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Argentine economics on display

The Argentine government has been tightening the noose on Repsol over recent months, withdrawing operating licences and accusing the company of failure to invest adequately in its Argentine operations.

So, in order to increase foreign investment they\’ve decided to confiscate a foreign investment.

That\’s going to work well isn\’t it?

A century ago Argentina was one of the two or three richest countries on the planet. Now it most distinctly ain\’t and there\’s more than a sneaking feeling that the economic policies of the past century help explain why.

14 thoughts on “Argentine economics on display”

  1. The top three economies in the world in 1912 were USA, Germany, UK in that order; Argentina wasn’t one of them.

    Argentina has never been ahead of the UK or the USA so it’s never been in the top two in the world. It was third very briefly at the end of WWII (in absolute size, not per capita – even then, Canada, Australia, New Zealand, Switzerland and Sweden were ahead)

    It was, however, in the top ten world economies for most of the first half of the twentieth century, so while you overstate your point, the substance is still good. Wiki has it at 27th overall at the moment.

  2. I can understand the Argentines pissing off the UK over the Falklands, pricks though they may be anyway. But pissing off the Spanish over Repsol is mental, they’re their main ally in the world.

  3. British companies built and operated the railways in Argentina when Argentina was in the top tier, and a bit later on when the Argies were having on of their bouts of idiotic nationalism the government confiscated said railways.

    Anyone who has been to Argentina will know that the railways look as though they haven’t been looked after since about that time.

    Pissing the Spanish off at the same time that they are pissing the Brits off seems foolish. The EU must be one of Argentina’s bigger investment/trading partners.

  4. But pissing off the Spanish over Repsol is mental, they’re their main ally in the world.

    On the surface, maybe. Underneath the surface, the Spanish think Argentina is a dysfunctional basket case, just like everyone else does. Of course, they now do so even more than they did last week, so it really is a breathtakingly dumb thing to do.

  5. Blue Eyes: In the early 1990s, Argentina could no longer afford to subsidise its railways, in the vast bulk of the network was simply closed, apart from commuter and a few regional services into Buenos Aires. You have a magnificent but run down early 20th century railway station (or rather, several side by side) at Retiro in Buenos Aires, but very few trains.

    Of course, there has been this belief ever since the railways were closed that they might somehow, someday be revived, so you drive around the Argentine country side and you see lots of run down railway infrastructure: railway stations, level crossings, long alignments of sleepers without any rails – the rails having presumably been sold or stolen for scrap decades ago. It’s kind of depressing, but whether it is better or worse than subsidising uneconomic railways and having one train a day , I don’t know. What is depressing is that you keep driving down Argentina’s wholly inadequate rural roads, and every now and then you are stopped at a police (or is it the army?) roadblock for no reason where they ask you to open the boot of your car so they can inspect what is inside it. Nothing works like it does in a proper country.

  6. Plus side, the chances that they’ll be able to afford to put together an invasion fleet capable of overcoming two British warships, a nuclear sub, four Tornadoes, a thousand SAMs, and 2,000 British military personnel rescinds from “not likely” to “not even theoretically possible”.

    Good news for Falklanders, albeit bad news for the amateur-military pornographers who currently seem to put a “WHY WE COULDN’T FIGHT THE FALKLANDS WAR TODAY” piece in the Telegraph every month or so.

  7. So Much For Subtlety

    john b – “Plus side, the chances that they’ll be able to afford to put together an invasion fleet capable of overcoming two British warships, a nuclear sub, four Tornadoes, a thousand SAMs, and 2,000 British military personnel rescinds from “not likely” to “not even theoretically possible”.”

    It is true that it is becoming less likely, but this is an unusual claim. Two warships? More likely one destroyer and a patrol boat. The nuclear submarine may or may not be there – and it is the main deterrent because they can’t know. I think the Tornadoes have been replaced by Eurofighters – but four them. The present Argentinian Air Force could surprise them without too much trouble I expect. A thousand SAMs? You mean one Royal Artillery Rapier Detachment. So a missile system that does not work particularly well. I doubt that a single detachment has as many as 100 missiles or that they are capable of firing even 1% of those at any one time. 2,000 British Army personnel actually works out as one infantry company.

    “Good news for Falklanders, albeit bad news for the amateur-military pornographers who currently seem to put a “WHY WE COULDN’T FIGHT THE FALKLANDS WAR TODAY” piece in the Telegraph every month or so.”

    We probably couldn’t. Even if your claims are true, they would be irrelevant. As taking the islands back is very different from deterring the attack in the first place.

  8. The people running Argentina today are in their 40s and 50s, mainly. This means they were in their teens and twenties in 1982. The whole country was deeply traumatised by what happened then, and people in the current government remember it vividly. There is no way any of them would risk such a humiliation again, so Argentina attempting to take the islands again by force seems unimaginable to me, regardless of the actual military situation. What we are getting now is bluster, and for the moment it is going to remain only bluster.

    At least, that is the case for now. When the people running Argentina do not have first hand memories of 1982 and did not getting first hand accounts of 1982 from people who have them, that’s when things become tricky again. That’s several decades off, though.

  9. SMFS: yes, I know we’d struggle to take the islands back today. We’d also struggle to down the Luftwaffe’s fighter campaign, and we’d utterly suck at trench warfare in the Somme. “Fighting the last war” is generally seen as a flaw among military commanders, not a commendable trait.

    The point is, only the least sane members of society could imagine a scenario where any of these things took place.

    I’m also baffled as to why people who otherwise tend to identify as British patriots tend to utterly talk down the skill, capability and professionalism of our armed forces (in the sense that every non-British military-knowledgable person I’ve spoken to rates the Falklands garrison as unbeatable; the only people who believe otherwise tend to be “DOOMED WE’RE ALL DOOMED” Telegraph readers).

    Michael: good point. We’d also need the people running the UK to have forgotten about 1981, if you see what I mean.

  10. So Much For Subtlety

    john b – “yes, I know we’d struggle to take the islands back today.”

    So you agree with the old buffers in the Telly? Fine.

    “We’d also struggle to down the Luftwaffe’s fighter campaign”

    No we wouldn’t. Even with the puny air force we have left, they would not last long.

    “and we’d utterly suck at trench warfare in the Somme.”

    Not sure we would do that either. Mostly because the tiny number of tanks we have would mean we would not be in the trenches for long.

    ““Fighting the last war” is generally seen as a flaw among military commanders, not a commendable trait.”

    Well that depends. Usually what worked is what works. But the point here is surely that you are insisting that we can fight the last war and the gentlemen in the pages of the Telegraph are reasonably pointing out we cannot?

    “The point is, only the least sane members of society could imagine a scenario where any of these things took place.”

    If you mean the politics of Argentina are unlikely to return to an invasion, you may be right. But Argentinian politics are fickle and volatile. They could do anything at any time. Military planners usually sensibly insist on looking at capabilities, not intentions. But if you claim that we do not need a large enough Armed Forces to re-take the Falklands because the Argentinians are not likely to try again then your claim is self-contradictory (as the one thing likely to make them try again is the fact that they will win this time) but also irrelevant to your complaint (given that saying we could not take them back is true even if it is unlikely that we would be in a position we would have to). You are confusing two separate issues. Presumably because you do not like being told what you do not want to hear.

    “I’m also baffled as to why people who otherwise tend to identify as British patriots tend to utterly talk down the skill, capability and professionalism of our armed forces (in the sense that every non-British military-knowledgable person I’ve spoken to rates the Falklands garrison as unbeatable; the only people who believe otherwise tend to be “DOOMED WE’RE ALL DOOMED” Telegraph readers).”

    Name three non-British experts who think the company of soldiers we have on the Falklands could withstand an invasion. British soldiers may be good, but they are not that good.

  11. To avoid the potential for deliberate misinterpretation and sophistry, I’ve bulleted my points:

    1) the British armed forces, as currently constituted, could not readily take back the Falklands in the event of an Argentinean conquest. This reflects the extreme difficulty of amphibious invasions.

    2) the 1982 Argentinean conquest of the Falklands succeeded, despite the extreme difficulty of amphibious invasions, because the islands were defended by no ships, no aircraft and only about 50 Marines.

    3) Argentina, at present, does not have the military capacity to invade the Falklands given the current levels of British defence (as above), even if it wanted to.

    4) Argentina does have the military capacity to repeat the 1982 invasion, in the event that we were to send our troops, ships and aircraft home and leave the islands effectively undefended.

    5) Argentina obviously won’t invade right now, because it would be a duck-shoot and an embarrassing, terrible failure, even if Kirchner were mad enough to consider a war a good idea in principle.

    6) in theory, Argentina could build up its armed forces to a level where an amphibious invasion against the current level of British defences was possible.

    7) if Argentina were to start building such a force, it would take months if not years, and we’d notice.

    8) Despite cuts, we have a far larger navy than Argentina’s, most of which could be brought to the South Atlantic in a matter of months if required (including 18 helicopters on Illustrious). Sending aircraft from bases elsewhere would take a couple of days, as would sending thousands of extra troops on transport aircraft.

    So we can’t fight the last war – but we only had to fight the last war because we massively stuffed up. This time, the fact that we can’t fight the last war doesn’t matter, because there is no prospect that the last war could arise.

    The worst case scenario is one where Argentina builds a large invasion force, whilst we build a large defence force. This would be expensive and distract from military commitments elsewhere, but it would still be eminently feasible.

    The only way, given the massive superiority of the RAF over the Argentinean air force, that we could lose would be if we lost Mount Pleasant – and there isn’t a credible scenario under which that happens.

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