Argentina: Going It Alone

When President Arturo Illia took office 18 months ago, Argentina was in the grip of a severe, two-year recession. Deciding that the cure was increased investment in basic industry, Illia boosted the money supply 61%, curbed all but essential imports and introduced tight exchange regulations aimed at halting the flight of capital. He was partially successful. After two straight years in which G.N.P. had declined an average 4.6%, the government reported that output in 1964 rose 8.2%. In the process, however, wages and living costs both shot up 30%, while meat, grain and wool exporters began complaining that high...

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