Surprise, surprise! In the 2003 Human Development Report, just two years after the crisis, Argentina was ranked the highest in the Human Development Index (HDI) in the whole of Latin America, 23 notches above Malaysia and 38 notches above Thailand. Ranked 34 among 175 countries, Argentina is way above the Philippines whose rank was 85. The lesson here is that sweeping generalizations are dangerous in assessing the economic performances of countries in a very dynamic global environment. Beware of remarks like "the Philippines may end up like an Argentina." If recent facts are considered, such a statement may actually be more of a compliment rather than a dire warning!
The story of Argentina in the last five years should serve as a stimulus and encouragement to our leaders to address with greater political will our own fiscal and debt crises. Let me quote from an address of Argentine President Nestor Kirchner to the 60th United Nations General Assembly:
"With great effort, Argentina is managing to return to the path of development and has achieved an important and sustained growth in its economy, while at the same time has succeeded in significantly reducing unemployment, poverty and destitution indexes.
"After coming out from the crisis, indicators show a sustained growth in the economy and a surplus situation in the fiscal and external accounts, together with the recovery in national reserves.
"Argentina has grown 8.8% in 2003, 9% in 2004 and over 9% during the first semester of 2005.
"The consolidated primary surplus is 5% of the GDP and the reserves have increased from nearly 10 billion dollars to over 25 billion. Exports this year will exceed 40 billion dollars, with an estimated growth of about 15%.
"The labor market shows a declining trend in unemployment, paired with a recovery in salary levels, a pointed improvement in the social situation and a clear decline in the poverty and destitution rates.
"Unemployment has dropped from 24% in 2003 to 12.1 over the first semester of 2005. Poverty rates have dropped, from 57.5 to 40.2, and destitution rates have come down from 27.5 in 2003 to 15% 2004 and continue to decline. The improvement in salary levels in the real general salary index has reached 16%.
"Since overcoming default, Argentina is consolidating as an opportunity for foreign investment.
"The primary education enrolment and the number of students starting the first grade are over 91.5% and 86.9%, the illiterate population is below 3%, and women’s literacy rates are over 97.4%
"Women’s participation is growing, as a result women hold over 33% of seats at the House of Representatives and 43% of the seats at the Senate.
"The infant mortality rates have dropped significantly, from 16.8 per 1000 to the current 13 per 1000.
"Public health programs are implemented that extend prevention to the whole of the population, drinking water supply and sewage systems are being increased, and through an agreement with Brazil, medicines shall be produced in order to cover the population infected with AIDS at an affordable price."
Last September 15, 2005, Mr. Rafael Bielsa, Minister of Foreign Affairs, International Trade and Worship of the Argentine Republic, also delivered an address to the United Nations General Assembly bringing out important issues that are very relevant to the efforts of our own Speaker Jose de Venecia to convert a part of our foreign debt into equity participation in projects that can directly address poverty eradication in the Philippines. Mr. Bielsa rightly criticized some developed countries and international agencies for lack of consistency in their trade policies: "It is very significant and contradictory that those countries that strongly insist on the benefits of free trade are also the same countries that protect and subsidize their production, specially agriculture, affecting trade from the developing countries or small economies, and in particular landlocked countries.
"Unsustainable foreign debt works against the Millennium Goals. Many Latin American countries have made significant progress towards solving this scourge.
"In this regard, we are working on our proposals and programs that would transform foreign debt into education, which will help many children to progress in life.
"We are also promoting a reformulation of fiscal accounting within countries and multilateral lending bodies, so that productive investment in infrastructure is not counted as ordinary expenditure when measuring primary surplus.
"This is a short account of those circumstances that affect our countries and do not allow them to implement policies that would promote productive investment in infrastructure, that traditionally creates employment, or directed into our sanitary infrastructure or education facilities."
I hope that Argentina’s herculean efforts to lift itself with its bootstraps will convince international lenders to be more reasonable in making demands on the highly indebted nations. As Mr. Bielsa ends his speech: "To create work to alleviate poverty and strengthen democratic government in the least developing countries is beneficial both for developed countries, since social instability and degradation of the environment will increase illegal immigration, hampering global stability." For comments, my email is bvillegas@uap.edu.ph. .
