Argentina - Current economic position and prospects

RETURN TO SE ORTEEXCLUSIVERSRCE REPORTS STRICTED WITHS D1 OF THE GOVERNMENT OF Report No. WH-204b WITH IN I06F 8 ONE ------- This report is for official use only by the Bank Group and specifically authorized organizations or persons. It mnay not be published. quoted or cited without Bank Group ar orization. The Bank Group does not accept responsibilty for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION CURRENT ECONOMIC POSITION AND PROSPECTS OF ARGENTINA June 18, 1971 South America Department  CURRENCY EQUIVALENTS Currency Unit = New Pesos ($a ) US$1 = $a 4.20 US$1 million $a 4.20 million $a 1 million US$238,905 Throughout this report an exchange rate of $a 3.50 US$1 (which was the prevailing rate in 1969) was used for purposes of expressing data in constant prices.  TABLE OF CONTENTS Page MAP BASIC DATA SUMMARY AND CONCLUSIONS I. RECENT TRENDS: STABILIZATION AND GROWTH 1 Stabilization Effort 1967-69 1 Economic Problems of 1970 2 Economic Budget for 1971 and Financial Reform 4 II. DEVELOPMENT PROBLEMS AND STRATEGY 7 Agricultural Policy 7 Industrial Policy 9 Public Finances and Inflation 12 Balance of Payments 13 Development Strategy 13 III. SECTORAL ISSUES AND PROGRAMS 17 Agriculture 17 Industry 23 Electricity 28 Fuels 31 Transportation 32 Communications 37 Water and Sanitation 38 Education and Housing 40 Conclusions 42 IV. FINANCING OF PUBLIC INVESTMENT PROGRAM 43 Public Finances 43 Tax Administration 45 Finances of State Economic Enterprises 45 Financing of Public Investment 46 Revenue Prospect 3 46 Current Expenditures 48 Public Sector Savings 49 Financing Plan 50  TABLE OF CONTENTS (Continued) Page V. BALANCE OF PAYMENTS 55 Past Experience 55 Current Account 55 Exports 55 Imports 57 Capital Account 58 Prospects 59 Export Growth 59 Import Requirements 60 Current Account Gap fs2 External Capital Requirements 62 External Debt Management 64 External Capital Requirements and Growth 65 APPENDIX: The Beef Problem, 1970/71 and Outlook STATISTICAL APPENDIX This report is based on the findings of an economic mission to Argentina in April/June 1970 composed of Messrs. Murray Ross (Chief of Mission) and Harold Pilvin (Deputy Chief of Mission), Professor Geoffrey Maynard (Eco- nomist - Consultant), Professor William Vickrey (Urban Planning Economist - Consultant), Messrs. Nicholas G. Carter (Quantitative Planning Economist), Carlos Quijano (Economist), Arthur H. Whitfield (Public Finances - Consultant), Frants Sporon-Fiedler (Investment Program Coordinator), Syed A. Moini (Invest- ment Program Adviser), Lorne T. Sonley (Agricultural Economist), D.N.S. Evans (Agricultural Credit - Consultant), Neil T. Houston (Transport Economist - Consultant), Alexander Nowicki (Industrial Economist), Antonio S. Tarnawiecki (Industrial Policy Specialist), Thomas Berrie (Power Economist), Huro Yamaoka (Assistant Power Economist), John H. Hurlebaus (Sanitation Economist), Rafael Sandoval (Sanitary Engineer - Consultant), Giulio Fossi (Planning Specialist), Mrs. Nubia L. Halaby (Mission Secretary), Mrs. Iris A. Patty (Mission Secretary). Miss Elinor Yudin and Mr. Surinder Malik contributed to the preparation of the report. Updating missions visited Argentina in December 1970 and January 1971.  j 1 4 ~~~~J U J UYv Pnb'Cin t < V~~~ JUU Coopoor 4' ,, -D41 J ~~~ ho'~~~~A 0~~~~~~ {J ~ ~ ~ ~ ~ ~ ~ * / 1s-\< eE tet 1-~--~j / J ,2_ < y Cotomlrco ES\tER. / Ntf COR IE TE :}~~~~ 4_ / GR