The Roca-Runciman Pact and Argentina’s Economic Shift
Protectionist Measures During the 1929 Crisis
Following the 1929 crisis, central countries adopted extreme protectionist measures to safeguard their economies. This involved reducing purchases of raw materials and foodstuffs from peripheral nations like Argentina.
Impact of the Global Economic Crisis on Argentina
The global economic crisis significantly impacted Argentina’s trade balance and agricultural capitalists’ income. Maintaining investments in the primary export sector became increasingly challenging. The incorporation of new agricultural lands in the Pampas region slowed, and investments in infrastructure declined. Productivity suffered due to reduced investment in mechanization and agricultural technologies. The crisis ultimately led to the closure of the Argentine economy.
The Roca-Runciman Pact: Terms and Conditions
Signed on May 2, 1933, the Roca-Runciman Pact was an agreement between Argentina and Great Britain. It aimed to secure export quotas for Argentine beef and reaffirm the existing trade relationship. Key clauses included:
- Argentina secured a quota of at least 390,000 tons of chilled meat, although Britain retained the right to restrict purchases.
- Argentine meat exports were to be handled by foreign refrigeration companies, with a small percentage allowed for Argentine companies, but still under British control.
- Argentina agreed to maintain free trade for British coal and other products.
- Argentina committed to not reducing railway rates.
- The agreement ensured protection of British interests in Argentina.
Historiographical Controversy Surrounding the Pact
The Roca-Runciman Pact sparked controversy among historians. Economists like Fodor and O’Connell argued that it reinforced Argentina’s dependence on Britain and the U.S., creating an unequal relationship. Conversely, Peter Alhadeff suggested that the pact contributed to Argentina’s economic recovery, benefiting farmers and debtors.
The State’s Role in the Economy
The crisis challenged liberal economic principles, leading to increased state intervention. The state’s role expanded to maintaining currency stability, regulating production and prices, and managing domestic and foreign trade to prevent future crises.
Reasons for Industrial Development
The Roca-Runciman Pact, while intended to restore the traditional economic relationship between Argentina and Britain, failed to resolve Argentina’s economic woes. The agro-export model was no longer viable, necessitating industrial development. Landowners and exporters accepted industrialization as a solution to the national economic problems. This shift led to reduced imports, which indirectly supported industrial growth. The UIA (Unión Industrial Argentina) also accepted government measures, even those that hindered certain industries.
Key Industrial Sectors
Industrial development in Argentina focused on areas related to local agriculture, particularly the meatpacking industry for export. Flour mills, packing plants, and canneries also existed. Innovations included the production of biscuits, cakes, and alfajores, as well as the development of packaged Argentine fruits. The textile industry also emerged during this period, addressing the high volume of textile imports. Machinery, vehicles, chemicals, and pharmaceuticals also saw significant growth.