Revista del CEI - Centro de Economía Internacional

international economy, have represented nearly two thirds of the world trade value. The significance ofagricultural products in trade decreases, gradually leading industrialised countries to cease beingimporters and become net exporters of such products. Likewise, it is worth mentioning the dynamiccharacter of these tendencies which impact in the same way on other goods as a result of income growthand technology change, creating an ongoing transformation of production and world trade patterns.3. Impact on Argentina and AustraliaWhen the effects of the structural changes described above are analysed specifically for Argentina andAustralia, it is necessary to highlight some differences. On the one hand, since the mid nineteenth century,the Australian productive structure has been based not only on agriculture and livestock breeding, but alsoon mining, enabling the flourishing of such processing industries as iron and steel, and metal processingindustries, as well as those for the production of the capital goods necessary for mineral exploitation. Atthe same time, Australia’s participation in the First and Second World Wars as a British ally, and as abeneficiary of important trade preferences as a result of the Agreements reached at the CommonwealthConference held in Ottawa in 1932, gave it the possibility to take part as an important supplier to the UKnot only of food and raw materials, but also of industrialised products and military equipment. Thesecircumstances laid the foundations for the establishment of important defence-related industries, takingadvantage of the iron and steel industry infrastructure, the production of capital goods for mining, and theknow-how acquired from the participation in war. This development was complemented by themultiplication of research institutes created during the 1920s together with heavy investment in education.In the case of Argentina, except for the promotion of consumer and intermediate goods industries, therewere neither long or mid-term objectives nor specific policies aimed at diversifying and expanding theproductive base, taking into account the advantages of the domestic market as well as the country’sintegration into the international economy. This weakness, reflected in the failure of supply to adapt to adynamic international demand, could be considered as one of the main reasons for the relative economicstagnation and the recurrent undesirable performance of the balance of payments for many years.The efforts made as from the 1960s in certain sectors such as nuclear energy, power generationequipment and specialised capital goods have failed to consistently spread to other economic areas. Theattempt to modify the above-mentioned situation is thus linked to long-term policies at the macro andmicroeconomic levels, policies related to relative prices and expected capital returns so as to favour thebest possible allocation of resources in order to achieve the country’s insertion in the most dynamic areasof the international demand.In this sense, the State has a key role to play. In the case of Australia, it played a particularly active one.Budgetary expenditures, equally at the federal as at the state levels, have had a remarkably highinvestment component aimed at infrastructure maintenance and modernisation, education and research,still seen at present. Although the amount of the total level and the specific allocation of expenditures isstill a matter of controversy, the conceptual importance given to investment in the areas mentioned beforeis common ground among the different political forces and within the society as a whole.The experience of Argentina reveals that the State was characterised by strong interventionism in terms ofincome policy and by a poor handling of structural transformations. As the overall and sector budgets werefocused on current expenditures, possibilities were reduced for service infrastructure modernisation(transports, energy, communications), and for investment in education, science and technology, healthcare and welfare. In turn, the decrease in the ability to finance investment became an indirect cause forcurrent expenditures to rise, taking into consideration the reduction in employment alternatives thisproduces in the rest of the economy. The importance of the generation of current savings andcapitalisation of external funds devoted to public investment in economically and socially profitableprojects and to funding research and development stems from here. Another significant aspect related tothe role of the Argentine State is the need for modernisation and rationalisation of the public sector, whichimplies providing this sector with the appropriate means and qualified staff so as to ensure efficiency in theprovision of services, analysis capacity and decision-making.