Political Economy

Since 2002 an economic programme has been established and is characterized by fiscal solvency, monetary prudence, flexible Exchange rates, social inclusion and export dynamism. The results of all ofthe above policies made the Argentine economic sector stronger. Strong economic growth has been achieved, with a nine per cent average annual increase in GDP, while the rates of unemployment,poverty, and destitution have been significantly reduced. Private consumption has shown a recovery, and there has also been a revival of investment, which is the key to expanding Argentina´s productioncapacity and preventing rising demand from stoking inflation. At the same time, a trade policy based on the world trade organization principles and disciplines has been introduced, which is characterizedby pragmatism and the effort to expand Argentina’s foreign trade on a sustainable basis, through a combination of multilateral, regional, and bilateral approaches aimed at maximizing market accessopportunities for exporters of goods and services. The determinants of the recovery and the improved macroeconomic situation were predominantly internal factors associated with the consistency ofeconomic policy decisions. The commitment to fiscal discipline and a monetary policy which, in that first stage, supported the recovery of public demand for real balances, created suitable conditions for thereduced impact of exchange rate depreciation to domestic prices. What helped and contributed to reducing price rise pressures is the fact that there was no change in the policy of tradeliberalization pursued by MERCOSUR, of which Argentina is a member state. But the low inflation environment that characterized the end of the crisis served to maximize the effectiveness of the incentives offeredby the new relative price structure with respect to the increase in economic activity and employment. So we can say that the policies implemented by the government were the right ones and they were...