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Summary of the Economy
Argentina’s economy is stable and relatively productive as compared to those of other state entities in the Latin American geographical jurisdiction. Diversity is a key component with regard to its steady growth and response to social and economic circumstances that prevail in the country (Cohen 12). The existence of natural resources also plays a critical role in ensuring the sustenance of growth and prosperity amid the diverse challenges that exist in the Latin American region.
The historical progression of the economy is indicative of its resilience and overall capacity to weather turbulence and inconsistencies that are recurrent in the contemporary world. In 1997 for instance, the GDP had soared to 8 % as compared to the previous years of that decade. Despite the successes of the country’s economy, there are gross inequalities that exist among the population, thereby resulting to high poverty levels (Cohen 12).
Overview of the Sources of Poverty in Argentina
As earlier mentioned, there are high levels of poverty in Argentina. This reality links directly to the inappropriate management of naturally occurring resources in the country (Timerman par. 6). The political leadership does not bear the requisite will to reign on social and economic ills such as corruption, ethnicity and nepotism. The systems in Argentina are not well managed, hence their poor development and capacity to respond to challenges that manifest among the population.
For instance, the education and health sectors suffer from poor management. This predisposes the economy to circumstances that undermine the overall desire for prosperity and growth. This issue largely depends on the nature and state of institutions that are responsible for the planning and implementation of policies in the country. The poor infrastructure network is also responsible for the rise in poverty and apathy among the masses in Argentina (Timerman par. 8).
Description of Specific Policy in Argentina
Owing to the aforementioned challenges, the leadership in Argentina is committed to ensuring that the economy gets better and consequently enhances the improvement of the collective fate of the people (Baer & Fleischer 87). This aims to revamp sectors and institutions that are germane to the realization of economic growth and prosperity. An example of such a policy is the enactment of statutory provisions that guarantee subsidies in the production and distribution of energy.
This positive step ensures that more people develop the will to invest in industrial undertakings that overly lead to more income for the country. This policy focuses on providing opportunities that encourage domestic and foreign investment. This will in turn improve the rate of growth and progression with regard to the country’s economy (Conde 33).
Effects of the Policy on Economy
The subsidies in the production and distribution of energy in Argentina will play a critical role in initiating and sustaining a threshold of growth and improvement with regard to the economy (Candia par. 4). It is important to note that energy is one of the basic elements that determine the overall cost of doing business in a country. If the cost of energy is high, investors will be required to increase the amount of resources that they invest in their businesses.
The desire to make profits often leads them to increase prices of commodities in the market. The energy subsidies will lead to low cost of production and investment in the country. This will in turn enable people to afford goods and services that are hitherto inaccessible to low income earners (Flannery par. 3).
Baer, Werner, and David Fleischer. The Economies of Argentina and Brazil: A Comparative Perspective. London: Edward Elgar Publishing, 2011. Print.
Candia, Maria. Can Mauricio Macri Save Argentina’s Economy? 2016. Web.
Cohen, Michael. Argentina’s Economic Growth and Recovery: The Economy in a Time of Default. New York: Routledge, 2012. Print.
Conde, Roberto. The Political Economy of Argentina in the Twentieth Century. London: Cambridge University Press, 2013. Print.
Flannery, Nathaniel. Will Argentina’s Economy Finally Start to Recover in 2016? 2016. Web.
Timerman, Jordana. We Should All Cry for Argentina’s Economy. 2015. Web.