption? All these problems have nothing to do with the central bank… And dollarizing the economy does not change the fact that there is an inflationary fiat currency being used. I hope this was a bait-and-switch and Milei will establish a real stable currency like gold or crypto. Otherwise I believe people might have been deceived. Maybe it’s just a stepping stone…
Update: Si quieren saber cuál es la idea de Milei sobre dolarización lo dijo ayer en una entrevista. Milei quiere mantener la cantidad de pesos en la economía de forma estable y permitir la libre circulación y competencia de monedas extranjeras haciendo que el crecimiento de la economía poco a poco terminen en una reducción drástica de la circulación del peso. Terminará siendo un hermoso adorno de navidad.
Milei’s said he would make a lot of referendum at each step to force parliement to comply. Furthermore, while i do question how Argentina would run some deficits without a central banks – it can easily take the IMF and the US to provide loans for restructurations and dollarization. This is technically a rush against the clock since the inflation there is daily BUT: inflation isnt the whole story even with currency devaluation. If Argentina can produce a budget surplus – it can stabilize in a way that make devaluation unimportant since it will affect only trade but not its purchase power. It can use budget surplus to buy back its own currency or pay debt which could also help its credit rating. All of it is feasable but i agree that he has some serious political challenges.
Hong Kong has a fixed exchange rate with US dollar for almost past 4 decades. But one must have foreign reserves to withstand speculative attacks and obviously one needs to have trade surplus to earn foreign reserves in the 1st place. Long term Fiscal surplus or very low national debt is also kind of necessary as precondion to starve off speculations to maintain the fixed exchange rate. China has shown the world that state owned enterprises can be listed on stock market, and local governments can hire venture capitalists to invest and gain additional tax revenue from IPOs of companies which are then used to fund local education and healthcare. Social programs are not wrong per se but it s much better if they are affordable or if central bank can increase government budget through investment gains via capitalism.
Dollarization is fine in short term but not good long term because you are tied to fortune or misfortune of another country (in this case USA). They should return to 1:1 convertibility instead and accept dollar as another legal tender (you can pay taxes with them). They should also make constitutional amendments that would prevent future borrowing above a certain threshold. For example if the debt of the government goes above 50% of GDP, the government will have to create a balanced budget for next 2 years or until the debt doesn’t fall under 50%… failure would result in automatic fall of the government and new elections (the balanced budget condition will be inherited by new government too of course).
Dollarisation has a “glow” of sensibleness about it (assuming the hurdles – including getting Congress’s approval – outlined in this excellent article – are overcome). Wouldn’t it be great if Argentina was “hitching its wagon” to a currency that hasn’t, itself, been severely abused the past 3 years ? Check out the percentage of US dollars that ever existed which were printed in the past few years – something like 30% ! One has to ask if the United States is moving closer to the type of chaotic state of affairs we usually associate with countries in Central and South America ????
Debs husband says it doesn’t matter if its a country. a government, or an individual whenever more money is spent rather than taken in at some point they are going to go belly up. Printing and pumping more money into the system only postpones the agony. Our government is like an irresponsible teenager who got ahold of their parents credit card.