Volume 43, Number 168,
January-March 2012
Argentina's Business Leadership and its Role
in Economic Development
Juan E. Santarcángelo and Guido Perrone

Figure 11. Prospective Path of the Ratio Profit to Sales in Steel and Aluminum,
Industry and Total in the Business Leadership 2000-2009
Source: Prepared by the authors on the basis of data supplied in the enge, the journal Mercado and the Political Economics Department at UNGS.

Figure 11 shows the prospective path of the ratio of profit to sales for the Steel and Aluminum sector, for the industrial sector as a whole and for the total business leadership. As can be observed, up until the devaluation of the peso, the profit margin over sales in this activity is lower than it is for industrial activity as a whole and well below the average for the business leadership. From 2002 however, profitability in the Steel sector shows a phenomenal increase. Whereas in 2001 the ratio of profit to sales barely reached 1% for most steelmaking companies, in 2003 it reached 12.9%, peaking at 24% in 2004 and maintaining high levels during the following years. This trend shows that sectorial profitability was restored in the new post-Convertibility period, as a result of an enormous drop in salary costs and a continuous increase in productivity. The increasing performance of the profit to sales rate was accompanied by a substantial increase in the volume of sales in the sector, which increased almost thirty-fold between 2000 and 2008. In view of their sales performance and profitability margin, steelmaking companies became one of the best performing sectors in the industrial leadership after the devaluation.


An important debate exists in the academic sphere concerning the precise definition of economic development as a concept. However there is consensus that if the development process is to be successful, certain basic elements are necessary: a high rate of economic growth, increased complexity within the productive fabric (normally associated with the strengthening of industrial activity), the steady generation of employment, clear improvement in distributive material and a decline in the key indicators of poverty and destitution.

As this analysis has revealed, the business leadership has been a key player in economic recovery from the end of 2002 and has made a substantial contribution to economic growth. However, we have also observed that from 2003 to 2009, despite these changes, the industrial elite has consolidated many of the tendencies in force during previous decades, and if examined in isolation, many of these trends can be seen as intrinsic to the development of capitalism (for example, an increase in the process of economic concentration). The consolidation and interaction of several of these factors have made a negative contribution to economic development.

As part of this analysis, we have observed a substantial increase in the part played by the business leadership in the rate of economic concentration, a phenomenon further heightened by those leading companies involved in manufacturing activities. However, companies that produce tradable goods within the industrial elite are lacking, and those dedicated to processing primary goods have taken hold (food and drink, petroleum refining and steelmaking). Likewise, although the performance of the automotive sector has been satisfactory during this period in terms of growth, specialized studies (Azpiazu et al., 2010, and Santarcángelo et al., 2009a, 2009b) maintain that this process is driven entirely by transnational, foreign companies, whose development has little impact on the framework of industrial production and less still on employment and compensation rates.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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