Southern Cone Under the

British

Economy

Argentina and Uruguay are by far the most economically developed countries in all of Latin America, within Auchmuty-Whitelocke World (AWW); they command between 1/4 and 1/3 of the total gross domestic product (GDP) in Latin America. Argentina has a total GDP of nearly US$850,000,000,000; Uruguay’s is over US$90,000,000,000. Only Brazil and Mexico rival Argentina in terms of total GDP for Latin America; Mexico’s is half that of Argentina’s, and Brazil has appreciably more.

Having the highest standards of living in the region, they also have the highest per capita incomes – Argentina’s was US$23,697 in 1999, and Uruguay’s then was US$17,061. That is a sharp contrast to those of Chile (~US$9000) and Brazil (~US$6000), for example, and certainly those of Paraguay (~US$3000), Bolivia (~US$1500), and Peru (~US$4000). Compared to these countries in our world, Chile has twice the per-capita income, and Brazil has 1.33 times as much; Paraguay, Bolivia, and Peru also have appreciably higher per-capita incomes than in our world.

Many companies in Argentina carry the “Pty. Ltd.” (or "Pta. Ltda." in Spanish) label at the end of each company’s name; many other times, it is simply "Ltd." (or "Ltda." in Spanish). In Uruguay, it is also simply "Ltd." (or "Ltda." in Spanish).

Currency

In AWW Argentina, the currency since 1956 has been the peso (informally known as the dollar, and symbolized by “$”), having replaced the Argentine pound. The peso is divided into 100 cents (in Spanish, centavos), symbolized largely by “c” and not so much “¢”. In Uruguay, the currency was the Uruguayan pound until 1967, when it was replaced by the Uruguayan dollar that is now used. (In Spanish, it is called the peso, though the American dollar is called the dólar.) The Uruguayan dollar is divided into 100 cents (in Spanish, centavos); like in Argentina, it is mostly symbolized with a “c”. The mints in the two countries are the Argentine Mint and the Uruguayan Mint – in Spanish, known as the Casa de Moneda de Argentina and the Casa de Moneda de Uruguay, respectively.

Agriculture and Industry

The agricultural sector provides only 3% of the Argentine GDP and 7% of the Uruguayan GDP; the manufacturing sector accounts for, respectively, 28% and 20% of the two countries’ GDPs; and services provide the rest. Of the Argentine labour force, 5% work in agriculture, 20% work in industry, and 75% are in services; Uruguay’s figures are 8%, 19%, and 73%, respectively.

The most outstanding parts of the agricultural sector, of course, are wheat-growing and livestock ranching, which primarily take place in the Pampas. These serve both domestic and international markets. Other subsectors of agriculture include fruit-growing (apples and pears near where the Andes, Pampas, and Patagonia meet – especially in the Black River Valley; oranges in parts of South Mesopotamia), vineyards (mostly in the Cuyo), yerba maté (in North Mesopotamia and Missions), and corn and flax along the lower Parana River (around Rosario and Santa Fe). The main sectors in Patagonia and Fireland (in Spanish: Tierra del Fuego), plus the Falklands, are sheep ranching and fishing. In Uruguay, crops are grown mostly along the eastern bank of the Uruguay River and along the coast; ranching is the rule in the interior. Grape cultivation for wine has long been big business in Argentina, especially in the Cuyo, and wine from there has been exported around the world and has been competitive with many international wines; Uruguay has started to raise its profile on the international wine map.

Oil and gas extraction takes place largely in southern Chubut, northern Santa Cruz, and the Falklands, with some in southern Cuyo, in Neuquen province, and in Salta province. The largest oil company in Argentina is Fiscal Petroleum Fields (or Yacimientos Petrolíferos Fiscales in Spanish), and there is also a number of independent oil companies, like Argentine Energy (or Enar in Spanish). There are minerals mostly in the Andes (including aluminum, lead, and copper), with some low-grade coal in southern Patagonia. The country also has a lot of hydroelectric resources. Uruguay, for its part, has very few mineral resources, except perhaps bauxite; it has a lot of hydroelectric dams, though. Its state-owned oil company is called the National Combustible, Alcohol, and Portland Administration or NCAPA (or ANCAP in Spanish).

There is plenty of industry going on in the two River Plate countries. Buenos Aires is the chief manufacturing centre in the region, though there is also substantial industrial activity in centres such as Montevideo, Rosario, and Cordova. While Buenos Aires and Montevideo are generalists and are the chief industrial centres of their respective countries, many other places specialize in a few things at most. For instance, Rosario has a tremendous iron-and-steel industry, along with oil refineries and agricultural processing plants. Cordova is the Argentine leader in motor vehicle and aircraft manufacturing, and also manufactures agricultural machinery. Since the Parana River is navigable to oceangoing craft up to Rosario, ports include Rosario as well as Plate City (also home to oil refineries) and the mighty Port of Buenos Aires. Another major port for outgoing agricultural products is White Bay, in southern Plate Province.

There are plenty of aircraft manufacturers in Argentina; the leading civil aircraft manufacturer is Boero Air, based in the city of Cordova but founded in Morteros (in far eastern Cordova province). For military aircraft such as the Guarani and the Pampa, it is Fabrica Militar de Aviones (FMA; bought by Lockheed Martin in the 1990s, and also based in Cordova City). Boero Air is a rival of such eminent companies as Bombardier, Boeing, and Airbus; FMA has competed with the world’s best military aircraft makers. The automobile industry is also quite vibrant; it includes foreign automakers like Volkswagen, Ford, Renault, and Kaiser (the latter still existing only in South America as Kaiser Argentina, itself a subsidiary of Renault nowadays), along with the Argentine-born Furley line of cars, now a subsidiary of Ford. Many of the cars are exported, particularly to Brazil. As for train manufacturing, the leading company is Materfer (Material Ferroviario Ltd.); it can almost compete with world-class manufacturers like Bombardier and Siemens.

High-tech industries are thriving in the Tandil area of Plate Province, in Cordova, in Wilsonton, and in Montevideo, as well as in Buenos Aires. Uruguay exports a lot of information technology products at a higher proportion of total exports than Argentina. Furthermore, Argentina’s space program is called the National Space Activities Commission (NSAC - or CONAE in Spanish), and was founded in 1991; it replaced another such program founded in 1960. NSAC is the most advanced space program in Latin America along with that of Brazil. Uruguay does not have a space program of its own, but shares space activities with Argentina, and for that matter countries like Brazil.

Services

     Service industries dominate the economies of the two countries nowadays. They include everything from hospitality management to financial services, and from nursing to stores. While many kinds of services are widespread, certain others are relatively restricted. Among other things, financial services are largely concentrated in the bigger cities. In fact, Buenos Aires is not only the biggest financial centre in the Southern Cone, but in the entire Southern Hemisphere, in AWW. While there are regional stock markets such as those in Montevideo, Rosario, Cordova, and Mendoza, the Buenos Aires Stock Market dominates the Southern Cone, and indeed all of Latin America. (Sao Paulo, Brazil, is South America's second biggest financial centre, with Santiago, Chile, being third.) Buenos Aires is also the home of many headquarters for nationwide banks and things of that nature. In fact, Buenos Aires is the location of the Latin American regional headquarters for many multi-national corporations.

     There is a wide variety of banks in both Argentina and Uruguay. To begin with, the central banks are the Central Bank of Argentina and the Central Bank of Uruguay. As far as major regular banks are concerned, there are 6-7 main ones in Argentina, together known as the Big Six or the Big Seven. The seven banks are Nation Bank, Macro Bank, BOLSA (Bank of London and South America), Plate Province Bank, the Bank of New Lancashire, Good Ayre Bank, and River Plate Bank. Of these, Nation Bank's full name is the Argentine Nation Bank and it used to be government-owned, and BOLSA and its predecessors have always been active throughout South America as part of the past British economic influence there. Important minor banks include Cordova Bank, the Bank of Cuyo, Patagonia Bank, and the Bank of South Mesopotamia. In Uruguay, the two most important regular banks are the Bank of Uruguay and Commercial Bank.

     Credit unions or cooperative banks include Credicoop Bank in Argentina and SCCA (Savings and Credit Cooperatives Association) Bank in Uruguay. Furthermore, during the early 20th century in South America in general, the Anglo-South American Bank (ASAB) - and its predecessors in countries such as Brazil and Chile - was active; it was eventually absorbed into Lloyds Bank of Britain.

Both countries are much more wired than the rest of Latin America, and have more Internet hosts per capita – in these ways too, they are comparable to places like North America and Europe. The leading telecommunications companies in Argentina are Telecom Argentina (formerly the National Telecommunications Corporation, or NTC) and Bates Communications; these two companies were created in the wake of the dissolution of the NTC monopoly during privatization in the early 1990s. In Uruguay, it is the state-owned NTA (National Telecommunications Administration), in Spanish being ANTEL (Administración Nacional de Telecomunicaciones). Telephone country codes are +54 for Argentina and +598 for Uruguay, as in our world. The twist is that +500 is assigned to Aruba and not to the Falklands, since in AWW, the Falklands are a part of Argentina. The two countries’ respective postal organizations are Argentine Post and Uruguay Post.

Tourism has emerged in the last few decades to be among the most important service sectors. The main tourist destinations within Argentina include Buenos Aires, beach resorts like Platesea, various parts of the Andes, Patagonia, Fireland (the last three for various outdoor activities), and Iguassu Falls. Uruguay’s principal destination is the beach resort of East Point, especially for Argentines and Brazilians with lots of money. In both countries, tourists come largely from within South America, though some visit from North America, Europe, Japan, and elsewhere.

Argentine Airlines (Aerolíneas Argentinas in Spanish) is the main air carrier for Argentina, while Uruguay’s is First Air Navigation Lines of Uruguay or FANLU (PLUNA in Spanish). Domestic airlines include Austral Airlines (Austral Líneas Aereas in Spanish) in Argentina and Air Uruguay (Aero Uruguay in Spanish) in Uruguay. A low-cost airline is Sun Airlines, based in Rosario.

From 1948 (when the railroads were nationalized) until 1992, the entire rail network (freight and passenger) was organized as Argentine Railways. That was divided into six regions - the Midland & North, Central, Buenos Aires Western, Southern, Buenos Aires & Pacific, and Northeastern Railways. When the rail network was privatized in 1992, it broke up into lots of individual companies. The most prominent frieght lines today include the New Central Argentine, Southrail, Midland & North Freight, Mesopotamica, and the Buenos Aires & Pacific. Passenger lines of importance include Plate Rail (covering Plate Province), Central Rail, Buenos Aires Trains (which also serves as a Greater Buenos Aires commuter line), Special Argentine Trains (Buenos Aires to Missions Province), Chaco Railway Services, and the Patagonian Train. As well, there is a high-speed rail line that is supposed to be completed by 2012 that would connect Buenos Aires (at Retiro station) with Cordova through Rosario; there would be a second line linking Buenos Aires (at Farrell station) with Platesea. In Uruguay, all the train lines are run by the State Railways Administration or SRA (AFE in Spanish).

A lot of ferries traverse the waters between the Buenos Aires area and Uruguay. The leading ferry company is Shipbus, but Colonia Express, Cashwell Ltd., and Ferrylines also use the River Plate to get from one side to another.

International trade is quite extensive in both Argentina and Uruguay, but in Uruguay even more. While each of these countries has signed trade accords with many countries around the world, undoubtedly the most important free trade agreement is the Southern Common Market (in Spanish: Mercosur). That makes lowering trade barriers and tariffs more possible between Argentina, Uruguay, Brazil, and Paraguay; Chile and Bolivia are associate members. The Southern Common Market joined with the Andean Community in late 2004 to form the Union of South American Nations (in Spanish: Unasur), to foster more free trade and to reduce poverty in the continent. It is also no accident that the GATT round of world free trade negotiations between 1986 and 1993 took place in East Point, Uruguay – a process known as the Uruguay Round – since Uruguay is a natural free-trade entrepot as well as an offshore finance centre.

Economic History

While the British invasions of 1806-07 first opened up what are now Argentina and Uruguay to trade, they remained largely agricultural all the way through the end of the 19th century. However, British and local investors opened up railways and other infrastructure, along with manufacturing plants like for beef and steel, from the mid-1800s to the early 1900s. Argentina and Uruguay then roared into an unprecedented period of economic growth, became more industrialized, and immigrants poured in at a larger scale than before. This temporarily stopped with the Great Depression, but then World War II and its aftermath helped the economies pick up again. As Argentina and Uruguay became more independent, they weaned themselves from British investment, and local investment played more of a role in economic growth. Unlike in our world, there was no Perón-style nationalization of important companies to ruin the economy for a long time, though Uruguay’s companies have been government-owned at a much higher rate than those in Argentina.

The economies of Argentina and Uruguay took a hit during the Hispanic nationalist crises of the 1960s and 1970s and in response to the 1970s oil embargoes. Unlike in our world, there was never any hyper-inflation or heavy international debt from the 1970s onwards, and the economies have remained pretty strong, so much so that Argentina is in the club of wealthy economies known as the G8 (or G9 if you include Russia). So, over the course of the 20th century, rankings of per-capita GDP in Argentina and Uruguay have declined, though not nearly as much as in our world (more like in Australia and New Zealand, but not quite as bad as even there). The Southern Cone economy recovered, slowly and with interruptions, by the end of the 1980s. Since the 1990s, economic growth has been stronger in Uruguay than in Argentina. Also, since the mid-1980s, Chile has witnessed impressive economic growth, which would hopefully lift it out of the Third World and catch up with Argentina and Uruguay. Brazil, Paraguay, Bolivia, and Peru have not seen nearly as impressive economic growth over the past 2-3 decades.

Economic Output by Province and Country

province

population (2001)

total GDP

GDP per capita

(1999)

Black River

552,822

$13,992,884,261

$25,312

Chaco

1,014,446

$13,281,980,872

$13,093

Chubut

413,237

$12,496,789,717

$30,241

City of Wilsonton

351,842

$11,881,195,764

$33,769

Cordova

3,806,784

$89,149,633,684

$23,419

Cuyo

2,917,607

$61,779,904,098

$21,175

Fireland (territory)

103,987

$4,009,029,215

$38,553

Missions

1,905,522

$26,466,956,246

$13,890

Neuken

474,155

$16,425,101,153

$34,641

New Lancashire

3,448,859

$81,940,543,585

$23,759

North Mesopotamia

950,991

$11,528,728,538

$12,123

Pampa

299,294

$8,008,506,086

$26,758

Pilcomayo

486,559

$6,593,558,215

$13,551

Plate

12,653,341

$397,521,120,736

$31,416

Salta

1,940,939

$24,729,562,751

$12,741

Santa Cruz

196,958

$6,663,342,729

$33,831

South Mesopotamia

1,458,147

$25,609,618,359

$17,563

Tucuman

2,827,548

$36,346,296,850

$12,854

ARGENTINA

35,803,038

$848,424,752,858

$23,697

URUGUAY

5,380,203

$91,791,643,380

$17,061

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