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Argentina Economic Analysis

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Introduction

Insight into Argentina and Australia: Australia's market economy is thriving with a GDP per capita that is on par with other developed economies, while Argentina is classified as a Secondary emerging market by the World Bank. Australia has maintained economic growth over the last 16 years, driven by high confidence, high employment and increased demand for its export commodities. Traditionally, Argentina has been THE TOP Latin American country. However, due to the long economic, political and social slumps, indicators have significantly worsened. The middle-class has shrunk and numbers living below the poverty line sadly proliferate. In spite of the negative conjuncture, Argentina still preserves favourable indicators. Both Argentina and Australia have high degrees of civil rights; their constitutions provide and promote freedom of speech. Spiritual standards are practiced freely, movement is not restricted and the press are unregulated. Gender equality in Australia is guaranteed through legislations such as the "Sex Discrimination Act 1984" which 'aims to eliminate discrimination and sexual harassment and promote greater equality in all aspects of the Australian community.' Various anti-discrimination laws ensure that workers receive the same wage and benefits. Gender Equality, along with in Argentina has also significantly advanced but traditional social patterns continue to undermine their participation in labour. ...read more.

Middle

Economic History: In Australia's modified market economy, Government Intervention ensures a better outcome for society. They provide necessary infrastructure and collective goods which would be unfeasible for private enterprises to provide due to costs involved, and regulate certain aspects of economic activity to ensure markets operate competitively and with fairness. Since 1980, Australia has undergone a series of macroeconomic reforms; reduction of high tariffs and quotas, floating of AUS$, privatisation of public entities and deregulation of financial sector for foreign liberal access in Australia. This was in response to the globalisation of world trade; in order to create markets and business opportunities for Australia. Australia is part of many unilateral trade agreements (USA, Singapore, NZ) and according to the Commonwealth Department of Foreign Affairs and Trade, Australia "has a sound, stable and modern institutional structure that provides certainty to businesses and offers a welcoming destination for investment. Australia also has low barriers to trade and investment. Competition is substantial across the economy." The Argentine Economy is considered rather volatile (due to recurring economic crises, continual persistent account deficits, and high inflationary rates) and constant Government monitoring and intervention is essential to keep it afloat. ...read more.

Conclusion

Development of the Secondary Sector (20% labour force, 30% exports, 23% GDP) especially chemical production, food processing and steel production, in the Australian economy has been influenced by Australia's domestic market and geographical isolation. Coupled with policy to provide protection for domestic producers through high tariffs and quotas, manufacturing industries in Australia have mainly focused on providing goods for locals rather than for export. Manufacturers have struggled from competition from rapidly developing Asian industries, and many manufactured products (cars, durable goods) are now replaced by 'import-substitutes'. Recently, the Australian tertiary sector (75% of labour, 25% of exports, 70% GDP) has experienced stable growth particularly in tourism, retail, and finance. Communications and transports services are major constituents but due to the huge capital costs involved with providing these services to the dispersed population, governments have funded these services predominantly. However since the microeconomic reforms in 1980, many of these services have been privatised (Telstra). Growth in the Argentinean service sector has been attributed to economic liberalizations in 80s and 90s. Telecommunications and financial services have seen dramatic expansions due to foreign investment in these areas. Certain segments, however, have had their growth restricted such as retail, as recent recessions have constrained consumer spending. Despite this, the Argentinean Tertiary Sector is still the biggest contributor to total GDP. 1237 words ...read more.

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