Argentina's second Five Year Plan was based on encouraging the growth of
heavy industry. It was created in 1952, during the second term of Juan Domingo Perón (1951–1955).
Measures During this time, Perón focused on promoting
foreign investment in Argentina's trade. The main actions included: • Increasing foreign investment • Expanding heavy industry • Removing most subsidies and industrial loans • Partially restricting public consumption • Having the IAPI (Argentine Institute for the Promotion of Trade) purchase crops at lower-than-international prices to generate resources and boost industrialization.
Economy The state managed exports of surplus domestic products and imported fuel, raw materials, and equipment essential for agriculture, industry, and mining.
Argentine Institute for the Promotion of Trade The Argentine Institute for the Promotion of Trade (IAPI) was established on May 28, 1946, by decree nº 15350. Although signed by President
Edelmiro Farrell, it was part of a plan developed by Colonel Juan Domingo Perón and his advisers. Operating under the
Central Bank, the IAPI aimed to centralize foreign trade and redistribute resources across different economic sectors. The institute was led by economist Miguel Miranda, who was also the chairman of the Central Bank.
Objectives The objective that guided the creation of this agency was the need to have an agency specialized in trade issues, a better external integration through the conquest of new markets, and the consolidation of Argentina's presence in those already obtained. It also sought to promote the quality and diversity of local products and create strategies to defend their prices in the international market against the eventual deterioration of the
terms of trade; protecting domestic producers against the changes in international prices, and against the action of international monopolies and importing countries of Argentine products.
Features The body had different functions. At the commercial level, it was responsible for buying cereals and meat to the producers, and then export them when international prices were favorable. Also met financial functions, providing funds to certain public agencies,
provincial governments and even to the private sector for the acquisition of capital goods. When the Institute acquired processed products which failed placement, it provided the profit margin for the industrial sector, creating a special joint committee to resolve the crisis in certain productive sectors, acquiring raw materials to give it to manufacturers. Also developed promotion and development functions, as determined which production activities were a priority and therefore should receive special treatment, for example, the granting of credits without obligation to repay. On the other hand, it subsidized the production of certain
consumer goods in order to maintain the level of
real wages.
Results Trade agreements were reached with several countries. Between 1947 and 1949 reached trade agreements with
Switzerland,
Hungary,
Italy, the
Netherlands,
Norway,
Finland,
Denmark,
Brazil and
Sweden. Despite the efforts made by the body to expand the portfolio of buyers of Argentine products, the United Kingdom continued to rank first as an importer, followed by the United States. Concerning imports, the importance of IAPI was significantly lower. The major purchases were recorded in the areas of
metallurgy,
building materials,
machinery and textiles, standing out as sellers United States and Great Britain, while trade with the Soviet Union reported a significant increase since 1953.
Decline After World War II, agricultural prices declined due to Europe’s economic recovery, reducing IAPI’s main revenue source. Since 1949 the institute's activities dwindled, leading to the private sector take over much of the exchange. In its relations with the private sector, the large subsidies granted IAPI: between 1947 and 1954
agricultural subsidies amounted to 5,063,011
pesos, while the livestock sector amounted 4,567,590 pesos. Finally, the deficit turned out to be important enough to motivate the redesign of its convenience (in its latest report the agency's operating deficit amounted to 20,000 million pesos or 3% of the GDP of that time). == Works carried out ==