ARGENTINA AND ITS CRISES
ARGENTINA AND ITS CRISES INTRODUCTION All Argentines living abroad, in my case in Peru for the past 50 years, have been asked countless times, "How can it be that Argentina, once so prosperous, is in this state?" I understand that more knowledgeable and wiser individuals than myself have attempted to provide very scholarly explanations on this matter. I will try to give my perspective on the issue. THE CHRONIC DIVISION DEFICIT The problem arises when it is noted that there are not enough funds to cover the main outflows: import payments, debt repayment, and capital outflows from the country. Argentina's foreign currency earnings have always depended primarily on food exports. Both grains and meat and their by-products are significantly the main sources of foreign currency. Nowadays, Argentine exports reach approximately 16% of GDP. The problem arises when it is noted that this is not enough to cover the main outflows: import payments, debt repayment, and cap...