this is Argentina a 100 years ago it was one of the wealthiest places on the planet and a country so economically powerful and advanced that it was widely expected to become an economic rival of the United States but then something went wrong in Argentina started a long economic downfall that has been getting worse and worse ever since its past 100 years is a tale of nine bankruptcies hyperinflation and constant economic crisis and today Argentina is coming close to the edge of an economic collapse once again but how does a country go from an economic giant
to a laughing stop why is it stuck in a NeverEnding crisis and can it ever get out this is Argentina's Fall From [Music] Grace while this is now mostly forgotten a 100 years ago Argentina was a true economic Powerhouse at its PE in the late 1920s it was one of the fastest growing economies in the the world for five straight decades it had a GDP per capita on a similar level as France or Canada and it was one of the main Global destinations for Investments and immigration and it was also widely seen as the next
economic superpower that found the secret to an explosive growth and that will be competing for dominance over the continent with the United States the foundation of its success was in agriculture thanks to having one of the most fertile regions on the planet the Pampas Argentina was able to turn itself into a global bread basket and at a time when the world was hungry for Commodities and paying a high price for them Argentina was happy to provide and while Commodities were flowing out people were flowing in in its quest for economic development Argentina decided to turn
itself into the most pro-immigration country in the world and so it opened its borders to literally everyone and even offered to pay people for their Journey to the country and because it had it booming economy business-friendly policies and higher wages than most of Europe This resulted into the great European immigration wave to Argentina when millions of Europeans from Italy Spain Portugal and other countries decided to start their new lives in the new world from 1870 to 1914 Argentina's population quadrupled and its economy benefited from workers farmers and businessmen that were arriving in the country buenos
Ires was nicknamed as Paris of South America for being the continent's cultural capital and Argentina became famous as sort of an equivalent to the United States a booming economy open to immigrants and full of opportunity where anyone could make a fortune and build a new life for themselves in the early 20th century the hype around Argentina's success was at its peak it was the place where things were happening where if you invested it was impossible to not make a profit and where a new economic Giant and was just being born together with a strategic geographic
location and vast resources including natural gas gold and oil the Argentinian dream was in a full swing and the future looked bright but that bright future never came Argentina never became the economic superpower that it was supposed to turn into and instead it's an economy that's constantly falling apart and fighting for Bare survival so what went wrong well the explanation is that AR Ina or rather its leaders have a history of making terrible decisions that have brought the country from the very top all the way down to the Rock Bottom so this is what happened
the fact is that the foundation of its success was not very healthy from the start like the United States Argentina had a large territory suitable for agriculture that it was forcibly taking away from native inhabitants and giving it to settlers who were supposed to turn it into formable land but unlike the US where the land was distributed among a large number of independent Farmers the government of Argentina sold off the land to a small circle of already wealthy farmers and ranchers this economic Elite was making a lot of money but because they had no competition
they didn't feel the need to innovate or expand and so Argentina never really developed any other sectors of the economy when the Great Depression hit in the 1930s and Global demand dropped it had nothing else to lean on and meanwhile the world was quickly changing and it was now industry that was making Nations rich not agriculture anymore but Argentina was relying on its agriculture for so long that it didn't really have anything else and it quickly started to fall behind and to make matters worse in the 1940s a military coup gave Argentina a new leader
Juan Domingo Peron who had a completely different idea of how to fix the economy taking inspiration from both fascism and socialism piran believe that Argentina's problem is that it's too involved in the global economy that it's exporting too much and that it has too much foreign capital and his solution was to make Argentina completely economically self-sufficient by effectively cutting itself off from the rest of the world and so while the world economy was going through its golden age of the post-war economic boom driven by unprecedented globalization Argentina was going in the ex exact opposite direction
closing off imposing tariffs restricting its export driving foreign investors out of the country and nationalizing entire sectors of the economy and even though pan himself was ousted by another military coup in the 50s his ideology didn't go anywhere and that included extremely generous welfare and social subsidies for the poor and the middle class which did have its benefits under Pon Argentina's working class had the highest salaries in the whole of Latin America but the degrading economy could never provide enough money to cover for all of the welfare spending and in order to pay for it
Argentina started to borrow more and more money on one hand and printing more money on the other one which as a result was increasingly driving the inflation devaluing the currency and growing the national debt and as the economy was starting to fall apart Argentina was going through an endless cycle of political instability and constantly changing regimes governments presidents and economic ministers who were all however equally incompetent at handling the country's finances by the early 1980s the economic situation was increasingly unsustainable and to divert attention away from it the military dictatorship that was in power at
the time launched a disastrous invasion of the Faulkland in 1982 which soon after it failed led to the fall of the regime bankruptcy of the economy and a lost decade of econ economic stagnation the thing is that even though Argentina's leaders had dozens of opportunities over the decades to change the direction of the country in the end Argentina never learns from its mistakes and always ends up doing exactly the same thing all over again or as a saying goes Argentina never misses an opportunity to miss an opportunity in 1989 the last decade of Argentina's economic
problems was finished with a spectacular wave of hyper inflation that wiped the entire Savings of most of the nation and sparked riots across the country as people who couldn't afford food anymore were looting the supermarkets to stop the inflation a new president decided for a new strategy to stabilize the falling currency by linking the Argentine peso to the rate of the US dollar and for a while it worked but while this move stabilized the currency it also meant that Argentina wasn't able to just print money to fund its own spending anymore which was always one
of the main ways for any Argentinian government how to fund its budget without this possibility and in order for the new strategy to work the country now had to earn the money instead of just printing them and drastically reduce spending in other words Argentina had to stop acting like Argentina but once again it just couldn't help it and so it went on another spending spree that the economy couldn't afford this time financed by borrowing the money from foreign investors and the IMF but when the global economy slowed down and the money dried out Argentina hid
the wall and after it lost access to further funding from the IMF it went through the largest government bankruptcy in history and a new series of riots sparked by the anger at the complete mismanagement and incompetence of the government since then Argentina has had 20 years of ups and downs downs but at the end of the day the economy is facing the same problems all over again the government still keeps spending more money than it can afford it's printing money to fund its spending and devaluing the currency and driving the inflation higher and higher as
a result today the inflation is reaching over 100% after growing for the past 5 years and the economy is once again coming close to the edge of collapse and so Argentina is still making the same bad decisions that lead to exactly the same results and keep it stuck in the same Perpetual forever crisis
