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Argentina’s International Trade Disaster

Ian Mount states, “In March 2011, Argentina’s government decided that car importers would have to match their imports with exports of equal value”. This policy is essential especially for the nation as a whole as it ensures that there are no deficits in balance of payments leading to a development in their economy. However, it must be applied appropriately. The additional requirements for Argentina to export other products such as rice, leather, car parts, and other agricultural products are a good strategy for international trade. In 2010, the government of Argentina implemented a series of economic regulations to save central bank reserves, as well as, local jobs. Any good strategy aimed at protecting the local employment, saving the bank reserves ensures a growth in the economy of a nation, and this could lead to its development. This is seen in the growth of Gross Domestic Product (GDP) of Argentina from 2003 through 2011. However, according to Mount, the growth has since stopped.

Gaston Rossi says that in trying to regain what was there during the early times, a nation should not ignore what is happening in the rest of the world. Some economic policies may have short-term benefits while in the long run; they may mean serious implications for the people as well as the nation at large. This is because the problem that the country is trying to solve is very simple, yet the policies being implemented are inappropriate. According to Mount, high inflation in Argentina has increased prices for products and services in the nation. High inflation, in turn, makes consumers turn into imports, which endangers the local jobs as well as the dollar reserves in the United States. When import cartels were imposed, imports fell in the country. Blocking a country’s import rates is not the solution, as its part in international business is challenged. This affects many sectors of a nation’s industry especially the biggest industries and the trading partners, who may retaliate from trading with the nation. In fact, other trading partners might take advantage of the situation to their own benefits. The author blames the government currency restrictions as they have caused all the economic problems, and people have no say concerning the matter. The author’s ideas are economically proven as they explain the major economic tools in economic theory.

Japan’s Pain Is Wal-Mart’s Gain

It is clearly known that when the economy of a nation is at boom, many businesses flourish, and the returns are plentiful. This is what is described by Miyakawa who earned about 50,000 dollars in selling golf club memberships in the 1980’s. In economic theory, businesspersons may take advantage of a nation’s poor condition to their own benefit. According to Yuki Yamaguchi, Japan’s economy has been on the cusp of a recession since 2008. Incomes have been falling for the last three years. When an economy is not doing well, the products are expensive, and this makes it difficult especially for low-income earners. However, if there are stores that offer discount rates to consumers, they gain a lot, as is the case of Wal-Mart as described by Yamaguchi. In this case, it leads to its expansion as the net sales increase. Yamaguchi’s economic ideas are correct and are in line with economic theory as described below.

There are strategies that can be applied to maintain the high sales such as increasing acquisitions. Although the company faces obstacles in other parts of Asia such as India and China, it is more enthusiastic, which is a requirement in economic theory. Wal- Mart takes advantage of the budget stress facing the Japanese family. Low incomes also have given way to expansion of other local and foreign retailers. The pledge by Seiyu to cut down the price of items by the end of December is good news to consumers, as they are the ones mostly affected by high prices in the market. People are the major constituents of the economy of a nation. Their welfare is important before looking at other aspects. This means that when people can afford prices for their wellbeing, then the other aspects such as economic growth will follow.

 

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