Volume 43, Number 171,
October-December 2012
The Third Peronist Government’s Economic Plan.
Gelbard’s Term (1973-1974)
Cecilia Vitto
MAIN “WEAKNESSES” OF THE ECONOMIC PROGRAM ( ...continuation )

Regarding foreign trade, in spite of the dynamism in industrial exports, which was quite significant and was evidence of a qualitative leap in the development strategy implemented, the economic project had other types of limits that are worth pointing out. First, it can be said that in spite of their dynamism, the participation of manufactured goods of industrial origin among all exports made clear that foreign placement of primary products added to agricultural manufactured goods were still important. This implied significant dependence on exports of this type of goods and as such, on the “support” of the agricultural sector for the economic project to be viable.

The most significant industrial exports in terms of both importance and dynamism were Machinery and electronic and non-electronic equipment, and Chemical Products and Iron and Steel, which accounted for nearly 90% of this type of export in 1973 and 1974 (Vitto, 2010: 92). This participation was in keeping with the most dynamic areas of the second substitution of imports, for which metal-mechanical and chemical activities were indubitable leaders.

Various reflections arise from this framework. First, the project to promote exports of products manufactured by national capital companies and with local technology established in Law Nº 20.545 ran up against a variety of limits, linked to the structural position that different capital fractions had during this time period. In this sense, related to foreign trade, although the government’s project sought to represent the interests of the national bourgeoisie, foreign capital ended up receiving most of the benefits of this program. As a result of the policies implemented in 1973, the national bourgeoisie was weakened in terms of its position in the productive structure. It had weight in medium and low concentrated branches, generally with lower productivity than foreign companies, and they were more labor-intensive.

However, it should be mentioned that there was a relatively minor sector of the national bourgeoisie that was indeed linked to the most dynamic nucleus of capital accumulation oriented towards exporting goods. These companies, dedicated to producing intermediate goods, were linked to multi-national companies as clients or providers (Canitrot, 1978). One of the most paradigmatic examples of this type of company were companies that manufactured automobile parts, and they were highly dependent, as they were controlled by foreign companies, and supplied automobile terminals (Arceo, Azpiazu, Basualdo and Wainer, 2009). In this sense, although this sector of the national bourgeoisie was linked to the dynamic nuclei of this stage of substitution industrialization, they were no less dependent on foreign capital, and as such, they were seriously limited in terms of their capacity to lead the development process. Likewise, it can be said that the strategy to incentivize mios was severely damaging to their capacity to be sustainable in the medium and long term, as the most important industrial exports, largely controlled by multi-national companies, had significant subsidies. As a result, the cost of development from this policy was significantly higher for the State (Testa, 1975).

This did not imply short-term problems in terms of their impact on the dynamism of both sectors, but there were problems in the medium and long term. In other words, problems in terms of consolidating a social subject able to carry forward a sustainable model of development, and the place of the State in fostering this development. Promoting production and the export of industrial goods tended to favor the predominant economic fractions — given the structural place they occupied in the Argentinean economy — and this limited and weakened promotion of the national bourgeoisie.

Likewise, the fact that the immediate response to a fall in profitability or to a government considered “opposition” in a capitalist system was the reduction of investment, in terms of their own interests, should not be overlooked. In this sense, the fall in profitability during this time period is evidence of the business world’s lack of confidence in the government, as well as a replication in the face of a drop in profitability in a scenario of cost increases and price freezing. This business response was thus added to the strategies that tended to elude price controls (black market-supply shortages).

Finally, the State was less able to compensate for low private investment, which was already falling. On this point, although the Triennial Plan maintained that public investment would have a central place in promoting development, it was rather limited, as indicated by Testa (1975: 46), due to the budget deficit, which in 1974 was four times what it was the previous year and was mainly financed with funds from the bcra reserves.

In this way, the project’s unviability was not only linked to the weakness of the national bourgeoisie but also to the State itself, which was unable to redirect the development process and implement or make possible a sustainable scheme in the medium term. This was also occurring in a framework of contradictions within Peronism, where internal disputes among the governing group played a central role, especially following the leader’s death.

It is in this context that, when they tried to begin to implement the measures that sought to restructure relationships within the agricultural sector and especially the land owning structure, it was not long before the conflict with the social sectors indicated began to emerge. In accordance with what Testa wrote (1975: 56), the Agrarian Law bill can be considered as the decisive element that broke the relationship between the landowning sector and Gelbard’s team. Starting from the conflict related to this bill, in the framework of Perón’s death and a change in the economic team, the agrarian sectors moved definitively to the offensive. In this context, the Permanent Assembly of Business Entities (apege, Asamblea Permanente de Entidades Empresarias) was formed in August 1975, which brought together the most powerful industrial, commercial and agrarian business sectors (including the agricultural and “diversified” oligarchies). This group would carry out the final offensive against the third Peronist government.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March 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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