Argentinian Financial Crisis Essay Example | Topics and Well Written Essays - 2000 words

Argentinian Financial Crisis - Essay ExampleThree years after the fiasco, genus Argentinas economy is growing steadily. The product is still under 10%, but there is growth and a growing sense of safety and responsibility from the governing, creating a very positive lookout station for Argentina to emerge in years to come as a dominant presence in Latin America.Globalization is a series of associate that a country has with foreign countries. Globalization in essence links a countrys economy to other economies so that there is a web of mutuality throughout all linked economies thereby creating a global economy.In a recent report in Latin Business Chronicle (LBC), Argentina was ranked as the least-globalise country in Latin America (Bamrud, 2005). LBC utilized 6 factors to measure each countrys level of globalization. These factors includedThis is an meaningant Index that LBC created in that it allows investors, and other interested parties an opportunity to view Argentina in an e xtremely objective light. Remittances, money sent back home by family members working abroad, is an champaign that is steadily growing for Argentina. A report prepared by the American Immigration Law Foundation (AILF) states, remittances area sign of family values, a part of man nature. They are a form of helping ones family. Remittances increase both the income of the recipient and the foreign exchange reserves of the recipients country. If remittances are invested, they contribute to output growth, and if they are consumed, thus also they generate positive multiplier effects, notes economist, Dilip Ratha in Global Development Finance 2003, a World Bank publication (Role of Remittances, 2003).By utilize this 6-step process to cull globalization indexes, one can get a larger view of the financial status of Argentina. LBC report states that Argentina has the lowest import rates in Latin America, it has a low export rate, foreign investment is low (1.2% of GDP) and it has one of t he lowest remittance rates in the piece as well. Even tourism levels are down (Bamrud, 2005). While Argentina is not facing imminent meltdown, it is still toddling its way back from its financial happening 3 years ago.However, its economy is rallying. According to the U.S. Department of States website, Argentina had an annual real growth rate of +9% in 2004, and their GDP stands at $150.0 billion. To ease off a bit more background, globalization is supposed to help keep countries in line and disciplined because if they have solid economic practices, the assumption is that government will be favoured by foreign investment. If the government does not practice sound economic policies, the reverse is supposed to be true - monies will both not be invested, or will be pulled from that country (Blustein, 2003). This did not happen in Argentina in the years leading up to the crisis, in fact, due to inflated expectations and selective reporting of the countrys true financial state, globa lization helped to create the massive Argentine downfall.II. What Happened