Australia’s market economy is thriving with a GDP per capita that is on par with other developed economies, while Argentina is classified as a Secondary emerging market by the World Bank. Australia has maintained economic growth over the last 16 years, driven by high confidence, high employment and increased demand for its export commodities. Traditionally, Argentina has been the top Latin American country. However, due to the long economic, political and social slumps, indicators have significantly worsened. The middle-class has shrunk and numbers living below the poverty line sadly proliferate.
In spite of the negative conjuncture, Argentina still preserves favourable indicators.Both Argentina and Australia have high degrees of civil rights; their constitutions provide and promote freedom of speech. Spiritual standards are practiced freely, movement is not restricted and the press are unregulated. Gender equality in Australia is guaranteed through legislations such as the “Sex Discrimination Act 1984” which ‘aims to eliminate discrimination and sexual harassment and promote greater equality in all aspects of the Australian community.’ Various anti-discrimination laws ensure that workers receive the same wage and benefits.
Gender Equality, along with in Argentina has also significantly advanced but traditional social patterns continue to undermine their participation in labour. Salary Divide in Argentina is a woman’s wage is 98% of man’s.Government’s Role in SocietyIn Argentina, free education is provided to students between 6-14. Similarly, the Australian education system is funded by the Federal Government, by monitored by the State.
In 2006 the national education budget was $40.44 billion, comprising 5.8% of the GDP.
An extensive system of hospitals and clinics in Argentina is run by national and provincial authorities as well as by private organizations. Medical costs are covered by comprehensive array of insurance plans. Public health and sanitation standards are high in developed places but drop off dramatically in undeveloped areas.
Australia’s Federal government is responsible for maintaining Australia’s publicly-funded universal health care system. Medicare provides payments to cover health care services received by Australian citizens (bulk billing), and other subsidies for medication. However, due to increasing costs of health care and changing government policies, the Australian government now promotes a two-tier health care system encouraging citizens to purchase private health insurance.Both Australian and Argentine Federal government provide social welfare payments; including unemployment benefits and pensions. Argentina’s social welfare services were developed during the President Peren’s rule to provide extensive benefits for all workers. However it is difficult to administer payments as there has been an influx of movement of workers from rural areas to the outskirts of urban zones where they have assembled unregistered “shanty towns”.
Erosion, air pollution, and deforestation threaten Argentina’s environment, along with thousands of species of fauna and flora. Argentina’s water supply is constantly jeopardized by uncontrolled dumping of pesticides, and heavy metals from industrial sources, as there is no strict government regulation. In Australia however, Government agencies aim to promote sustainable management practices which attempt to maintain biodiversity and ecological processes. The government advocates energy efficiency, reducing greenhouse emissions and conservation and sustainability of freshwater resources.Economic History:In Australia’s modified market economy, Government Intervention ensures a better outcome for society.
They provide necessary infrastructure and collective goods which would be unfeasible for private enterprises to provide due to costs involved, and regulate certain aspects of economic activity to ensure markets operate competitively and with fairness.Since 1980, Australia has undergone a series of macroeconomic reforms; reduction of high tariffs and quotas, floating of AUS$, privatisation of public entities and deregulation of financial sector for foreign liberal access in Australia. This was in response to the globalisation of world trade; in order to create markets and business opportunities for Australia. Australia is part of many unilateral trade agreements (USA, Singapore, NZ) and according to the Commonwealth Department of Foreign Affairs and Trade, Australia “has a sound, stable and modern institutional structure that provides certainty to businesses and offers a welcoming destination for investment. Australia also has low barriers to trade and investment.
Competition is substantial across the economy.”The Argentine Economy is considered rather volatile (due to recurring economic crises, continual persistent account deficits, and high inflationary rates) and constant Government monitoring and intervention is essential to keep it afloat. Argentina has had to rely on 34 loans, totaling $US7.4billion, from IMF, in order to avoid defaulting. In 1989, when President Carlos Menem took office, the country had accumulated astronomical external debts, inflation averaged 200% per month, and output was plummeting. To combat economic crisis, the government embarked on a path of trade liberalization, deregulation, and privatization. It implemented monetary reforms which pegged the peso to the US$ and limited growth in the monetary base by law to the growth in reserves. The government privatized most companies; induced foreign trade and investment, and created private pension and workers compensation systems.
Subsequently Argentina experienced a boom in the early 1990s, followed by a period of more erratic growth in the second half of the decade when the country was hit by external economic shocks. It is now ranked 38th globally, in terms of wealth (11th in 1910).Economic Structure:The primary sector (4.
8% labour force, 45% exports, 7% GDP) has historically been the backbone of Australia’s early economic growth since 1788. This has gradually declined (especially livestock and wheat) in its share of total output as secondary and tertiary sectors began to emerge in the last decade. The mining industry (3rd largest producer) is also booming due to increased demands on the global market, especially from Asian developing economies.
Argentina is also rich in natural resources, and benefits from a mobilized workforce (41% of the total population participate in employment). Mining’s export value is $US2billion and agriculture (10% GDP) remains a cardinal component of Argentina’s economy as crops and livestock provide much of the nation’s domestic food needs.Industry in Argentina is diversified and driven by a large affluent domestic market. Manufacturing is the single largest employer and the leading precinct in GDP output (35%) according to INDEC. Leading sectors include motor vehicles, auto parts, farming equipment (7% of exports), steel (3%), foodstuffs and textiles (2%). In terms of importance, the Argentine Economy heavily relies on the performance of this category.Development of the Secondary Sector (20% labour force, 30% exports, 23% GDP) especially chemical production, food processing and steel production, in the Australian economy has been influenced by Australia’s domestic market and geographical isolation.
Coupled with policy to provide protection for domestic producers through high tariffs and quotas, manufacturing industries in Australia have mainly focused on providing goods for locals rather than for export. Manufacturers have struggled from competition from rapidly developing Asian industries, and many manufactured products (cars, durable goods) are now replaced by ‘import-substitutes’.Recently, the Australian tertiary sector (75% of labour, 25% of exports, 70% GDP) has experienced stable growth particularly in tourism, retail, and finance. Communications and transports services are major constituents but due to the huge capital costs involved with providing these services to the dispersed population, governments have funded these services predominantly. However since the microeconomic reforms in 1980, many of these services have been privatised (Telstra).
Growth in the Argentinean service sector has been attributed to economic liberalizations in 80s and 90s. Telecommunications and financial services have seen dramatic expansions due to foreign investment in these areas. Certain segments, however, have had their growth restricted such as retail, as recent recessions have constrained consumer spending. Despite this, the Argentinean Tertiary Sector is still the biggest contributor to total GDP.