Latin America in the 1990s
Edited by Rob Vos, Lance Taylor and Ricardo Paes de Barros
Chapter 3: Argentina: macroeconomic behaviour, employment and income distribution in the 1990s*
3. Argentina: macroeconomic behaviour, employment and income distribution in the 1990s* Roberto Frenkel and Martín González Rozada 3.1 INTRODUCTION In the early 1990s, Argentina witnessed an impressive process of marketoriented reforms that focused on privatizing a large portion of state-owned companies and on liberalizing trade and capital ﬂows. At the same time, the country put an end to a period of extreme price instability, which produced two brief episodes of hyperinﬂation in 1989 and 1990. Price stabilization went hand in hand with a strong growth recovery. However, on the downside there was a severe increase of unemployment and inequality. Trade opening was a central component of the structural reforms of the 1990s. In 1988 some progress had been made in this direction, but the gradual approach was abandoned at the start of the new decade and the opening process accelerated. The average import tariff rate was reduced from 26.5 per cent in October 1989 to 9.7 per cent in April 1991. In addition, speciﬁc duties and quantitative restrictions on imports were eliminated.1 In addition, the privatization process started in 1990 with the transfer of the telephone company and the national airlines. In late 1994, most stateowned companies that produced goods or services had been sold, including the most important ones, i.e. the oil company, YPF, and electricity producers and distributors. This process covered a vast range of production areas, from iron and steel to petrochemicals and gas. In some cases – such as oil, trains, ports, highways,...
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