On Argentina and Economy
Argentina is one of my favorite countries. I love visiting it and I have many friends from there. One fascinating thing I noticed among my Argentine friends is that they are very quick to tell me how poor their country is and how terrible the default in 2001 was.
At the chart above you that Argentine GDP went from 284B to 97B around 2001. Which is huge ~3x reduction. What is interesting at this chart is that by 2007 Argentina completely rebounded in terms of GDP. 5-6 years of huge recession is objectively terrible of course, but when I talk to my Argentine friends it seems like they say that Argentina never recovered after the default 22 years ago. Which is a bit strange because by 2017 Argentine GDP was 642B which is over 2x the pre default number. It did drop again dramatically since 2017 to 449B, but it is still 1.5x the GDP from 2000.
My goal is not to gaslight Argentines and say that their stories are not trustworthy. My goal is to establish some relationship between different sources of information - between personal stories but also between various public charts and datasources that are available to us. At the end of the day not a single source of information can tell us everything we need to know, but hopefully combination of the sources can paint a better picture about past, present and the future.
I’ve listened to many complaints about Argentine economy from my friends but they rarely asked about Ukrainian economy. Which is interesting because both countries are very comparable. Both have populations of around 40M people.
On this chart we already see several interesting things. Argentine population doubled from 1960 till 2020 and went from 20M to 40M people. And the growth continued even through the years that followed default in 2001. Which is interesting on itself, why didn’t the growth stop? Ukrainian chart is different. Ukrainian population picked in 1992-1993 when it was 52M people and then it decreased every year since then.
So let’s compare GDP of Argentina and Ukraine.
Keep in mind that population size is similar so we don’t really need to look at the GDP per capita, but lets check that anyway.
So what do we see here? In 2000 Argentine GDP was 10x the GDP of Ukraine (300B vs 31B). We also see that Ukraine experience 11 years of economic crisis from 1990 till 2001 when GDP was shrinking (except year 1997). So it was 11 years of crisis vs 5-6 years of the one that Argentina experienced. In 2014 Ukraine experienced another huge drop of GDP. When Russia invaded Ukraine in 2014 Ukrainian GDP went from 183B (2013) to 91B (2015). 9 years later Ukrainian GDP still didn’t reach pre-war levels.
So we see that even currently Argentine GDP is ~3x the GDP of Ukraine: 449B vs 153B in 2019. And my Argentine friends keep telling me that Argentina is in shambles past 20 years with political and economic instability.
Observations and questions
I’m still struggling to reconcile personal stories I hear and some basic economic data and charts. Ukrainian GDP is way smaller than Argentine one (varies from 3x to 10x difference in the past 22 years) but I never heard as many complains from Ukrainians comparing to Argentines.
Why is that?
- Is it because those GDP charts are misleading and we need to look at other charts? Which ones?
- Is it because of some cultural differences?
- Is it because Argentines have some different narratives and beliefs of what their country deserves to be?
- How can we compare struggles of people from different countries and different contexts? Is it possible to do so?
Anything else? Or maybe the combination of all of those things?
I’m struggling to reconcile GDP charts, complaints from my friends and my personal visits to Buenos Aires. The restaurants were full and busy and it confused me because when Ukraine was in economic crisis in 1990s no one went to the restaurants.
The world is a bit difficult place to navigate sometimes. How do we balance our own subjective experiences, experiences of our friends and the data we have?
If you have some ideas - please write to me.