Monday, May 31, 2010

Brazil Becomes a Model for Argentina.

Brazil's O Estado de Sao Paulo has an interesting piece on the situation of Argentina in Latin-America. One hundred years ago Argentina strove to imitate Europe. Businessmen, politicians and opinion leaders argued that the style of government administration and business to follow was then the European one.

Argentina then wanted to join the Commmonweatth. In the 1930's Foreign Minister Julio Roca sparked controversy when he said that Argentina was "one of the British crown jewels." This idea of being linked to Europe by a kind of commercial and cultural umbilical cord persisted over nine decades and interspersed with admiration for the United States.

Brazil, during the 20th century, was initially regarded with contempt and then as an economic and political rival. But the crisis of 2001-2002 changed the Argentine models. The country stopped looking to the Old Continent and America as examples. Brazil is no longer seen as a rival and began to be evaluated as a regional leader and a new model. Many Argentines indicate that there is already a dependence relationship with Brazil.

One of the first to bring the image to the public was the businessman Franco Macri - a symbol of local capitalism in the '90s - that in 1995, said: "Soon, Argentina will become the State number 27 in Brazil." A month ago, Macri repeated the concept, but as fact: "Argentina is one province of Brazil."

In recent months, the growing weight of Brazil in the world, along with the expansion of Brazilian companies in Argentina, has caused that the model to follow now is the Brazilian. Newspapers, magazines and TV programs in Buenos Aires devote large space to the "success" of Brazil.

In 1910, GDP was twice that of Argentina in Brazil. But in 2010 the Argentine GDP is one fifth of the Brazilian.

The Argentine woes have widened since 1975, when it began a series of six heavy economic crises, accompanied by political turmoil that led to the passage of 16 presidents (Brazil has had seven presidents in that period). In addition to leakage of foreign exchange, Argentina suffered an exodus of professionals that has undermined the country's technical capacity.

However, despite the crisis, the country can maintain a high HDI (human development index, which measures the quality of life). The index is compiled by the United Nations Development Programme and shows that Argentina ranks number 49 among 180 countries, the second in Latin America, behind Chile (in world rankings, Brazil is at 75th) .

But, when the index began to be developed 20 years ago, Argentina was 38th.

Former deputy economy minister Orlando Ferreres said that unlike Brazil, Argentina "lacked long-term strategies." According to the economist, therefore the country is experiencing a scenario in which even the meat - the national symbol - has a growing presence in Brazil, "Argentine refrigerators are bought by Brazilian companies, with support from BNDES, an organization which we envy, without similar in Argentina"

President Cristina Kirchner also claimed last week to have "better relationships with Brazilian businessmen investing in Argentina than with the actual industrial Argentines." In the speech launching the campaign in 2007, Cristina Kirchner cited a single company - Embraer - as a model to be imitated.

Brazilian products.

Products "made in Brazil" are already part of everyday life in Argentina, and resist any attempt to boycott. Throughout the decade, on several occasions, unions and business associations have tried to unleash campaigns against Brazilian products. All failed.

A citizen of Buenos Aires can wake up in the morning, wash his or her face and dry it with a Coteminas towel, produced in the province of Santiago del Estero. Then you can wear jeans (70% of Argentine denim is in the hands of Brazilian companies) and put one foot in footwear produced by the Brazilian industry in Chivilcoy Paqueta. Further, when leaving home in a car, he or she would fuel up at a Petrobras gas station. Lunchtime would be in a restaurant built with cement from Loma Negra (bought by Camargo Correa), enjoying a steak from one of many Brazilian slaughterhouses - including Friboi and Marfrig - which in recent years acquired companies in Argentina.

At checkout, they can pay with a debit card from bank Itaú (ITUB in NewYork).

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