Development Blog Post 1
Argentina and Uruguay are somewhat of developmental anomalies when compared with the rest of Latin America. Their uniquely decentralized positions in the colonial economic landscape during Spanish rule allowed them to develop far more independent trade-based economies. This, combined with progressive socio-political policies during the twentieth century, has pushed them to the forefront of Latin American Development. In this blog post I will analyze Argentina and Uruguay’s economic as well as human development both in reference to each other and the rest of Latin America.
At the start of the twentieth century, Argentina was on a course to become a global economic power. Argentina’s massive beef export industry and the ideal global port of Buenos Aires had allowed it to begin the process of industrialization quite early in their history. However, this very advantage ended up contributing to Argentina’s ultimately disappointing economic growth. Because of the success and fertility of Argentina’s agricultural sector, the ruling class decided not to invest in new forms of value-added manufacturing, preferring g instead to reinvest in the high performing agricultural sector that maintained the status quote of their dominance. We see this phenomenon reflected in Argentina’s current economic data. Argentina has the 28th highest GDP in the world at $922 billion dollars as of 2017 but the 88th highest GDP per capita globally at $20,900 at the same time of measurement. This reflects a large overall economy, but one where the wealth is highly concentrated in the upper tier economic classes. This can be witnessed in Argentina’s Gini index measure of 41.7, the 54th highest in the world. Argentina is currently in the midst of a significant economic crisis with annual inflation rates of a shocking 50%, 70% interest rates crushing investment prospects and precipitating bankruptcy, and constant layoffs and factory closures continuously damaging prospects of recovery.
Uruguay, on the other hand, has managed to finally decouple itself from the recently plummeting economies of Argentina and Brazil. Uruguay has historically been a country dependent on the financial success of these two powerhouse neighbors to their north and west, exporting beef, dairy products, and other raw agricultural goods. In recent years, Uruguay has made efforts to both diversify their economy by moving into value added good production, like manufactured dairy products and electronically traceable beef, as well as expanding their diversity of trading partners to reduce their dependency on their giant neighbors. Because of this, Uruguay’s economic development has continued to rise over the past twenty years, despite the Chinese encouraged resource boom of 2000-2010 coming to an end. Uruguay’s total GDP is $78 billion, much smaller than Argentina’s, however it is a country with a much smaller population. Uruguay’s economic figures of equality are fairly similar to Argentina’s, with a GDP per capita of $22,400 and a Gini index score of 39.5, both reflecting a slightly more egalitarian society than Argentina. This is quite impressive considering Uruguay’s much smaller population and historically lower levels of industrialization.
In comparison to the rest of Latin America, Uruguay and Argentina have two of the lowest GINI scores in a region considered one of the most inegalitarian in the world. However, the gap has been closing over the last twenty years, with other nations in the region making significant gains in equality while these two nations have only marginally decreased their levels of inequality. In general, the average GDP is $187 billion in Latin America, with Argentina significantly exceeding this and Uruguay producing about half of this figure, though this measurement varies significantly based on the population of a country. In Latina America, the average GDP per capita is about $8300, which both Argentina and Uruguay significantly exceed. In general, Uruguay and Argentina are outperforming the rest of Latin America in terms of both raw economic production and in their levels of inequality.
Another highly valued measure of development in a nation is the measure of human development in a country. Human development is a scale derived from average life expectancy, average levels of education at different ages, and GNI per capita. Argentina’s HDI, according the UN Human Development Report, is .825, while Uruguay’s in .804, ranking 47th and 55th in the world, respectively. Argentina is slightly ahead of Uruguay; however, it is worth noting that the rate of Uruguay’s progress in this measure has been significantly higher than Argentina’s in recent years, reflecting Uruguay’s recent economic and social successes. In 2014, Latin America and the Caribbean held an average HDI of .74, once again reflecting Uruguay and Argentina’s relative developmental superiority in the region in general and specifically in the field of Human Development.
Argentina and Uruguay have consistently demonstrated their status as economic and social frontrunners in Latin America, a phenomenon that many scholars attribute to their economic and governmental distance from colonial powers during Latin America’s colonization. Path dependencies like these can often explain varying levels of development in the world, however Argentina’s recent economic failures demonstrate that all is not set in stone. Developing economies should bear witnesses to the successes and failures of both of these nations that are somewhat further down their paths of development than the rest of Latin America and attempt to improve on failures and emulate successes.
Argentina Study Abroad 