Your leader “Argentina’s bounce” (Dec. 22) repeats a rapidly burgeoning cliche: that Argentina’s …”recovery is mainly due to the devaluation of the peso…” which …”has provided a one - off competetive boost …”
Argentine government statistics pour cold water on these musings. Total exports for the first 10 months of 2003, versus the same period in 2002, increased by 14 percent in dollar terms. But almost 70 percent of that increase was accounted for by price increases realized on the exports of primary products, agricultural produce and oil and gas. Industrial manufactured goods, which accounted for 26 percent of total exports, actually acted as a drag on the value of total exports, declining by 2 percent in 2003 versus 2002. This fails to qualify as even a dead cat devaluation bounce.
Sincerely yours,
Prof. Steve H. Hanke
The Cato Institute
Washington, D. C.
