Chapter 494 The Tango Effect (Revised)

Masayoshi Kishimoto and Kiyoshi Kobayashi talked for a long time. Kishimoto Masayoshi also needed the other party to make a plan with confidentiality and detail.

Masayoshi Kishimoto knew that not only the Japanese, but also many people in the world knew very little about Argentina.

The most they know is Argentina’s soccer. Otherwise, it was the war between Argentina and Britain on the Isle of Man.

Other than that, very little is known. In the international arena, it is like a small transparent existence. When you think of South America or Latin America, Brazil is often the first country that comes to mind.

In fact, Argentina has a variety of natural conditions favorable to economic development. Its population is only 4% of India’s, but the land area is equivalent to 85% of it.

And India is 1/3 of China’s land area, arable land is a little more than China. Argentina accounts for 1/4 of the country’s total area of the Pampas grasslands with a mild climate, fertile land and flat terrain.

Argentines often proudly say, our plains from the Atlantic Ocean, a plow plow to the Andes foothills, will not touch a stone.

In addition, Argentina also has a wealth of resources, including rare metal beryllium reserves ranked second in the world, uranium reserves ranked first in Latin America, oil and natural gas and other resources are also relatively abundant.

Other conditions in Argentina are also well suited to economic development. It has more than 5,000 kilometers of coastline, numerous bays and a mild climate that provides Argentina with many unfrozen ports.

Argentines, mainly descendants of white European immigrants, make up about 97% of the country’s total population. As a result, Argentina is largely free of ethnic conflicts.

In general, Argentines are relatively well-educated and have a relatively well-qualified labor force. The education level of Argentines is also among the highest in the Third World countries.

In 2000, Argentina’s total external debt amounted to $146.2 billion, equivalent to 4.7 times the foreign exchange earnings of that year, and debt service accounted for 38% of export earnings in that year. Argentina’s per capita income, however, was more than $8,000.

As a result of the financial crisis in Southeast Asia and the financial crisis in Brazil, in November 2001, the Argentine government announced its inability to repay its external debt and decided to implement debt restructuring.

From December 20, 2001, when President de la R煤a announced his resignation, to January 1, 2002, when Senator Duard of the Justice Party was inaugurated as the new president, there were five changes of presidents in just 12 days, indicating that the political crisis was also quite serious.

Massive riots and intense political turmoil forced the government to abandon the currency board exchange rate system of pegging the peso to the US dollar, and domestic and foreign investor confidence in Argentina plummeted. Argentina not only encountered a debt crisis, but also plunged into a political and social crisis.

Prior to this, the Argentine economy had been in recession and the government’s fiscal deficit and debt situation had worsened significantly. The government had to finance the deficit through domestic banks, and the ratio of government debt to bank assets climbed rapidly, which significantly increased the credit risk of the banking system.

On December 23, 2001, the Argentine government announced a temporary suspension of interest and principal payments on all public debt, and on December 24, it announced that in January 2002 it would issue its third currency, the Argentine dollar.

The Argentine peso depreciated sharply, up to 75%, and inflation in Argentina rose rapidly, with cumulative inflation after the peso depreciation reaching a maximum of 80%, a large number of businesses closed, unemployment rose sharply to 25%, and the economy declined by 10.9% in 2002.

At the end of 2004, after arduous negotiations, finally reached an agreement with the international financial institutions, announced a debt restructuring program to issue new debt equivalent to only 25-35% of the face value of the debt to pay off the old debt. 3 March 2005, the debt restructuring was a success, and more than three years of the debt crisis was declared over.

Argentina has become one of the “transgressive countries”, having gone from being one of the world’s leading economies to being the world’s largest debtor in less than 100 years.

The Argentinean people also have a strong sense of over-consumption, which makes it difficult to raise their savings rate. In 1998, for example, Argentina’s savings rate was 17. 4%, not only lower than the Latin American average (19%), but also lower than Brazil (18. 6%), Mexico (22.4%) and Chile (25. 2), and even lower than South Korea (33. 8%).

In fact, Argentina’s GDP per capita is less than that of South Korea’s. In 1998, Argentina’s was $8,030 and South Korea’s was $8,600.

In the same year, Argentina’s private consumption per capita was $7,818, while Korea’s was only $6,695. With a low domestic savings rate, Argentina had to rely on external funds to expand its reproduction. It is no wonder that after the outbreak of the debt crisis in Argentina in the early 1980s, it is again experiencing a debt crisis less than 20 years later.

A growing body of research shows that higher savings rates are both the driving force and the result of faster economic growth.

When the economy grows faster, people’s living standards rise rapidly and they save more without reducing their consumption.

The increase in savings in turn expands investment and accelerates economic development, ultimately leading to a virtuous cycle of savings and growth.

The financial crisis that broke out in Argentina not only hurt itself greatly, but also affected neighboring Brazil and the whole of Latin America. This situation in Argentina is called the tango effect.

From the 90’s, with the continuous development of financial globalization, a country or a region of the financial situation of turbulence, or even into the financial crisis, it will produce a contagion effect, the western media it is trying to find a way to find a way to symbolize your country from your country, this region, a kind of thing called.

In 1994 after the outbreak of the financial crisis in Mexico, in Mexico there is a kind of wine called tequila, this wine refers to this country out, so people will be the effect of the financial crisis in Mexico called the tequila effect.

When the financial turmoil occurred in Brazil in 1999, Brazil was famous for its samba dance, so the international community said that the effect of the financial turmoil in Brazil was called the samba effect.

At this time, Kishimoto justice naturally recalled his and Iwasaki Maki that a five-year betting agreement.

Iwasaki Maki’s investment focus is in South America centered on Brazil. He knew that he was going to be able to eat her. Although the victory, but the business field above the Yu I guile is belong to the norm.

When the time comes, he is sure to take back the other 50% of Hard Gold Media’s shares from Iwasaki Maki’s hands.

Perhaps, not even five years, Iwasaki Maki will take the initiative to their own hands of this part of the hard gold media stock sold to himself to fill her in South America investment in the huge shortfall.

By that time, although the entire Hard Gold Group’s shareholders were more than just himself, but there was no one who could threaten himself.

Anyone who wanted to withdraw their shares could be repurchased by him without much effort. Similarly, if he wanted to privatize the whole thing and then achieve personal sole ownership, it would be as easy as drinking water.