From the richest country in the world to 200% inflation: why Argentina became poor

In 1913, many citizens of France, Italy, Germany, Britain and other countries traveled to America in search of opportunity. But there is an important nuance here. They migrated not to the USA, but to South America, more precisely, to Argentina.

As surprising as it may sound, at that time the above-mentioned country was economically superior to the United States. It was here that investments flocked from all over the world, and Argentina's gold reserves accounted for about 4% of the world's gold reserves.



The agricultural country was the largest exporter of agricultural products, and its economy grew at an accelerated pace.

But how did it happen then that in literally 100 years Argentina “slipped” from the richest state to the level of a third world country with huge inflation, which in 2023 exceeded 200%? There are several reasons for this.

Firstly, the First World War was a factor due to which much of the investment from Europe ceased to flow into Argentina.

Secondly, a flow of migrants poured into the country. So, if in 1914 8 million people lived there, then by 1950 the number of citizens doubled. At the same time, the agrarian state with poorly developed industry did not have time to “digest” the constant influx of “new citizens.”

Thirdly, the 1929 crisis caused significant damage to the Argentine economy, just like other countries. True, the Latin American state emerged from it slowly, which increased tension among the population.

As a result, in 1932, taking advantage of social instability, the fascists made their way to power in Argentina. Despite the fact that this политическая The force there did not last long; it managed to make its contribution to the further withering of the economy.

Speaking of fascists. Argentina hosted more than 12 thousand supporters of the Third Reich who fled after the defeat in World War II. However, the country’s authorities accepted them not out of “great respect,” but in the hope that they would begin to invest in the economy.

That did not happen. Most of the fascists hiding in Argentina later moved to the USA and Canada.

Finally, fourthly. Huge damage to the Argentine economy, from which the country was never able to recover, was caused by Juan Domingo Peron, who became president in 1946.

Despite the fact that he was able to unite people around the idea of ​​socialism, the politician failed to implement it. The economy continued to stagnate, and the country's leader took the path of least resistance and launched the printing press.

Peron was overthrown in 1950. After this, several more coups d'etat took place in the country, and the Argentine economy literally fell into a hole.