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July 15, 2008


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"Which is brutal. They're only 3.4% of the population, but far more people depend on them for their livelihoods."

Do questions of national identity, i.e. Argentina as a nation of farmers and ranchers, enter into the affair at all? It seems like a tack that opponents of Kirchner could take.

As for the piqueteros, wow. I'm more familiar with Naomi Klein's depiction of them.

The urban-rural split in Argentina runs deep, but I won't discuss why until an Argentine chimes in.

You know who you are!

I think that a lot of people who read only Naomi Klein --- not yourself, but some readers of your blog --- would do well to take a look at the news from Argentina. I'll try to keep up some English commentary here.

Argentina really is my favorite country. Buenos Aires needs to be experienced to be understood.

So, the Argentine chimes in. So much to say, so little time (and space). As much as I like my country's originality on tackling economic issues, high tariffs in the 19th century were very common in Latin America. It was the main source of revenue for the nascent countries. (Check Clemens and Williamson on this topic, also known as the tariff-growth paradox.)

In terms of class divisions, the roots are
indeed historical. The agricultural sector has always been the engine of the Argentine economy. Its dynamism was in line with the external markets and the domestic policies. The latter significantly reduced the profitability of the sector at times (see the IAPI example on the main post).

Right now, the question is how much "surplus" the government can extract from this sector. It has reached confiscatory levels (in March export taxes were 35% and now -taking into account the moving average withholding- is around 49.5%). The political game (as I read it with info coming from my Argentine friends) can be framed the following way: tax the agricultural sector as much as possible and then grant subsidies to friends and allies.

The latest news are that the Senate turned down the moving withholding tax project (la 125) last night at 4:30am by one vote. I have no idea what is going to happen as the government was ready to celebrate and the farmers were planning to appeal to the Supreme Court.

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