Foreignization and Industrial Economic Power in Argentina
Pablo Manzanelli and Martín Schorr
In remembrance of Daniel Azpiazu
Date submitted: July 28, 2011. Date accepted: December 8, 2011

Argentine industry experienced a process of rapid expansion following the collapse of the Convertibility Regime in the early days of 2002. This was only altered by the domestic effects of the international crisis, which rose at the end of 2008. This phase was accompanied by a rise in economic concentration and, in this context, in an increase in the predominance of foreign capital in the business leadership. This paper analyzes these processes and seeks to identify the main explanatory factors, as well as the most significant implications for socio-economic behavior in Argentina. To this end, the aim is to provide pointers that reflect on whether the highly concentrated and foreignized industry that actually exists can be the nucleus for an “accumulation model with social inclusion” as the predominant view maintains.

Keywords: Manufacturing industry, economic concentration, centralization of capital, foreignization, large companies, economic power.

Since the collapse of the convertibility regime at the beginning of the critical year of 2002, Argentinean industry was undergoing an extremely pronounced phase of expansion (which was only slowed by the local effects of the 2008 global crisis). In those years, in the midst of intense manufacturing growth, we see on display some processes that are diametrically opposed to what happened in the “financial and structural adjustments model” active between 1976 and 2001.2 Among other initiatives, the important creation of jobs and increased participation of the manufacturing sector in the country’s economic activities stand out. These aspects are relevant when we consider the rapid retraction of manufacturing employment during the quarter century in question, as well as the deindustrialization process that took place.

Additionally, in a context marked by the almost total absence of active and coordinated industrial policies (the “high dollar” constituted an important foundation of “industrial development”), in the post-convertibility time period, many critical elements characteristic of the manufacturing trajectory under the predominance of neoliberalism were consolidated, while other “new” ones were established. Among other tendencies, the following stand out:

  • The absence of significant modifications to the profile of manufacturing specialization and insertion into the global market, which is mainly manifest in the consolidation of a sector productive structure oriented towards the processing of natural resources and toward the automotive sector and assembly.
  • Greater dependence on technology and the historical decline of the national capital goods industry
  • The incipient manifestation of a stop-and-go dynamic in external commercial performance, and in this context, the existence of commercial deficits for industry. In fact, these imbalances have been “financed” by currency contributed from a handful of large businesses and economic groups that mainly perform activities characterized by a very low level of or no processing at all (as a result of this, they have significant and growing veto power over state functions and, more specifically, over the formulation of public policy), and
  • The surge of extremely reduced salaries in historical and international terms, which constitutes a correlate, the condition of possibility, to the cycle of accumulation and reproduction, amplified fundamentally by capital from predominant economic agents.

These tendencies have been discussed and analyzed in a previous work (Azpiazu and Schorr, 2010a). This article reiterates some of this analysis, but is oriented towards a problem that is considered relevant in both political and academic fields. That is, the link between growing foreignization of Argentinean industry and its most important implications.

1 This work was carried out as part of Project pict 2008-0406 “Argentinean Industry in the Post-Convertibility Era: Continuity and Ruptures in the Dynamics and Structure of the Sector,” with support from the National Agency to Promote Science and Technology. The authors would like to thank anonymous evaluators for their comments on a preliminary version, relieving them of any responsibility for errors or omissions that may arise.

* Research fellow for flacso Argentina. E-mail address:

** Researcher at conicet-flacso, Argentina. E-mail address:

2 For further information on the “financial and structural adjustments model” and the convertibility regime, please see studies from Basualdo (2006) and Diamond and Nochteff (1999).