A high tide doesn’t necessarily raise all ships. Perhaps the most drastic sovereign business example of this is South America.
Though Brazil has been one of the drivers of the world economy for a few years, Colombia is enjoying a resurgence and the benefits of a new free trade agreement with the United States, and countries like Chile are feeling a boost from strength in industries ranging from raw materials to wine production, while Argentina has become a proverbial whipping post. All was fully on display at the G20 Summit in Mexico.
Argentina took several shots this week, not the least of concern was over the Falkland Islands row with the UK. A number of nations including Spain, Germany and the UK have called for sanctions against Argentina for its perceived lack of adherence to economic and legal commitments. The U.S. Congress even drafted a Congressional Resolution asking for the nation’s removal from the G20 unless it starts meeting demands.
Meanwhile, in a move also pointed at Argentina, along with South Africa and Brazil, a majority of the G20 voted to extend a pact barring the establishment of new trade barriers through 2014. Argentina has been seen as one of the nations most prone to protectionist policies that, in theory, members of the G20 have vowed to avoid.
At the 2012 Credit Congress in Texas, NACM Economists Chris Kuehl, PhD noted that Argentina has fallen so far it’s now considered in similar low ilk comparable to nations like Venezuela and Ecuador.
- Brian Shappell, CBA, NACM staff writer