Geography Reference
In-Depth Information
Within the development programme of Argentina itself, the first efforts at
vertical ISI encouraged a yet further incursion into import substitution, and
Argentina became a producer of a variety of goods, such as steel. Its major
integrated iron and steel mill at San Nicolas on the River Plate above Buenos
Aires started production in 1960. This was intended to rely on domestic raw
materials, but there was never any domestic source of coking coal, and the iron
ore mined from Sierra Grande in northern Patagonia was always high cost, the
mine in fact being closed in 1990. This was not even the first steel mill; this had
been at Zapla, near Jujuy in the far northwest, where a military government in
1943 had installed a mill based on local ores and charcoal instead of coke, from
some 18,000 hectares of plantation eucalyptus. This mill was highly
uneconomic, but it demonstrates the extremes to which countries concerned for
self-sufficiency will go in defying markets. The steel industry is only one
example; similar ventures in industries such as oil production, refining and
petrochemicals, in timber, pulp and paper, aircraft manufacture, and in agro-
industries such as cotton, sugar, and tobacco, were built up behind a wall of tariff
protection. In the 1970s, investment was expanded into massive hydroelectric
schemes, the most notable being the Yacireta scheme on the Middle Parana,
which was not even built for 20 years because of political machinations, although
large amounts of public money were spent. A number of hydroelectric projects
were completed on the middle valley of the Rio Negro at the same time. All of
these large projects were direct investments by the government, or by
autonomous agencies which were in the public sector and removed from
competitive pressures.
While industry was being sponsored by government, the farming regions of
the interior suffered from population loss and a stagnation of the farming sector.
Taxes on farm exports meant a loss of interest in the sector and a lack of
investment. In addition, there was a large area in the northwest of near-
subsistence farming and large estate agriculture, comparable to Spain's
Andalucia. The ratio of income per capita in the northwest to that of Buenos
Aires was 1:10, a far more extreme difference than in western European
countries.
Forward development by Argentina, once checked in the first Peron era, was
very limited in the period thereafter up to the advent of the Menem government
in 1989. Hyperinflation and the inability to bring the public sector budget under
control (partly because of the many huge projects in the interior) made overseas
companies unwilling to invest in the country, and full opening to competition,
externally through reduction of tariffs, and internally through privatization of the
large range of state industries, was only achieved in the 1990s.
Regional policies
It was noted earlier that from the beginnings of Argentina's history there has
been intervention by the state to control territory, and that expansion of the
