Newspaper article St Louis Post-Dispatch (MO)

Privatized: Argentina Wants Government out of Its Business

Newspaper article St Louis Post-Dispatch (MO)

Privatized: Argentina Wants Government out of Its Business

Article excerpt

Over the last seven years, Argentina has undergone an economic and business revolution.

"In 1990, we had an inflation rate of 4,923.6 percent - I always have to put in the .6 percent," said Ricardo Gauthier, the Argentine General Council in Chicago. "For 1996, it's projected that inflation will be 0.2 percent. This is the lowest inflation rate in the world."

Moreover, since 1990, Argentina has radically restructured its business law to allow easier foreign investment and trade, Gauthier said. Along with Chile, Argentina has now become one of the top foreign trade and investment opportunities in Latin America, Gauthier said. Continuing the process that began in the early 1980s, Argentina has privatized what was once one of the most state-owned economies in Latin America. "Starting in 1940, with the oil industry . . . and then with the new steel industry, the government felt that private companies could not capitalize the industry," Gauthier said. In the post-World War II era under both military and civilian regimes, Argentina nationalized nearly all major companies in the name of economic development. "Even companies that made sweaters" were nationalized, said Gauthier. "If any company got into financial trouble, the government would step in to maintain the labor source." But with a closed economy, Argentina's national debt and inflation rate became impossible to maintain. The need for a radical economic transformation was apparent by 1990, Gauthier said. "There was a cultural change. A consensus was reached that the role of the state should be limited to defense, justice, the police and education, with the economy in the hands of individuals and the general public," Gauthier said. "One hundred percent of federally owned industries (including oil and utilities) are now privatized," he said. "Few thought we would privatize the oil industry; it was considered a sacred cow. …

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