Developmentalist Economic Plan Arturo Frondizi

economist rogelio julio frigerio, closest adviser, promoted record local , foreign investment in energy , industry, helping argentina become self-sufficient in both.




arturo frondizi presidential speech in 1958. topic: economic , development plan. source: national public radio argentina (in spanish).

frondizi sought strengthen economy solving main economic problems had haunted argentina on last twenty years. these included insufficiency in oil production (60% of oil had imported , 80% of oil used generate electricity), inadequate steel production, lack of electricity, , insufficiency , obsolescence of transport (especially railways). had inherited economic problems perón s 1946-55 administration, characterized budget deficits because of huge railroad subsidies during period. these subsidies cost treasury million dollars day.

in addition, peron had used of us$1.7 billion in budget reserves @ time of election nationalise various private railway companies buying them french , british interests. nationalized companies modernized , expanded. critics resulted in many employees , bloated payrolls have since strained national budgets.

conservative economy minister Álvaro alsogaray opposed developmentalism; appointed placate military.

frondizi assigned economist rogelio julio frigerio develop bold plan make argentina self-sufficient in motor vehicles , petroleum, extend country s semi-developed road , electric networks. (in 1950s, these served less half population, , fewer 20% in poorer north). frondizi s economic vision radical departure nationalist 1 of perón. achieve greater investment in industrial development, frigerio supported passage of law of foreign investment. provided foreign corporations incentives similar offered local ones. created department , commission of foreign investments, designed give foreign investors more legal recourse when operating in country.

frigerio called expansion of public lending homebuilders , local industry, related public works. such measures gained him broad support argentina s large middle class. foreign direct investment, though concentrated in oil , auto sectors, extended appliance manufacturing, , other industries. of total invested in argentina between 1912 , 1975, 23% took place during frondizi s 4 years. in 1962, argentina richer in terms of gdp per capita austria, italy, japan , former colonial master spain.

some of initiatives opposed military, upper echelons included men argentina s old agricultural elites. (many ultraconservative , had well-documented racist, anti-semitic attitudes , fascist ties). generals insisted appoint Álvaro alsogaray, defense contractor, economic office.

alsogaray forced austerity shock treatment on president in december 1958. required sharply devaluing currency, curtailing lending programs, reducing subsidies , other social programs. alsogaray appeared on tv and, armed economic pie charts, declared argentines must go through winter.

a local kaiser motors ad in 1962. auto production rose fivefold in frondizi years

as result, consumer prices doubled in less year (the country had been used 20-30% rate of increase). real wages , business investment fell 20%. 1959 recession allowed frondizi marginalize alsogaray in favor of rogelio frigerio, , former resigned. frigerio revived suffering loan, public works , social programs. benefitting earlier measures, automakers (most of whom subsidiaries of u.s. , european firms partnered argentine investors) primed production 30,000 units in 1958 (60% of market) 137,000 1961. argentina achieved self-sufficiency in auto production. tractor output increased 10,000 25,000 annually, , added mechanization of agriculture contributed marked rise in commodity crop exports after 1961. subsidiaries of european , u.s. automakers joined local startups, notably siam di tella, benefited increased public credit availability.

steel production prioritized. state enterprise, somisa, established in july 1960, completing steel mill in san nicolás de los arroyos. steel production tripled 700,000 tons (40% of local market), , production of pig iron, 30,000 400,000 tons. segment of gdp tied industrial growth, capital goods investment (cgi), grew substantially during frondizi s tenure. while overall economy grew 8% 1958 1961 (frondizi s last full year in office), cgi doubled in real value.

petroleum

frondizi s development of argentina s sizable petroleum reserves used foster nationalism among voters strengthen economy. when frondizi came office in 1958, oil production had not grown since abusive standard oil forced out in 1930s. argentina relied more on motor vehicles, oil imports drained country in foreign exchange. how achieve increased oil production contentious issue 1940s. ucr (radical civic union) favoured state monopoly, believing necessary control oil reserves. in declaration of avellaneda (a common platform supported balbin s ucrp—his wing of ucr—and frondizi s ucri), state s need invest in oil exploration , make argentina self-sufficient in short term expressed policy.

based on declaration s goals, frondizi justified encouraging foreign investment. issue hotly debated within administration, , reportedly resulted in resignation of vice president, alejandro gómez, in late 1958.

frondizi encouraged foreign investment in sectors had created chronic trade deficits between 1949 , 1962. 90% of foreign investment during term went oil exploration, oil refineries, auto industry, steel, , household durables. ten of 25 largest projects exploration of new oil fields. record public investment in petrochemical sector led fivefold increase in synthetic rubber production; 1962, production of crude oil tripled 16 million cubic meters. achieving self-sufficiency in oil freed hundreds of millions of dollars in annual import costs argentina. helped create 13 years of uninterrupted economic growth, particularly in industry.

infrastructure

infrastructure had been object of growing public investment since 1920; but, argentina s educational , health network had grown extensive ones in latin america, road network , public transport had changed little since 1940s. although managed breathe new life important highway projects, frondizi administration accomplished less had set out to.

the administration not finance such projects alone. frondizi s plan called on combination of foreign , state investment. administration gave priority developing electrical power , directed then-record resources hydroelectric dams. 2 main hydroelectric dams in discussion el chocón, near border chile, , salto grande, on border uruguay. feasibility studies both these projects had been done in yrigoyen s first presidency (1916–22) never authorized government.

the projects intended meet increasing demand electricity, , decrease reliance on oil-powered generators. frequent power outages in buenos aires metro area eased establishment of segba. work began on initiating regional power grid integration chile , uruguay. although none of these projects entirely finished during frondizi s presidency, both completed. administration initiated construction , had developed necessary diplomatic framework chile , uruguay.

as administration prioritized growth in auto industry, did not invest in public transport. since 1947, rail transport in argentina had been operated state-owned ferrocarriles argentinos. although there investment in standardizing several rail gauges, service continued deteriorate. no new subway or train stations built or improved.

when frondizi implemented proposed world bank project endorsed alsogaray, entailed closure of third of nation s 47,000 km (29,000 mi) of track, disposal of 70,000 train cars/wagons, , laying off many workers. (this resulted in six-week strike in critical sector in 1961.)

highrises in mar del plata dating frondizi era, when modern architecture came vogue locally

he promoted growth in nation s air travel sector, , 10 new regional airports built during brief presidency. growth in auto industry encouraged paving of 10,000 km (6,300 mi) of intercity roadways.