Geography Reference
In-Depth Information
supply goods during the Depression, and during the Second World War, when
lines of communication were cut off. After the war, this continued as import
substitution industrialization (ISI) became a central policy in Argentina. Many
industries were created on this basis, without a strong competitive advantage, but
feeding on the large domestic market in and around the city. ISI policies meant a
build-up of industries in and around Buenos Aires in the first stage up to and
including the 1950s, since the early industries concentrated on final consumer
products. Their best location was close to the largest single urban market in the
country.
Another developmental dimension was the social. Argentina failed to develop
an open society, and instead remained with a strong state apparatus and an elite
which controlled it, and on the other hand, a growing mass of the poor,
immigrant peasant stock from southern Europe. Frederick Jackson Turner
(Hennessy 1978) had claimed that the us society was formed through the
thorough and democratic mixing of homesteaders on the western frontier, as that
country expanded. Argentina's frontier was more or less deserted, incorporated
into great ranches rather than given out to homesteaders, and the few farmers
there were temporary tenants, who mostly migrated to the great city of Buenos
Aires before they could begin to create the structures of civil society in the
countryside. A small landholding elite thus came to rule the country, and restrict
economic change and access to resources for the many.
In recent decades, Argentina's developmental model has encountered serious
problems. Following the earlier and easier stages of import substitution, from the
1950s the country started to move into the building of more advanced import
substitution. In the terms of Dietz (1995), this meant moving from “horizontal”
to “vertical” substitution strategies, producing not only consumer non-durables
such as beer and clothing, but also consumer durables such as cars and television
sets, cookers and washing machines. This led to two kinds of problem. One was
the rapid exhaustion of the market, since economies of scale demand much
larger markets than Argentina could muster for efficient manufacture of such
items as cars and washing machines. In this way, the country started to provide
its industries with heavy tariff protection from competitors, and they became
inefficient. Another problem was the continued reliance on imported goods,
since the inputs to such industries still came from abroad, and heavy imbalances
in foreign trade were incurred. All Latin American countries became partially
aware of these problems of external dependence, which would eventually
produce a debt crisis that has slowed further development. Their solution, to form
an internal grouping of countries in a Latin American Free Trade Area
(LAFTA), was not a real solution, partly because it was never properly
instituted, and partly because the enlarged market was still effectively a protected
one, a Latin market. Current groupings, like the Southern Cone Common Market
with Brazil, Uruguay and Bolivia, have yet to prove that they are different in
content.
