Реферат: Argentina
ARGENTINA
Argentina has experienced slow economic growthsince the 1940s.
By the mid-1970slong-term growth declined noticeably, and in
the last half ofthe 1980s the country suffered its longest
period ofstagnation in the century. Savings and investment
rates fellprecipitously from the mid-1970s until 1989.
Argentines,responding to the unstable macroeconomic
environment,increasingly saved and invested abroad. Labor
productivity fellang poverty worsened. This economic
performance wastranceable to chronic public sector deficits and
endemicinflation. Public sector deficits in the late 1970s
ranged from 10 to14 percent of GDP, and in the early 1980s
surpassed ISpercent of GDP. After the return to constitutional
democracy in1983, public demands to control inflation were
translated intofour successive stabilization programs. All
failed toeradicate inflation, and each ended in a more virulent
inflation thanthe one preceding it. The main reason for these
failures was theinability of the stabilization programs to
redress rapidlyand permanently the public sector structural
deficit. Structural deficits emerged from the post-war
organization ofthe economy. Economic policy from the 1940s was
used to propagaterules and transfers favoring the interests of
private groupswith access to power. By the early 1980s public
expendituresapproached 40 percent of GDP. Unionized labor
benefitted fromhigh wages, guaranteed employment, and rigid
rules governinghiring and dismissals. Industry benefitted from
highly protectedmarkets, tax exemptions through special
promotionregimes, subsidized credit-or effective grants, as
many loans werenot collected-subsidized inputs from public
enterprises, andhigh prices on sales to public enterprises.
Housingcontractors and middleclass home buyers benefitted from
enormous publictransfers through earmarked taxes and effective
grants throughthe Housing Bank. Tobacco growers, sugar growers,
the merchantmarine, and other small interest groups enjoyed
special taxbreaks. Consumers enjoyed below-cost tariffs from
public enterpriseand lax collectioll practices. Provincial
governments couldavail themselves of costless credit from the
provincial banks,which the central bank reimbursed. The
military enjoyedexpanding budgets, especially over 1976-82, as
well asmanagement perquisites in state companies they
controlled. By1989 subsidies through the budget, tax
exemptions,agriculcural regulations, public enterprise tariffs,
and central bankrediscounts were estimated to amount to roughly
8 percent ofGDP--the equivalent of some $8 billion. The growth
of the state andconcomitant rents and subsidies, along with the
capital flightprovoked by an inconsistent exchange rate policy,
were financedduring the late 1970s largely by external
borrowing throughthe expanding Eurodollar market at low or even
negative realinternational interest rates. This permitted the
government to runlarge deficits and sustain a revalued exchange
rate withrelatively low levels of inflation in the second half
of the 1970s. Anabrupt end to voluntary foreign commercial
credit in theearly 1980s and the sudden rise in real
internationalinterest rates provoked a financial collapse and
placed additionalpressure on public finances. The situation was
complicated bythe South Atlantic War. The loss of external
finance and lackof adjustment meant the treasury had to resort
to increasedinflationary finance through monetary creation. The
private sector,in an effort to avoid the resulting inflation
tax, graduallywithdrew its resources from the financial system
and reduced itsreal holdings of currency; this, together with
the negativeeffects of inflation on real tax collections, made
Argentina'seconomy progressively more unstable in the 1980s.
Even though thedeficit fell from near 20 percent of GDP in the
early 1980s to anaverage of about 10 percent over 1987-89, the
base for theinflation tax shrank even faster--efforts to reduce
the deficit werenot fast or permanent enough to convince the
private sectorthat savings in domestic currency would not be
eroded byinflation. Inflation became high and unpredictable,
and the mainimpediment to the recovery of private savings and
investment. Thedecade ended with two episodes of hyperinflation
in 1989.
Post-1989Structural Reforms
Tbe presentadministration took office in July 1989 during a
traumatichyperinflation--July inflation alone was 200 percent.
This culminated adecade-long crisis in public finance. The new
team inheritedweak public institutions accustomed to deficit
spending and withan institutionalized reliance on the inflation
tax. In addition,claims on state revenues were far greater than
its capacity tomobilize resources-in short, the Argentine state
was insolvent.The government undertook stabilization programs
in 1989 and 1990.Neither succeeded, principally because of the
intractability ofthe fiscal deficit. The first terminated in a
new hyperinflationat the end of 1989 and in early 1990. The
second lastedfrom March 1990 to December 1990 and ended in a
new inflationaryoutburst but, unlike the previous breakdowns,
the economy didnot spin into hyperinflation. Instead, a new
fiscal package inFebruary 1991 was sufficient to close the
remaining fiscalgap. This was followed by the April 1, 1991 Law
of Convertibilityfixing the local currency to the dollar and
effectivelyproscribing money creation other than to buy net
foreign reserves.The convertibility program disciplines
monetary policyand limits the power of the government to
finance itsdeficit through inflation. The law markedly reduced
the foreignexchange rate risk to investors and the inflation
risk to businessand labor--as long as the fiscal fundamentals
are in place tosupport it. The February 1991 program was able
to close the gapin large measure because the government's
sustainedstructural reform efforts had progressively improved
the foundationsof public finance. The government had undertaken
difficult toreverse reforms in the legal framework,
institutions, andpolicies. These included institutional reforms
of the federalgovernment, public enterprises, and
federal-provincialfiscal relations, and restructuring
liabilities withdomestic and foreign creditors to adjust them
to serviceablelevels. Other reforms have helped elicit
efficient privateinvestment, notably trade, deregulation, and
financial sectorreform.
Federal Government
The government undertook a major effort toimprove revenues
through theimplementation of a much-broad- ened and uniform
value added taxfirst to goods in February 1990, and later
extended toservices in Novem- ber 1990. The government also
improved theefficiency of the tax administration in 1989,
establishing acontrol system for the largest taxpayers that
took effect inFebruary 1991. The tax penalty law, adopted by
Con- gress in1990, provided much needed sanctions for tax
non-compliance.The tax package of February 1991 improved the
quality ofrevenue mobilization substan- tially because it
eliminated exporttaxes, reduced pro- gressively during 1990 and
early 1991,deducted higher taxes on financial transactions from
the income/assettax, and removed several minor taxes. In
December 1992subsidies to industrial promotion were
substantially cutby replacing self-monitored tax deductions
with a tax bondprogram. These efforts cumulatively produced
dramatic rises intax collections from the third quarter of 1991
on. The increasein value added tax collection allowed the
government toeliminate inefficient taxes, such as the fuel tax
and the stamptax, in November 1992, and several specific sales
taxes in May1993. Federal employment decreased from 671,000 to
284,000,including 103,000 layoffs and 284,000 teachers and
health workerstransferred to provincial payrolls. This effort
was based on aministerial reorganization that focused federal
activities oncore objectives, and improvements in the civil
service systemthrough an improved salary structure and
efficiencymeasures. The government was able to increase average
salaries andpartially restore salary differentials. The
government tookseveral measures to strengthen budgeting
procedures andexpenditure controls. By 1993 it had eliminated
105 of the 151earmarked accounts extant in 1990, and reduced
the coverage ofearmarked taxes. The September 1992 Law of
Public FinancialManagement will permit comprehensive budgeting,
effective internalexpenditure control, and provide for new
externalauditing The government has embarked onseveral
reforms toseparate the central bank from the nonfinancial
public sector andestablish it as an effective independent
monetaryauthority. The elimination of the central bank's
domesticshort-term interest-bearing obligations by means of
their conversioninto external treasury bonds in January 1990 in
effect was afirst step toward recapitalizing the central bank.
The Law ofConvertibility established a money-creation rule that
effectivelylimits monetary policy and central bank inflationary
financing ofpublic sector deficits. Since early 1991 the
central bank haspublished financial statements that reveal its
balance sheet;since April 1991 it has published its reserve
position weeklyso the public can monitor implementation of the
Law ofConvertibility. InSeptember 1992 a
new lawstrengthened the central bank's autonomy, and further
restricted itsability to extend credit to the government and
the bankingsystem. This measure reinforces the convert- ibility
law, and pavesthe way for an independent, disciplined, monetary
authority. Inaddition, the cen- trai bank intends to complete
the process ofremoving functions ancillary to the functions of
a monetaryauthority by transferring legal authority for failed
institutions tothe courts.
Public Enterprises
The government has carried out one of themost impressive
privatizationprograms in the Western Hemisphere. The objective
was to reduce thebudgetary burden of the enterprises, make the
firms morecompetitive, and increase the volume and efficiency
of newinvestment. The privatization program began in earnest in
1990 and gainedcredibility with the sale of national
telecommunicationscompany in November 1990. The program removed
politics fromprice setting in the formerly vast segment of the
economy coveredby the state. The change in the institutional
organization ofthese sectors cut off public subsidies to
consumers andlabor groups benefitting from high wages and
excess staffing,and transfers for investment. The program also
improved publicfinances: about $9 billion in capital receipts
helped closefiscal accounts in 1991 and 1992 and external debt
was reduced by$12 billion. Major privatizations included
televisionstations, the telephone company, Aerolineas
Argentinas, gasdistribution and transmission, and the majority
of the nationaloil company. It granted road and railroad
concessions tothe private sector, privatized long distance
cargo lines, andsharply reduced the railway's work force. The
governmentprivatized other public enterprises, including
defenseindustries, the nation's largest distributor of
electricity, portsand maritime transport, reinsurance, and the
entire powersector. Future privatization plans include the
national airportsystem.
FiscalRelationships with the Provinces
The governmentalso sought to restructure fiscal relation ships
with the provinces.The Coparticipation Law of 1988, fixed the
share of federalrevenues automatically transferred to the
provinces at 58percent. In August 1992 a portion of tax
revenues wasassigned to the social security system before
computing revenuesharing. At the same time, the resources
provincialgovernments could access were limited by
progressivelyterminating central bank lending to provincial
banks. Thegovernment also reduced extra-coparticipation
transfers throughthe budget. To offset aggregate increases in
resources asnational tax collection improved, the government
also transferredexpenditures to provincial administrations,
notably secondaryeducation and hospitals, and to the social
security systemin August 1992.
DebtRestructuring
The final step indealing with the government's insolvency
involvedrestructuring its debt obligations. The government had
financed itsdeficit through borrowing from the financial
system,suspending payment to external creditors, and
accumulating arrearswith pensioners and suppliers.
Restructuringeach of these required major initiatives. Although
the governmentended new rediscounts to the housing and
industrial banks,and liberal rediscounts to provincial banks in
1988, the centralbank continued money emission to finance the
treasury and itsown deficit. In late December 1989, faced with
rising centralbank deficits and the renewed threat of
hyperinflation,the government took the drastic step of
convertingdomestic, short-term (mainly seven-day),
interest-bearingobligations of the central bank into $3.5
billion 10-yeardollar-denominated treasury bonds. This
virtuallyeliminated the central bank's quasifiscal deficit and
the monetaryemission necessary to finance it-at the cost of
penalizing saversand reducing already low confidence in the
financial system.In April 1988 the government suspended payment
on its externaldebt to commercial creditors. By 1992 it had
accumulated $8billion in arrears as part of a $32 billion
medium-termcommercial bank debt. Public external debt was $61
billion. Thegovernment re-initiated partial payments in June
1990, andestablished a consistent record of paying about 25
percent ofinterest due. At the same time, it allowed external
debt to be usedin exchange for the sale of assets, which
reduced the debtstock by $7 billion. The progressive
improvement infiscal fundamentals in 1990/91 allowed the
government tobegin negotiations with commercial banks on a debt
reduction deal.An external debt agreement signed on April 7,
1993, reduced $28billion in commercial bank debt by
approximately 37percent, and eliminated interest arrears. This
debt deal isexpected to improve Argentina's creditworthiness.
The agreementformalized arrears in a 12-year uncollateralized
bond at LIBORplus 13/16 with a 3-year grace period, after a
$700 milliondownpayment. Existing debt was exchanged for
collateralizedpar bonds with a fixed interest rate, or
collateralizeddiscount bonds at 65 percent of face value paying
LIBOR. The newcollateralized bonds will have a 12-month rolling
interestguarantee. For most of the last decade, the government
has paid onlyabout half the legally mandated pensions owed
social securityrecipients. Arrearages were not recorded in the
fiscal accounts,but are estimated to be as high as $7 to 10
billion. To stopthe accumulation of arrears, the government
modifiedcoparticipation in tax revenues in favor of the social
securiry systemin August 1992. Since then, the social security
system has run asmall operating surplus. The government also
accumulatedarrears in 1990 with suppliers through formal
suspension ofpayment on goods and services already provided,
and the healthfunds have arrears with their service providers
that will alsoresult in new debt. Finally, the government, as
part of itsincome tax reform, suspended poorly designed loss
carry forwarddeductions for the corporate income tax, and
agreed to issuecompensatory bonds. To settle these claims,
Congressauthorized the government to issue consolidation bonds.
The service ofthis debt will be capitalized until 1997, but
payments on theorder of $3 billion will be required in the last
years of thedecade. The federal government's share of the
proceeds of theprivatization of the state oil company is
earmarked forrepurchasing some of the consolidation bonds.
Social SecurityReform
The governmenthas moved towards replacing a failed public
pension system.In mid-1992 it submitted a law introducing a
combinedstate/private system: the state would supply a uniform
basic pensionfinanced on a pay as you go basis while the
private sectorwould supply pension funds. Membership in both
schemes would bemandatory. The lower house of the Argentine
Congress passedthe law-with significant modifications--in May
1993. Thegovernment expects the legislative process to be
completed beforethe end of the year, allowing a new system to
be established inmid-1994.
Trade,Deregulation and Financial Reforms
In 1991 thegovernment accelerated and largely completed a trade
liberalizationprogram that began in laIe 1986, but had suffered
temporaryreversals in 1989. Virtually all export taxes and
quantitativerestrictionsexcept for automobiles--were
eliminated. Themaximum ad valorem tariff was reduced from 115
to 35percent. The deterioration in the tradebalance in 1992,
a consequence ofmassive capital inflows motivated government to
use commercialpolicy to achieve effective devaluation within
the fixedexchange rate regime. Exporter rebates were raised
from 8 to 13percent. On the import side, the tariff band was
narrowed to O to20 percent. The government also increased a
flat tariffsurcharge, called a statistical tax, from 3 percent
to 10 percent ona temporary basis. This led to an effective
depreciation ofabout 5 percent. In May 1993 the government
eliminated bothtariffs and the statistical tax on capital goods
imports, but inJuly it provided protection to some paper and
textile productsthrough temporary import quotas and tariff
surcharges. Amajor domestic deregulation decree in October 1991
ended a series ofmarket-impeding rules, dissolved several
regulatorybodies, and unified pension and health insurance
payments toreduce evasion. Subsequent decrees have deregulated
pharmaceuticalimpons and ports. The industrial promotion
program andsubsidies to Tierra del Fuego were markedly reduced
in November 1992.The publicly-owned housing and development
banks, long subjectto political influence and dependent on
governmentfinancial support, are undergoing major
restructuring.Branches of the National Development Bank and the
National HousingBank have been closed since March 1990 and
their staffs havebeen reduced by almost 75 percent. The
government isliquidating the development bank and closing the
housing bank'sretail functions. It has established a second
tier bank to bemanaged, and ultimately owned, by the private
sector tomobilize financing for its investment needs. In
response to ashort-lived run on the peso in mid-November 1992
the authoritiesstrengthened their commitments to the fixed
exchange rateregime by permitting reserve requirements to be
met either inforeign or domestic currency, and equalizing
reserverequirements on foreign and domestic
currency-denominatedchecking accounts in domestic transactions.
In February 1993these measures were complemented by lowering
reserverequirements and further deregulating commercial bank
lending to theprivate sector. Term deposits under 30 days were
eliminated toincrease the average maturity of deposits in the
domesticfinancial system and reduce the risks of a run on the
banks. Finally,since April 1993, bank compliance with reserve
requirements isbased on a four-week moving average, which
should reduce thevolatility of short-term interest rates.
Over the last sixmonths Argentina has taken meas- ures to
reduce interestrates and stimulate investment. In October 1992
it imposed a 2percent per month ceiling on loans made by public
banks, a measurealso aimed at stimulating restructuring of
these banks. InMarch 1993 it began auctioning subsidy credits
to banks, withthe winner of the subsidy being the bank that
offers to charge thelowest rates to final medium- and
small-scaleindustrial borrowers. In May 1993 the authorities
an- nounced theextension of the Banco de Nacion's credit
lines-the largestofficial bank--and a reduction in its lending
rates from 1.8percent to 1.6 percent per month. They also
declared that thebank's credit policy will be oriented toward
export-orientedactivities as well as agriculture, industry,
mining, andtourism.
Recent Macroeconomic Developments
In 1992 the authorities continued to adjustthe economy,
extending therecent good economic performance. GDP grew by 8.7
percent, andindustrial production grew in the 12 percent range
for the secondyear in a row. Employment rose by about 10
percent andinvestment expanded briskly in 1992, rising from
12.5 percent to14.5 percent of GDP. The increased investment
was financed byexternal savings, with gross national sav- ings
decliningmoderately to 9.3 percent of GDP. Public savings rose
by about 2percentage points of GDP, while privatesavings
fell. Fiscal performance has improved notably inthe last two
years. Theoverall balance moved into surplus in 1992 for the
first time indecades with an operational primary surplus of 2.0
percent of GDP.Tax revenues increased from 13.5 percent of GDP
in 1989 to nearly24 percent between in 1992. In the same
period, publicexpenditures fell as a percent of GDP. Capital
spending andnon-privatization receipts both declined slightly.
The fiscalsurplus also was improved by the drop in dollar
interest rate,which cut accrued interest obligations by 1.3
percent of GDP.However, interest obligations still exceeded the
operationalprimary surplus slightly in 1992. Inflation
continues todecelerate. The annualized inflation rate in the
last quarter of1992 was about 9 percent, compared to over 20
percent a yearearlier. Nonetheless, inflation still exceeds
internationalrates, which is necessary to sustain the fixed
exchange rateregime. During 1992 capital inflows, jointly with
the economicexpansion, contributed to an 84 percent increase in
imports; exportsrose by 1 percent. As a result, the current
account deficitfor 1992 reached 5.2 percent of GDP, up from 2
percent a yearago. Capital inflows of $12.0 billion, mostly
private, morethan offset the current account deficit, allowing
a $3.4 billionaccumulation of reserves. After signs of slowdown
in economicactivity during January and February 1993,
industrialproduction recovered in March and April, with the
first quarter of1993 marking the eleventh consecutive month of
economicexpansion. Capital inflows recovered in the first
quarter of 1993,further strengthening the level of
internationalreserves. The monthly inflation rate between
January and March1993 averaged 0.7 percent, about the same as
the last quarterof 1992.
Medium-TermProspects
The governmentprojects real growth averaging 6.5 percent over
1992-95. Overthis period its fiscal program for aims at
generating aprimary surplus sufficient to finance interest
obligations, thuseliminating the need for the inflation tax.
This involvesefforts to raise the primary balance from about
$3.3 billion in1991 to about $4. 1 billion in 1995. The success
of this programwill largely depend on medium-term reforms to
improve thestructural underpinnings of public finance, such as
social securitylegislation, labor reforms, and the evolution of
the fiscalrelationships with the provinces, given the
increasingdecentralization of power and responsibilities from
the center toprovincial governments. This scenario is
attainable if thegovernment continues to improve its fiscal
position, and ifprivate markets generate a smooth transition to
a sustainablebalance of payments and growth path. There are
significant risksto this program. The probability of adverse
events affectingthe convertible peso declines, however, as the
governmentprogresses on reforms that improve the fundamentals
of publicfinance. Past reforms in the public sector anchor
stabilization andare unlikely to be reversed during any
financialturbulence. Also, reserves are the highest in a decade
and cover themonetary base (although not the deposit base),
which would detera speculative attack on the peso. Even if
problems giverise to pressure to alter the policy framework, in
all likelihoodany emerging policy regime would of necessity
focus onmaintaining fiscal balance and policies conducive to
privateinvestment. Over the last few years Argentina has
enacted serious anddifficult structural reforms with
considerablepublic support. The lack of alternatives to fiscal
discipline andprice stability, and memories of the
hyperinflation of1989/90, have made stability politically
popular. Thesefacts are powerful ballast that is likely to keep
the ship ofstructural adjustment headed in the same direction,
even in afinancial storm.