According to the last report by the World Economic Forum (WEF), Argentina is one of the most protectionistic countries in the world. In this report, the WEF surveys 138 countries all around the globe, measuring the barriers each country’s economy puts to foreign competitors.
How does the WEF rank Argentina?
The 2016-2017 edition of this report places Argentina 136th in the ranking of most protectionist countries — one being the least protectionist, and 138 being the most. This measured by the extent to which foreign goods or services a big part of the country’s GDP.
This chart shows the percentage that imports represent in the national GDP, and makes it clear that the amount has been decreasing since 2011. At the moment, imports are a mere 10 percent of the GDP.
Why we need to take this information with a grain of salt
However, according to Sergio Pernice, Director MBA at the University of CEMA (UCEMA), this index is not a reliable method to measure how protectionist an economy is because the more developed the economy is, the larger the percentage of national products and services that will be represented in its GDP.
In other words, if the economy is well developed it will be capable of supplying most of the needs of the country, without having to rely on imports. That is why some of the most advanced economies, such as Japan or the United States are not that far from Argentina in the WEF ranking.
The political effects of the ranking
According to Pernice, a narrative exists accusing the Macri administration of destroying national industry in Argentina. These critics claim that the persistent search for international investment and the intention to bring international business to Argentina is forcing national business close their doors.
“Although the report does not implement the best techniques to rank the countries,” Pernice says, it does show that accusing Argentina of being an open country “is an ignorant thing to do.”
“To accuse a country that is 136th out of 138 in the ranking of most protectionist nations in the world, of indiscriminate openness, shows deep ignorance or dishonesty,” he adds.
The ten most protectionist countries, according to the ranking (from 140th to 130th) are: Iran, Venezuela, Argentina, Chad, Pakistan, Brazil, Algeria, Ecuador, Nepal and Zimbabwe.