Friday, November 23rd 2012 - 01:46 UTC

Roubini warns Argentina is heading for a highly vulnerable “State capitalism”

Argentina is adopting measures that impact negatively on investors and consumers confidence warned US economist Nouriel Roubini who became world famous for having anticipated the international crisis of the sub-prime mortgages and junk bonds.

The respected economist was the guest of Argentina’s Chamber of Construction

“Argentina has moved away from market oriented policies with imports substitution protectionist measures; national control over natural resources; a more predominant role for state companies and banks and discouraging foreign investments and the influx of capital” said the economist who was especially invited to the annual convention of the Argentine Chamber of Construction in Buenos Aires.

“These policies have a negative impact for investors and consumers’ confidence, which on the long run has its influence on growth”.

Roubini who is a professor at the New York Leonard Stern School of Business warned that Argentina is heading towards “a State capitalism” which could make the country “more vulnerable to domestic and external shocks”

He also underlined that “there is more optimism in developed countries about the economic recovery” of those now troubled economies.

But nevertheless he pointed out to a raft of risks related to the Euro crisis, the slow growth in the US, deceleration of the Chinese economy and emerging countries and geopolitical factors mainly in the Middle East.

Nourini said that the economic, banking and fiscal crisis in the Euro-zone already has spread to seven countries (Cyprus, Spain, Slovenia, Greece, Ireland, Italy and Portugal) and will continue for a long time because of the convergence of the high private and government debt levels.

He anticipated that the situation would create a slowdown in Germany and France combined with a mediocre growth in the US and the fiscal cliff danger feared for 2013.

The US must also agree to a fiscal consolidation given that it faces an 8% GDP deficit and a debt level of 80% of GDP.

His economic overview also included China with a “non sustainable economic model” since from growing 10% annually this year it is expected to expand 7.5%.

“They save too much and consume too little. Private consumption is in the range of 35% of GDP when in any economy the level is 60% to 65%”.

He added that even when the new Chinese leadership is aware of the problem, “my fear is that reforms are addressed at a slower pace than needed”.

So China instead of a soft landing could be faced with a “forced landing” which could impact on the global economy.

Finally Nourini warned about the persistence of a ‘geopolitical risk’ emerging from tensions between Israel and Iran and the growing difficulties in several countries following the “Arab spring” which could have an impact on oil prices.

21 comments Feed

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1 Raven (#) Nov 23rd, 2012 - 03:11 am Report abuse
With the way things are going, Argentina seems more destined to be a new Communist country with each passing minute. After all, didn't the USSR have '' imports substitution protectionist measures; national control over natural resources; a more predominant role for state companies and banks and discouraging foreign investments and the influx of capital'' ?
2 ElaineB (#) Nov 23rd, 2012 - 05:18 am Report abuse
Yes, but the USSR was never communist, it was a State Capitalist regime. People work for peanuts and the oligarchs -like the Kirchners - get rich off the profits.
3 toooldtodieyoung (#) Nov 23rd, 2012 - 07:24 am Report abuse
“Argentina is adopting measures that impact negatively on investors and consumers confidence”

No, really??? do you think??

Thanks Nouriel Roubini, for stating the bl**din' obvious!!!!!!
4 Usurping Pirate (#) Nov 23rd, 2012 - 09:04 am Report abuse
What do you expect from a bi-polar widow with no grasp of economics , surrounded by a bunch of pseudo marxist thieves whose only interest is lining their own pockets ? Shame they don't realize there are more opportunities for theft in a rich country than a poor one .
5 LightThink (#) Nov 23rd, 2012 - 10:29 am Report abuse
Roubini the oligarchy tout !

Where were you when 90th years on Argentina ?
6 cornelius (#) Nov 23rd, 2012 - 12:15 pm Report abuse
Ha... People just noticed that, they are trying to have a Chinese style market control capitalist system but, there is only one problem, they have no brains and they are highly corrupted.
7 Conqueror (#) Nov 23rd, 2012 - 12:27 pm Report abuse
What's this? Only one argie troll? Surely there should be dozens explaining why Roubini is wrong, biased, ignorant, destructive. Followed by the derogatory and insulting filth. Or could he be right? Is argieland DOOMED?
8 Nostrolldamus The 2nd (#) Nov 23rd, 2012 - 04:17 pm Report abuse
Isolationism for our history books, isolationism for lunch, and isolationism for the next 20 generations!
9 Yuleno (#) Nov 23rd, 2012 - 04:54 pm Report abuse
The USSR was socialist and state capitalism was a phase required to achieve resources to build the socialist state.
10 Simon68 (#) Nov 23rd, 2012 - 04:57 pm Report abuse
9 Yuleno (#)
Nov 23rd, 2012 - 04:54 pm

And we all know how that little experiment ended!!!!!!!!!
11 Captain Poppy (#) Nov 23rd, 2012 - 05:10 pm Report abuse
#2 Elaine...yes it was a state socialist ruled by a single “communist party”. Communism is a state capitalist society.
It seems that KFC seems to think she can do a better job at it then China, Russia and lets not forget the best example yet starving their people...Cuba. I think the Argentines and Cubans will have a lot more in common then they ever thought possible.
12 Yuleno (#) Nov 23rd, 2012 - 07:36 pm Report abuse
Poppy either you don't know what communism is or you don't know what capitalism is.Perhaps you don't know what either is.
Clever simon68
And do we all know why it ended?Can you tell us all in case we don't know?
13 cornelius (#) Nov 23rd, 2012 - 07:37 pm Report abuse
at #7 Of course Argieland is DOOMED they nationalized their international debt they Pesified if they can get credit they have to get more taxes and they have to print money of course inflation is a form of taxation so there you have economics 101 That is why the dollar restriction Argieland is doomed.
14 Captain Poppy (#) Nov 23rd, 2012 - 07:49 pm Report abuse
yulena.......pull someone else into your webs or diversion and digression. This article.....for that matter this whole website is about how fucked argentinea has always been, is and always will be.
15 British_Kirchnerist (#) Nov 24th, 2012 - 01:12 am Report abuse
Roubini got one thing very right, the subprime coming crisis in the west, but he seems utterly ideological and rather out of his depth on this issue

#2 Elaine were you in the SWP as a student perhaps?
16 Iron Man (#) Nov 24th, 2012 - 07:50 am Report abuse
@15 Hmmmm, who to listen to on economic outlook - some fantasist troll on here or a world renowned economist? Maybe I will have to lie down to think it through for a while.
17 Troy Tempest (#) Nov 24th, 2012 - 09:34 am Report abuse
@15 BK
Meanwhile, Argentinian children and aboriginals from Salta, die of malnutrition while for economic and political reasons, soy is exported to feed China.

Mao did the same thing, sentencing many of his population to death so that could feed the Soviet Union and curry their favour.
Classic State control of the economy.
18 TipsyThink (#) Nov 24th, 2012 - 09:51 am Report abuse
All coúntries are fúll of “ state capítalísts ”
19 British_Kirchnerist (#) Nov 24th, 2012 - 10:08 am Report abuse
#17 The “free market” does the same thing. I read on here a while back a link to an article that suggested the situation with the aboriginals was more complicated and the role of the left national government has been a positive one, even if too slow off the mark for the scale of the problem. But what you describe certainly happened in Britain's own “state controlled” economy in India more than once, and finally with the Bengal Famine during the Second World War, and has also been happening to parts of Africa due to the workings of the free market for decades
20 Captain Poppy (#) Nov 24th, 2012 - 02:13 pm Report abuse
Lets see ....mmmmm...on one of the economically smartest guys on the planet.......or BK....the elder argentine troll masquerading as a Scottish Communist.

Freaking choices man!
21 andy65 (#) Nov 28th, 2012 - 01:16 am Report abuse
Everyone sees this except Argentinians led by the botox queen


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