Globalization And Trade Economy

The effects of globalization are especially pronounced in Argentina. Strangely enough, a Latin American poll found that 80% of the people in neighboring Chile saw the effect of globalization to be overwhelmingly positive, while 70% of Argentineans felt globalization had a negative effect on their country. In the 1990s, Argentina was the poster child of the benefits of globalization, seeing unprecedented economic growth and stability, as well as a healthy middle class populace. Real GDP growth reached 8.1% in 1997. Technological imports rose, energy development occurred, skilled labor jobs for middle class workers increased. In fact, the middle class rivaled European nations, with most workers able to afford nice cars and houses during the economic boom years. Prosperity and globalization seemed undeniably linked.

However, a financial crisis in 2001 plunged the nation into severe debt, 20% unemployment, frozen bank accounts, a declining peso, a presidency that changed hands five times and widespread public discontent. Part of the crisis was triggered when one of Argentina's biggest trading partners, Brazil, devalued its currency. Author Ben Blackwell wrote an article called "Cooking-pot Revolution," where he described the situation as follows: "When the Argentinean economy collapsed, the country's fat cats and bankrupt politicians melted into the woodwork, leaving the workers of Argentina to sort out the mess."

We've seen in this instance that globalization and the dependency on foreign economies is not always a guarantee for success. One student from Argentina told The Levin Institute, "Policymakers have also begun to recognize errors in the design and implementation of the neo-liberal policies. International organizations, particularly the IMF, which highly conditioned its assistance to Argentina, were criticized for their role in the debacle. Normal Argentine citizens may associate organizations such as the IMF and the World Bank with the pro globalization camp, and this criticism could therefore be seen as an indirect expression of discontent with globalization."

While Argentina has bounced back considerably over the past few years, the storm is far from over. Corruption and stagnant World Trade Organization proceedings prevent a cohesive trade strategy from being implemented in Latin America. In addition, trade barriers and rising swells of populism threaten globalization and free market economy in the country as well.