OECD Economic Surveys: Argentina 2017: Multi-dimensional Economic Survey

174 Pages·2017·4.06 MB·English

by  OECD

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OECD Economic Surveys:
Argentina
2017
MULTI-DIMENSIONAL ECONOMIC SURVEY
This document and any map included herein are without prejudice to the status of or
sovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundaries
andtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2017),OECDEconomicSurveys:Argentina2017:Multi-dimensionalEconomicSurvey,OECD
Publishing,Paris.
http://dx.doi.org/10.1787/eco_surveys-arg-2017-en
ISBN978-92-64-27804-2(print)
ISBN978-92-64-27805-9(PDF)
ISBN978-92-64-27806-6(epub)
Series:OECDEconomicSurveys
ISSN0376-6438(print)
ISSN1609-7513(online)
OECDEconomicSurveys:Argentina,Multi-dimensionalEconomicSurvey
ISSN1995-3127(print)
ISSN1999-0189(online)
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ofsuchdatabytheOECDiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraeli
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TABLEOFCONTENTS
Table of contents
BasicstatisticsofArgentina,2016 ............................................ 8
Executivesummary......................................................... 9
Assessmentandrecommendations........................................... 13
Wide-rangingstructuralreformsarethekeytostrong,sustainableandinclusive
growth ................................................................ 14
Comprehensivemacroeconomic,structuralandsocialreformshavebeen
initiated ............................................................... 18
Improvingproductivityandinvestmenttoraisewell-being ................... 36
Makinggrowthmoreinclusive............................................ 46
Greengrowthchallenges................................................. 57
References ............................................................. 58
Annex1.RehabilitatingArgentina’sofficialstatisticsandstatisticalsystem........ 63
Thematic chapters
Chapter1.StructuralreformstoboostgrowthandlivingstandardsinArgentina.... 67
Structuralreformswillliftgrowthandwell-being ........................... 71
Improvinglabourmarketregulations ...................................... 82
Makingthetaxsystemmoreconducivetoinvestment ....................... 85
Reapingthebenefitsofinternationaltradeandglobalvaluechains............ 87
Attractingmoreandbetterforeigndirectinvestment ........................ 93
Boostinginnovation..................................................... 96
Improvinginfrastructuretoboostproductivityandreduceregionaldisparities .. 97
Developingaccesstofinance ............................................. 101
Providingbetterskillswillboostproductivityandemployment................ 103
RecommendationstoboostgrowthandlivingstandardsinArgentina.............. 105
Bibliography............................................................ 106
Annex1.1.Alandmarkprogrammeofreformshasbeeninitiated .............. 111
Annex1.2.Simulatingtheimpactofstructuralreformsongrowth.............. 112
Chapter2.MakinggrowthmoreinclusiveinArgentina .......................... 115
Reducingpoverty,improvingequityandstrengtheningthemiddleclass........ 116
Creatingbetterjobstoimproveproductivityandequity ...................... 126
Strengtheningeducationandskillstoraisegrowthandequity ................ 143
RecommendationstofosterinclusivegrowthinArgentina ....................... 162
Notes.................................................................. 162
Bibliography............................................................ 163
OECDECONOMICSURVEYS:ARGENTINA©OECD2017 3
TABLEOFCONTENTS
Boxes
1. AglanceatArgentina’seconomichistory ............................... 14
2. ThequalityofofficialstatisticsinArgentina(seealsoAnnex1) ............ 18
1.1. MakingreformhappeninArgentina.................................... 72
1.2. Serviceexports:Asuccessstorywithgoodprospects..................... 91
2.1. Argentina’spovertyreductionincontext................................ 118
2.2. JobQualityinArgentina .............................................. 132
2.3. Estimatingwagedifferentialsforinformalandfemaleworkers ............ 137
2.4. Householdincomeshocksanddropouts................................ 147
Tables
1. Additionalreformsareprojectedtopayoff.............................. 19
2. Macroeconomicindicatorsandprojections.............................. 20
3. Keyvulnerabilities................................................... 22
1.1. Argentina’spotentialislarge.......................................... 71
1.2. Additionalstructuralreformswillpayoff ............................... 72
1.3. WhichgoodsdoesArgentinaexport?(2015) ............................. 90
2.1. WagedifferentialsinArgentina........................................ 137
2.2. Exitratesandhouseholdshocks(OLSregressions) ....................... 148
A2.1.1. Income,taxesandexpendituredistributionbydecile,inpercent
(pensionsaretreatedasgovernmenttransfers........................... 169
A2.1.2. Income,taxesandexpendituredistributionbydecile,inpercent
(pensionsaretreatedasdifferedincome) ............................... 169
Figures
1. Argentinahaslostgroundrelativetoothercountries..................... 15
2. Inequalityhasfallenbutwell-beingisbelowtheOECDaverageinsomeareas .. 16
3. Macroeconomicimbalanceshavebuiltup............................... 17
4. RealGDPhasbeenvolatileandstagnatedinrecentyears ................. 17
5. Thelabourmarketandconsumerconfidenceareshowingmixedsignals.... 21
6. Financialstabilityindicatorsdonotpointtosignificantvulnerabilitiesfornow... 23
7. Thefinancialsectorislessdevelopedthaninothercountries.............. 24
8. Residentialrealestateloansareunderdeveloped......................... 24
9. Bringingdowninflationwillbechallenging ............................. 25
10. Publicrevenuesandexpenditureshavereachedhighlevels ............... 27
11. Bondspreadshaveconvergedwiththeregionalaverage .................. 28
12. Publicdebtissustainableunderseveralscenarios........................ 28
13. Compositionofprimaryexpenditures .................................. 29
14. Publicpayrollexpendituresarehigh.................................... 30
15. Compositionoftaxrevenues.......................................... 31
16. Fewpeoplepaypersonalincometax ................................... 31
17. ThetaxwedgeonlabourincomeisclosetotheOECDaverage ............. 32
18. Corporateincometaxesarehigh....................................... 33
19. VATrevenuescouldbehigherwithstrongercomplianceandlessuse
ofreducedrates ..................................................... 33
20. Investmentandproductivitygrowthhavebeenverylow.................. 36
21. Thereisroomtoreducetherestrictivenessofproductmarketregulations... 38
4 OECDECONOMICSURVEYS:ARGENTINA©OECD2017
TABLEOFCONTENTS
22. Barrierstoentrepreneurshiparehighandregulatoryproceduresarecomplex.. 38
23. Localcompetitioncouldbestronger.................................... 39
24. Labourmarketregulationsarerelativelyrigid ........................... 40
25. Theeconomyisfairlyclosedandbarrierstotradearehigh................ 42
26. Participationinglobalvaluechainsislow............................... 43
27. Exportperformancehasdeclinedstrongly .............................. 44
28. Argentinarankslowontheruleoflawandcorruptionperceptions......... 45
29. Inequalityandpovertyarehigh........................................ 46
30. Labourmarketparticipationisloweramongwomenandtheyoung ........ 48
31. Informalityishigh................................................... 48
32. Transfersandtaxesalleviateinequalities ............................... 50
33. Pensionbenefitsarehighrelativetoworking-ageearnings................ 51
34. Educationalattainmentislowandhasnotimprovedmuch ............... 53
35. Fewstudentsfollowtechnicalcoursesandcareers ....................... 54
36. Learningoutcomesshowroomforimprovementeveninthecapital
ofBuenosAires...................................................... 54
37. Studentperformanceisstronglylinkedtosocio-economicbackground ..... 55
38. Healthoutcomescanbeimproved ..................................... 56
39. Infantmortalityshowssignificantregionaldisparities.................... 57
40. Greengrowthindicators.............................................. 58
1.1. Argentinahaslostground ............................................ 68
1.2. Investmentandproductivityarelow ................................... 69
1.3. Pricesarehigh ...................................................... 69
1.4. Volatilityhasbeenhigh............................................... 70
1.5. Thereisroomtoimproveproductmarketregulations .................... 73
1.6. Barrierstoentrepreneurshiparehigh .................................. 74
1.7. Therearefewyoungfirms ............................................ 75
1.8. Theproductivityofallfirmshavefallen ................................ 76
1.9. Theintensityoflocalcompetitionislow................................ 77
1.10. Theshareoffirmswithafemaletopmanagerislow ..................... 78
1.11. ThescopeofSOEsislargeanditsgovernancecouldbeimproved........... 79
1.12. Thecompetitionauthorityhasalowbudget............................. 81
1.13. Labourmarketregulationsarerelativelyrigid ........................... 82
1.14. Spendingonactivelabourmarketisveryconcentratedinpublicworkschemes.. 84
1.15. Thestatutorycorporateincometaxrateishigh.......................... 86
1.16. Exposuretotradeislow .............................................. 87
1.17. Exportperformancehasbeenweak .................................... 88
1.18. Unitlabourcostshaveincreased....................................... 88
1.19. Barrierstotradearehigh ............................................. 89
1.20. Argentinaisnotwellintegratedintoglobalvaluechains.................. 90
1.22. Argentina’sserviceexportmixiswell-diversified ........................ 91
1.21. Brazil,ChinaandtheEuropeanUnionareArgentina’smaintradingpartners... 91
1.23. Argentinaattractslittledirectinvestment............................... 94
1.24. Thereisroomtoimprovingtheruleoflawandreducecorruption.......... 95
1.25. Businessinnovationisverylow........................................ 97
1.26. Economicdisparitiesacrossprovincesarelarge.......................... 98
1.27. Thequalityofinfrastructureisrelativelylow............................ 99
OECDECONOMICSURVEYS:ARGENTINA©OECD2017 5
TABLEOFCONTENTS
1.28. Financialmarketsarehardlydeveloped................................. 102
1.29. Skillgapsaresignificant.............................................. 104
2.1. Povertyhasdeclinedbutinequalityislarge ............................. 117
2.2. Theshareofthepopulationlivingonlessthan9.8USDPPPaday
hasdeclinedataslowerpaceinArgentinathaninother
LatinAmericancountries............................................. 118
2.3. Incomegrowthbenefitedthelesswell-offthemost ...................... 119
2.4. Inequalityhasdeclined,butitisstilllarge .............................. 120
2.5. Alargeshareofthepopulationispoororatriskoffallingintopoverty...... 121
2.6. Territorialdifferencesarelarge ........................................ 122
2.7. Transfersandtaxesalleviateinequalities ............................... 123
2.8. Formaljobcreationsloweddownspeciallyaffectingthoseatriskoffalling
intopoverty......................................................... 127
2.9. Argentina’slabourmarketneedstobemoreinclusive .................... 129
2.10. ToomanyyoungandwomeninArgentinadonotwork ................... 130
2.11. Unemploymenthitstheyoungandthepoorthemost .................... 132
2.12. EarningsarelowerandmoreunequalthaninOECDeconomies............ 133
2.13. Theshareofinformalemploymentisdecreasing......................... 134
2.14. Informalityenhancesinequality....................................... 136
2.15. Argentina’slabourmarketisfarfrombeingsegmented ................... 138
2.16. School-to-worktransitionsarekeyforyouthinclusion.................... 140
2.17. Poorandatriskoffallingintopovertyyouthfindithardertofindformaljobs .. 141
2.18. Lowspendingonlabourmarketpolicies................................ 142
2.19. SpendingoneducationisonparwithOECDcountriesbutoutcomesarelow... 144
2.20. Highschooldropoutishigh........................................... 145
2.21. Expandingqualityeducationcouldhavelargeeconomicgains............. 147
2.22. Learningoutcomesarelowininternationalcomparisons ................. 150
2.23. Argentinahaslargesharesoflowperformers............................ 151
2.24. Socio-economicstatushasapowerfulinfluenceonlearningoutcomes ..... 153
2.25. Firmscannotfindtheskillstheyneed.................................. 156
2.26. FewstudentsareenrolledinTVETandschoolsfallshort.................. 158
2.27. Occupationstructureischanging...................................... 160
2.28. IncentivesforupskillingareweakerthaninotherLatinAmericancountries.... 161
6 OECDECONOMICSURVEYS:ARGENTINA©OECD2017
ThisSurveywaspreparedbyJensArnoldandAlbertoGonzalezPandiellaofthe
OECD Economics Department and by Paula Cerutti,Angel Melguizo and Sebastián
NietoParraoftheOECDDevelopmentCentre,underthesupervisionofPirittaSorsa
andFedericoBonaglia.StatisticalresearchassistancewasprovidedbyAnneLegendre
and Hermes Morgavi with general administrative assistance provided by
MercedesBurgosandRaquelPáramo.
The Survey was discussed at a meeting of the Economic and Development
ReviewCommitteeon17May2017andatameetingoftheGoverningBoardofthe
OECDDevelopmentCentreon16May2017.Itispublishedundertheresponsibilityof
theSecretaryGeneraloftheOECD.
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BASICSTATISTICSOFARGENTINA,2016
(NumbersinparenthesesrefertotheOECDaverage)*
LAND,PEOPLEANDELECTORALCYCLE
Population(million) 43.8 Populationdensityperkm2 15.8 (35.4)
Under15(%) 25.1 (18.0) Lifeexpectancy(years) 76.9 (81.0)
Over65(%) 11.1 (16.5) Men 73.2 (78.4)
Women 78.1 (80.6)
Latest5-yearaveragegrowth(%) 1.0 (0.6) Latestgeneralelection November2015
ECONOMY
Grossdomesticproduct(GDP) Valueaddedshares(%)
Incurrentprices(billionUSD) 545.7 Primarysector 12.6 (2.5)
Incurrentprices(billionARS) 8050.2 Industryincludingconstruction 25.6 (26.6)
Latest5-yearaveragerealgrowth(%) -0.2 (1.8) Services 61.8 (70.9)
Percapita(000USDPPP) 20.0 (42.1)
GENERALGOVERNMENT
PercentofGDP
Expenditurea 39.5 (40.9) Grossfinancialdebta 52.0 (112.1)
Revenuea 33.7 (38.0) Netfinancialdebta,b 25.0 (72.8)
EXTERNALACCOUNTS
Exchangerate(ARSperUSD) 14.751 Mainexports(%oftotalmerchandiseexports)
PPPexchangerate(USA=1) 9.194 Foodandliveanimals 41.5
InpercentofGDP Machineryandtransportequipment 13.5
Exportsofgoodsandservices 12.7 (53.9) Crudematerials,inedible,exceptfuels 10.6
Importsofgoodsandservices 13.4 (49.3) Mainimports(%oftotalmerchandiseimports)
Currentaccountbalance -2.8 (0.3) Machineryandtransportequipment 44.7
Netinternationalinvestmentposition(2014) 8.3 Chemicalsandrelatedproducts,n.e.s. 18.9
Manufacturedgoods 12.1
LABOURMARKET,SKILLSANDINNOVATION
Employmentratefor15-64year-olds(%) 61.7 (67.0) Unemploymentrate,LabourForceSurvey
(age+14andover)(%) 7.6 (6.3)
Men 72.8 (74.7) Youth(age15-24,%) 23.9 (13.0)
Women 51.4 (59.3)
Participationratefor15-64year-olds(%)a 67.6 (71.3) Tertiaryeducationalattainment25-34year-olds(%,2015) 18.2 (40.7)
GrossdomesticexpenditureonR&D(%ofGDP,2014) 0.6 (2.4)
ENVIRONMENT
Totalprimaryenergysupplypercapita(toe,2014)c 2.0 (4.1) CO2emissionsfromfuelcombustionpercapita
(tonnes,2014) 4.5 (9.3)
Renewables(%,2014) 8.7 (9.6)
Exposuretoairpollution(morethan10µg/m3
ofPM2.5,%ofpopulation,2015) 44.2 (75.2)
SOCIETY
Incomeinequality(Ginicoefficient)c,d 0.36 (0.31) Educationoutcomes(PISAscore,2012e)
Relativepovertyrate(%)c 16.6 (11.1) Reading 396 (496)
Mathematics 388 (494)
Publicandprivatespending(%ofGDP) Science 406 (501)
Healthcare(2014) 4.8 (9.0) Shareofwomeninparliament(%) 38.9 (28.7)
Pensions(Publicc) 8.1 (9.1)
Education(primary,secondary,postsec.nontertiary,2013) 4.4 (3.7)
Betterlifeindex:www.oecdbetterlifeindex.org
* WheretheOECDaggregateisnotprovidedinthesourcedatabase,asimpleOECDaverageoflatestavailabledataiscalculatedwhere
dataexistforatleast29membercountries.
a) 2015datafortheOECD.
b) ExcludespublicdebtheldbypublicsectorentitiesincludingtheCentralBankandtheSocialSecurityAdministrationANSES.
c) 2013datafortheOECD.
d) ForArgentina,basedonhouseholddataforthethridquarterof2016,usingthenewOECDincomedefinition.
e) ForPISA2015,onlyresultsoncapitalcityofBuenosAires.
Source: Calculationsbasedondatabasesofthefollowingorganisations:OECD,InternationalEnergyAgency,WorldBank,International
MonetaryFundandInter-ParliamentaryUnion.