Saturday, August 18, 2007

Is the supply-side school downplaying the news about Argentina's continued growth?

I recently read an article by David R Butcher titled "Where the Offshore Outsourcers Offshore Outsource" and available HERE.

I had high hopes due to the title, and instinctively tried to read it while scrolling down to find what references about offshoring operations in Argentina were included. I was very disappointed, the word "Argentina" is not even there, despite the increase of Offshoring (IT, software and services) in Argentina, which surely added its part to the sinking unemployment rates and economic recovery the last four years'.

One paragraph reads: "where do India’s outsourcers outsource? China, the Philippines, Malaysia, Vietnam, Brazil, Romania and Morocco — you name it. ". Well, I guess "you name it" also ought to include Argentina. In fact, India's TATA Consulting Services (TCS) arrived five years ago. And success stories of firms offshoring and investing in Argentina in the last four to five years are easy to find if you look hard enough. But no, not a single reference.

But it's not this writer's fault. (if you're reading this, it isn't about you, read on, it's just that your story and the strange lack of mention of Argentina kickstarted my thought process).

Thinking aloud:

There seems to be a strange "vacuum of good news" about Argentina on the English language mainstream media (and my standard for doing this is simply typing word pairs like "inversion, argentina" (investment argentina-unquoted-) into Google News Argentina ( then repeat the search with the same terms, this time in English language and into the international "Google News" search engine (

My unscientific tests showed that roughly nine out of ten times, all positive economic news about Argentina appear ONLY in the local Spanish language news sites, but those news stories are usually -and suspiciously- RARELY echoed in English for the global audience, while short-lived political scandals involving Miami millionaires --once against Chavez but then flip-flopped and doing business with Venezuela's PDVSA (until a few weeks ago)-- caught trying to enter with a bag full of cash ($800,000) into Argentina are regurgitated ad-nauseum as some sort of "further proof of Argentina's corruption and hopelessness". Hrmm ... smearing PR campaigns to weaken the ruling center-left coalition and impose a more "pro-market", "pro-White House" candidate..... where have I heard of that?.

Just for the record: In the last four years, the country's economy grew like never before, plummeting unemployment, the number of unemployed people receiving government unemplyment subsidies fell 50%, and the country has been enjoying for the first time in several decades (it didn't happen since the 1920s!) year-after-year consecutive growth coupled with simultaneous fiscal surplus and a trade surpluses, all this due in part to a competitive exchange rate for Argentina's industrial and agricultural exports.

So is the majority mainstream trade press talking about the "Argentina Miracle". Well, no. Or at least not that I could see. Only BusinessWeek ventured to say so back in 2002, but it was a timid article and the recovery just started back then. When the press speaks about the region it often says "Good times in general for Latin America" and then proceed to name Brazil and Chile, poster boys for "good behaviour" because they never broke paths with the IMF. Coincidence? Don't think so!. (OK, I admit I might be wearing my tinfoil hat now).

Before you accuse me of irrational flag-waving, oldskool right-wing nationalism let me be 100% clear that it's not about this. I'm complaining from the economic policy angle. The failure of ANY major English language mainstream media reporting about the economic progress in the country, and the economic policy angle.

Perhaps the problem for the US and other western media is that portraying that Argentina is doing very well by NOT following the path preached by the right wing think tanks and the IMF would set a "bad example" for the rest of the countries still suffering the anvil's weight of the IMF and its laisez faire policies?.

Think about it... a government with a more progressive, demand side economics policy, that doesn't ask Milton Friedman for advice. A country who asks world famous IMF-critic and long time Washington Concensus skeptic Joseph Stiglitz for advice.

To top it all the results have been good, getting fiscal and commercial surpluses for the last 4 years -and more importantly, doing so for the first time in decades-. BUT, here's the surprise: reading the western English language media daily and seeing Argentina's good news virtually "blacklisted" (other than Reuters' quarter figures for the specialized economics media and speaking usually nothing about the human impact of this growth).

Why is this? I have a theory. I think it's because we pissed off a lot of Wall Street, AEI and right-wing economics technocrats followers of the supply side school, with our debt restructuring, -we paid the IMF and sent them packing-. Also, -now drifting into the political field- I suspect the lack of any good positive reporting is because we are doing good business with Venezuela and supporting projects like Stiglitz' praised REGIONAL INVESTMENT BANK.

That's my theory of why Argentina's good economic news and its social impact ended up blacklisted : due to political and ideological reasons, as it doesn't fit the wire editors' economic psyche.... in other words "nothing good should be said about it, because it didn't sign FTAA, bow to King George, or break relations with Venezuela's Chavez". Is that it?

Fifteen years ago when the country was going downhill and getting deeper and deeper into a cycle of debt yet Argentina was portrayed by the financial media as the poster boy of the IMF and magazines wasted pages and pages on the positive "reforms" that generated an influx of speculative capital (in other words, "mergers and acqusitions", that is capital changing hands, not very much NEW investment in production of real tangible goods and manufacturing) while the gates of cheap imports were opened and it de-industrialized the country sending unemployment through the roof... and culminating in the implosion of the economy when the facade fell....

Back to the news reporting angle: do you think I'm too far from the truth? Am I allucinating? Have you found English language news stories that talk about the revival of industry, the increase in manufacturing jobs,the increase of non-primary (industrial, manufacture, technology and services) exports in the last three years? Where? and when you find it, does it tie these events to the economic policy? or do they just mask it under the usual "it's a result of the increase of commodities prices?

If you find any story with that angle, PLEASE LET ME KNOW, because I've never seen all these elements together in a mainstream, English language story.

To end this long babbling, I have to wonder if perhaps all this is due to the fact that most americans DON'T KNOW DIDDLY SQUAT about Latin America as a recent Zogby Poll found?. Or is it because the American economists establishment has VERY LITTLE TOLERANCE towards dissent when it comes to the supply-side Dogma, as has been recently warned by the progressive U.S. economists?.

Just my $0.02 or $0.06 pesos. :-P

Thoughts, comments, expletives?

Food for thought:

U.S. Economists question dominance of Supply-Side Ideas

"Americans know very little about Latin America"

Tinker Bell, Pinochet, and the Fairy Tale of the Chile Miracle

Bank of the South: Toward Financial Autonomy -

Chileans praise Argentina's economic wisdom wrt .IT policy

There are the kind of stories NOT FOUND on mainstream US/western English language media*:

(*Spanish language stories, with titles translated by me):

AR: People receiving government unempolyment subsidies fell 50%
in the last 4 years

Spending by people with the lowest incomes grows in the farther/poorest BA city suburbs
LA NACION, Wed. 16/5/07

"The combination of union-management agreed salary increases for workers in the formal sector of the economy and the general drop in unemployment levels have begun to show results in the poorest areas of the greater Buenos Aires, which after the second semester of '2006 show consumer spending growth rates above the rest of the population"

Government launches tax reductions for tourism SMBs

Air traffic between USA and Argentina grows

Google opens regional HQ in Buenos Aires, will hire up to 3,000

Argentina's Tourism sector now brings more dollars than grains and meat exports combined

17/4/07: Argentina's government launches fiscal incentives for the local software industry

The latest boom: corporate software, made in Argentina

20/4/07 - Argentina's investment level the highest in the last 20 years

Argentina widens trade surplus with the US

Venezuela and Argentina duplicate its trade

"one of the most important aspects is the diversified nature of the current exports from Argentina to Venezuela. From (traditional products like) powder milk and meat to industrial goods like tractors, trucks, SUVs, pipes and valves for the oil industry, among others".

Consumer credit levels now above the historic highs before the crisis


Two notable exceptions to the "information black cloud": BusinessWeek (US) and the IHT (FR)... two lone positive stories, but one is very dated by now, and the other too short (imho).

Argentina: doint it their own way - 2006

Argentina: reversal of fortune (BusinessWeek) - 2002

The following, while good and positive spinned, are not from what I'd call "mainstream media", actually one is a progressive magazine's blogger and the other a little Italian news portal:

Argentina Heads Region's "Human Development" Index

Beat the Press: Argentina's strong growth among Most Important news of '06

Thoughts? comments? Expletives? ;)

1 comment:

yanqui mike said...

"Perhaps the problem for the US and other western media is that portraying that Argentina is doing very well by NOT following the path preached by the right wing think tanks and the IMF would set a "bad example" for the rest of the countries still suffering the anvil's weight of the IMF and its laisez faire policies?."