Economy of Belgium

The modern, private enterprise economy of Belgium has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. The first country to undergo an industrial revolution on the continent of Europe in the early 19th century, Belgium developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbors. Industry is concentrated mainly in the populous Flanders in the north, around Brussels and in the 2 biggest Walloon cities, Liège and Charleroi, along the sillon industriel. Belgium imports raw materials and semi-finished goods that are further processed and re-exported. Except for its coal, which is no longer economical to exploit, Belgium has virtually no natural resources. Nonetheless, most traditional industrial sectors are represented in the economy, including steel, textiles, refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and machinery fabrication. Despite the heavy industrial component, services account for 74.9% of GDP, while agriculture accounts for only 1% of GDP.

With exports equivalent to over two-thirds of GNP, Belgium depends heavily on world trade. Belgium's trade advantages are derived from its central geographic location and a highly skilled, multilingual, and productive work force. One of the founding members of the European Community, Belgium strongly supports deepening the powers of the present-day European Union to integrate European economies further. About three-quarters of its trade is with other EU countries.

Belgium's public debt is about 99% of GDP. The government succeeded in balancing its budget during the 2000-2008 period, and income distribution is relatively equal. Belgium began circulating the euro currency in January 2002. Economic growth and foreign direct investment dropped in 2008. In 2009 Belgium is likely to have negative growth, growing unemployment, and a 3% budget deficit, stemming from the worldwide banking crisis.

Belgian economy in the twentieth century

Evolution of the Belgian GDP

For 200 years through World War I, French-speaking Wallonia was a technically advanced, industrial region, with its industry concentrated along the sillon industriel, while Dutch-speaking Flanders was predominantly agricultural with some industry, mainly processing agricultural products and textiles. This disparity began to fade during the interwar period. When Belgium emerged from World War II with its industrial infrastructure relatively undamaged thanks to the Galopin doctrine, the stage was set for a period of rapid development, particularly in Flanders. The postwar boom years, enhanced by the establishment of the European Union and NATO headquarters in Brussels, contributed to the rapid expansion of light industry throughout most of Flanders, particularly along a corridor stretching between Brussels and Antwerp, which is the second largest port in Europe after Rotterdam.

Foreign investment contributed significantly to Belgian economic growth in the 1960s. In particular, U.S. firms played a leading role in the expansion of light industrial and petrochemical industries in the 1960s and 1970s.

The older, traditional industries of Wallonia, particularly steel industry, began to lose their competitive edge during this period, but the general growth of world prosperity masked this deterioration until the 1973 and 1979 oil price shocks and resultant shifts in international demand sent the economy into a period of prolonged recession. In the 1980s and 1990s, the economic center of the country continued to shift northwards to Flanders with investments by multinationals (Automotive industry, Chemical industry) and a growing local Industrial agriculture (textiles, food).

The early 1980s saw the country facing a difficult period of structural adjustment caused by declining demand for its traditional products, deteriorating economic performance, and neglected structural reform. Consequently, the 1980-82 recession shook Belgium to the core—unemployment mounted, social welfare costs increased, personal debt soared, the government deficit climbed to 13% of GDP, and the national debt, although mostly held domestically, mushroomed.

Against this grim backdrop, in 1982, Prime Minister Martens' center-right coalition government formulated an economic recovery program to promote export-led growth by enhancing the competitiveness of Belgium's export industries through an 8.5% devaluation. Economic growth rose from 2% in 1984 to a peak of 4% in 1989. In May 1990, the government linked the Belgian franc to the Deutsche Mark, primarily through closely tracking German interest rates. Consequently, as German interest rates rose after 1990, Belgian rates have increased and contributed to a decline in the economic growth rate. In 1992-93, the Belgian economy suffered the worst recession since World War II, with the real GDP declining 1.7% in 1993. A boost in business investment and exports provided the economy's impetus for recovery.

On May 1, 1998, Belgium became a first-tier member of the European Monetary Union. Belgium switched from the Belgian franc to the Euro as its currency after January 1, 2002. Belgian per capita GDP ranks among the world's highest. In 2008, the per capita income (PPP) was $37,500. The federal government has managed to present balanced budgets in recent years, but public debt remains high, at 99% of 2009 GDP. GDP growth in 2009 was negative at -1.5%.

While the standard Belgian euro coins designated for circulation show the portrait of King Albert II, this does not happen for commemorative coins, where designs are freely chosen.

Trade

About 80% of Belgium's trade is with fellow EU member states. Given this high percentage, it seeks to diversify and expand trade opportunities with non-EU countries. The Belgian authorities are, as a rule, anti-protectionist and try to maintain a hospitable and open trade and investment climate. The European Commission negotiates on trade issues for all member states, which, in turn lessens bilateral trade disputes with Belgium.

The Belgian Government encourages new foreign investment as a means to promote employment. With regional devolution, Flanders, Brussels, and Wallonia are now courting potential foreign investors and offer a host of incentives and benefits.Foreign companies in Belgium account for approximately 11% of the total work force, with the U.S. share at about 5%. Attracted by the EU 1992 single-market program, many foreign firms and lawyers have settled in Brussels since 1989.

Employment

The social security system, which expanded rapidly during the prosperous 1950s and 1960s, includes a medical system, unemployment insurance coverage, child allowances, invalid benefits, and other benefits and pensions. With the onset of a recession in the 1970s, this system became an increasing burden on the economy and accounted for much of the government budget deficits. The national unemployment figures mask considerable differences between Flanders and Wallonia. Unemployment in Wallonia is mainly structural, while in Flanders it is cyclical. Flanders' unemployment level equals only half that of Wallonia. The southern region continues a difficult transition out of sunset industries (mainly coal and steel), while sunrise industries (chemicals, high-tech, and services) dominate in Flanders.

Belgium's unemployment rate was 6.5% in 2008. A total of 4.99 million people make up Belgium's labor force. The majority of these people (73%) work in the service sector. Belgian industry claims 25% of the labor force and agriculture only 2%. As in other industrialized nations, pension and other social entitlement programs have become a major concern as the baby boom generation approaches retirement.

Budget

Evolution of the Belgian public debt as % of Belgian GDP.

Although Belgium is a wealthy country, public expenditures far exceeded income for many years, and taxes were not diligently pursued. The Belgian Government reacted with poor macroeconomic policies to the 1973 and 1979 oil price hikes by hiring the redundant work force into the public sector and subsidizing industries like coal, steel, textiles, glass, and shipbuilding, which had lost their international competitive edge. As a result, cumulative government debt reached 121% of GDP by the end of the 1980s. However, thanks to Belgium's high personal savings rate, the Belgian Government financed the deficit from mainly domestic savings, minimizing the deleterious effects on the overall economy.

The federal government ran a 7.1% budget deficit in 1992 at the time of the EU's Treaty of Maastricht, which established conditions for Economic and Monetary Union (EMU) that led to adoption of the common Euro currency on January 1, 2002. Among other criteria spelled out under the Maastricht treaty, the Belgian Government had to attain a budget deficit of no greater than 3% of GDP by the end of 1997; Belgium achieved this, with a total budget deficit in 2001 (just prior to implementation of the Euro) that amounted to 0.2% of GDP. The government has balanced the budget every year since, until 2009 where it ran a deficit of about $25 billion. Belgium's accumulated public debt remains high at 99% of 2009 GDP.

Regional differences

The economy of Belgium is varied and cannot be understood without taking the regional differences into account. Indeed, Flemish and Walloon economies differ in many respects (consider for instance Eurostats and OECD statistics), and cities like Brussels, Antwerp, Liège, Bruges, Charleroi or Ghent also exhibit significant differences. In general, productivity in Flanders is roughly 20% higher (per inhabitant) than in Wallonia. Brussels' GDP per capita is much higher than either region, although this is in many ways artificial, as many of those that work in the Brussels-Capital Region live in Flanders or Wallonia. Their output is counted in Brussels and not where they live, artificially raising the per capita GDP of Brussels and slightly lowering that of Flanders and Wallonia.

Unemployment has remained consistently more than twice as high in Wallonia than in Flanders, and even more in Brussels, during most of the last 20 years (2009, Flanders: 5.0% ; Wallonia: 11.2% and Brussels: 15.9%)

Gross Domestic Product in Belgium (2006)

Rank NUTS region 2006 GDP (PPP)

per capita

in Euros % of the average GDP

of EU27 in 2006

1 Brussels 55,100 233.3

2 Flemish Region 27,900 118.0

3 Walloon Region 20,100 85.1

Brussels

Being the de facto European capital, its economy is massively service-oriented. It has a number of regional headquarters of multinational corporations. It is also host to a great number of European institutions, in addition to the Belgian federal government, the government of the Flemish Community and the government of the French Community. Brussels also has many commuters, with 230,000 coming from Flanders, and 130,000 from Wallonia. Much of the success of Brussels is based on the high educational skills of its workforce.

Flanders

A container terminal in the port of Antwerp

The port of Antwerp was in 2004 the second largest European sea port by cargo volume, and the Antwerp freight railway station accounts for one-third of Belgian freight traffic. Antwerp is the first diamond market in the world, diamond exports account for roughly 1/10th of Belgian exports. The Antwerp-based BASF plant is the largest BASF-base outside Germany, and accounts on its own for +/- 2% of Belgian exports. Other industrial and service activities include car manufacturing, telecommunications, photographic products.

The port of Bruges-Zeebrugge is one of the most important, modern and fastest growing ports in Europe. It is Europe's largest port for RoRo traffic and natural gas. It also is the world's largest port for the import and export of new vehicles. Tourism is also a major component of the economy of Bruges. Due to its pristine medieval city centre, Bruges has become a popular tourist destination. Annually about 2.5 million day tourists visit the city and in 2007 there were about 1.4 million overnight stays.

The port of Ghent, in the north of the city, is the third largest port of Belgium. It is accessed by the Ghent-Terneuzen Canal, which ends near the Dutch port of Terneuzen on the Western Scheldt. The port houses, among others, big companies like Arcelor Gent, Volvo Cars, Volvo Trucks, Volvo Parts, Honda, and Stora Enso. The Ghent University, the second largest university of Belgium by number of students, and a number of research oriented companies are situated in the central and southern part of the city. Tourism is increasingly becoming a major employer in the local area. Begonias have been cultivated in the Ghent area since 1860. Belgium is the world's largest producer of begonias, planting 60 million tubers per year. Eighty percent of the crop is exported.

Wallonia

In the past, Liège was one of the most important steel-making centres in Europe. Starting in 1817, John Cockerill extensively developed the iron and steel industry. The industrial complex of Seraing was the largest in the world. Although now a shadow of its former self, steel production and the manufacture of steel goods remain important.

Liège has also been an important centre for gunsmithing since the Middle ages and the arms industry is still strong with the headquarters of FN Herstal. The economy of the region is now diversified, the most important centers are mechanical industries (aircraft engine and Spacecraft propulsion), space technology, information technology, biotechnology and also production of water, beer or chocolate. Liège Science Park south east of the city, near the University of Liège campus, houses spin-offs and high technology businesses. Liège is also a very important llogistic center: the city possesses the third largest river port in Europe, directly connected to Antwerp, Rotterdam and Germany via the Meuse river and the Albert Canal. In 2006 Liège Airport was the 8th most important cargo airport in Europe. A new passenger terminal was opened in 2005. It is also the main hub and the headquarter of TNT Airways.

Charleroi features an industrial area, iron and steel industry, glassworks, chemicals, and electrical engineering. Charleroi is in the center of a vast coal basin, called Pays noir. Many slag heaps still surround the city. Charleroi is also known for its publishing industry with Dupuis, one of the main publishers of Franco-Belgian comics, located in Marcinelle.

(source:wikipedia)

Economy of Finland

Finland has a highly industrialized, mixed economy with a per capita output equal to that of other western economies such as France, Germany, Sweden or the United Kingdom. The largest sector of the economy is services at 65.7 percent, followed by manufacturing and refining at 31.4 percent. Primary production is 2.9 percent. With respect to foreign trade, the key economic sector is manufacturing. The largest industries are electronics (21.6 percent), machinery, vehicles and other engineered metal products (21.1 percent), forest industry (13.1 percent), and chemicals (10.9 percent). Finland has timber and several mineral and freshwater resources. Forestry, paper factories, and the agricultural sector (on which taxpayers spend around 2 billion euro annually) are politically sensitive to rural residents. The Greater Helsinki area generates around a third of GDP. In a 2004 OECD comparison, high-technology manufacturing in Finland ranked second largest after Ireland. Knowledge-intensive services have also ranked the smallest and slow-growth sectors – especially agriculture and low-technology manufacturing – second largest after Ireland. Investment was below expected.Overall short-term outlook was good and GDP growth has been above many EU peers. Finland has the 4th largest knowledge economy in Europe, behind Sweden, Denmark and the UK.

Finland is highly integrated in the global economy, and international trade is a third of GDP. The European Union makes 60 percent of the total trade.The largest trade flows are with Germany, Russia, Sweden, United Kingdom, USA, Netherlands and China. Trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture. Finland is the only Nordic country to have joined the Eurozone.

History

Finland started out as a relatively poor country that was vulnerable to shocks to the economy such as the great famine of the 1860s. Until the 1930s, the Finnish economy was predominantly agrarian, and, as late as in the 1950s, more than half the population and 40 percent of output were still in the primary sector.

After World War II

Property rights were strong. While nationalization committees were set up in France and the United Kingdom, Finland avoided nationalizations. After failed experiments with protectionism, Finland eased restrictions and made a free trade agreement with the European Community in 1973, making its markets more competitive. Local education markets expanded and an increasing number of Finns also went abroad to study in the United States or Western Europe, bringing back advanced skills. There was a quite common, but pragmatic-minded, credit and investment cooperation by state and corporations, though it was considered with suspicion. Support for capitalism was widespread. Savings rate hovered among the world's highest, at around 8% until the 80s. In the beginning of the 1970s, Finland's GDP per capita reached the level of Japan and the UK. Finland's economic development shared many aspects with export-led Asian countries.

In 1991 the Finnish economy fell into recession. This was caused by a combination of economic overheating, depressed markets with key trading partners (particularly the Swedish and Soviet markets) as well as local markets, slow growth with other trading partners, and the disappearance of the Soviet barter system. Stock market and housing prices declined by 50%. The growth in the 1980s was based on debt, and when the defaults began rolling in, GDP declined by 13% and unemployment increased from a virtual full employment to one fifth of the workforce. The crisis was amplified by trade unions' initial opposition to any reforms. Politicians struggled to cut spending and the public debt doubled to around 60% of GDP. Much of the economic growth in the 1980s was based on debt financing, and the debt defaults led to a savings and loan crisis. Total of over 10 billion euro were used to bail out failing banks, which led to banking sector consolidation. After devaluations the depression bottomed out in 1993.

Liberalization

Like other Nordic countries, Finland has modified its system of economic regulation since late 1980s. Financial and product market regulations were modified. Some state enterprises were privatized and some tax rates were altered. However, unlike Denmark, Finland has not adopted polices such as a basic income or negative income tax.

European Union

Finland joined the European Union in 1995. The central bank was given an inflation-targeting mandate until Finland joined eurozone. The growth rate has since been one of the highest of OECD countries and Finland has topped many indicators of national performance.

Finland was one of the 11 countries joining the third phase of the Economic and Monetary Union of the European Union, adopting the euro as the country's currency, on 1 January 1999. The national currency markka (FIM) was withdrawn from circulation and replaced by the euro (EUR) at the beginning of 2002.

Agriculture

Finland's climate and soils make growing crops a particular challenge. The country lies between 60° and 70° north latitude - as far north as Alaska - and has severe winters and relatively short growing seasons that are sometimes interrupted by frosts. However, because the Gulf Stream and the North Atlantic Drift Current moderate the climate, Finland contains half of the world's arable land north of 60° north latitude. Annual precipitation is usually sufficient, but it occurs almost exclusively during the winter months, making summer droughts a constant threat. In response to the climate, farmers have relied on quick-ripening and frost-resistant varieties of crops, and they have cultivated south-facing slopes as well as richer bottomlands to ensure production even in years with summer frosts. Most farmland had originally been either forest or swamp, and the soil had usually required treatment with lime and years of cultivation to neutralize excess acid and to develop fertility. Irrigation was generally not necessary, but drainage systems were often needed to remove excess water.

Until the late nineteenth century, Finland's isolation required that most farmers concentrate on producing grains to meet the country's basic food needs. In the fall, farmers planted rye; in the spring, southern and central farmers started oats, while northern farmers seeded barley. Farms also grew small quantities of potatoes, other root crops, and legumes. Nevertheless, the total area under cultivation was still small. Cattle grazed in the summer and consumed hay in the winter. Essentially self-sufficient, Finland engaged in very limited agricultural trade.

This traditional, almost autarkic, production pattern shifted sharply during the late nineteenth century, when inexpensive imported grain from Russia and the United States competed effectively with local grain. At the same time, rising domestic and foreign demand for dairy products and the availability of low-cost imported cattle feed made dairy and meat production much more profitable. These changes in market conditions induced Finland's farmers to switch from growing staple grains to producing meat and dairy products, setting a pattern that persisted into the late 1980s.

In response to the agricultural depression of the 1930s, the government encouraged domestic production by imposing tariffs on agricultural imports. This policy enjoyed some success: the total area under cultivation increased, and farm incomes fell less sharply in Finland than in most other countries. Barriers to grain imports stimulated a return to mixed farming, and by 1938 Finland's farmers were able to meet roughly 90 percent of the domestic demand for grain.

The disruptions caused by the Winter War and the Continuation War caused further food shortages, especially when Finland ceded territory, including about one-tenth of its farmland, to the Soviet Union. The experiences of the depression and the war years persuaded the Finns to secure independent food supplies to prevent shortages in future conflicts.

After the war, the first challenge was to resettle displaced farmers. Most refugee farmers were given farms that included some buildings and land that had already been in production, but some had to make do with "cold farms," that is, land not in production that usually had to be cleared or drained before crops could be sown. The government sponsored large-scale clearing and draining operations that expanded the area suitable for farming. As a result of the resettlement and land-clearing programs, the area under cultivation expanded by about 450,000 hectares, reaching about 2.4 million hectares by the early 1960s. Finland thus came to farm more land than ever before, an unusual development in a country that was simultaneously experiencing rapid industrial growth.

During this period of expansion, farmers introduced modern production practices. The widespread use of modern inputs—chemical fertilizers and insecticides, agricultural machinery, and improved seed varieties—sharply improved crop yields. Yet the modernization process again made farm production dependent on supplies from abroad, this time on imports of petroleum and fertilizers. By 1984 domestic sources of energy covered only about 20 percent of farm needs, while in 1950 domestic sources had supplied 70 percent of them. In the aftermath of the oil price increases of the early 1970s, farmers began to return to local energy sources such as firewood. The existence of many farms that were too small to allow efficient use of tractors also limited mechanization. Another weak point was the existence of many fields with open drainage ditches needing regular maintenance; in the mid-1980s, experts estimated that half of the cropland needed improved drainage works. At that time, about 1 million hectares had underground drainage, and agricultural authorities planned to help install such works on another million hectares. Despite these shortcomings, Finland's agriculture was efficient and productive—at least when compared with farming in other European countries.

Forestry

Forests play a key role in the country's economy, making it one of the world's leading wood producers and providing raw materials at competitive prices for the crucial wood-processing industries. As in agriculture, the government has long played a leading role in forestry, regulating tree cutting, sponsoring technical improvements, and establishing long-term plans to ensure that the country's forests continue to supply the wood-processing industries.

Finland's wet climate and rocky soils are ideal for forests. Tree stands do well throughout the country, except in some areas north of the Arctic Circle. In 1980 the forested area totaled about 19.8 million hectares, providing 4 hectares of forest per capita—far above the European average of about 0.5 hectares. The proportion of forest land varied considerably from region to region. In the central lake plateau and in the eastern and northern provinces, forests covered up to 80 percent of the land area, but in areas with better conditions for agriculture, especially in the southwest, forests accounted for only 50 to 60 percent of the territory. The main commercial tree species—pine, spruce, and birch—supplied raw material to the sawmill, pulp, and paper industries. The forests also produced sizable aspen and elder crops.

The heavy winter snows and the network of waterways were used to move logs to the mills. Loggers were able to drag cut trees over the winter snow to the roads or water bodies. In the southwest, the sledding season lasted about 100 days per year; the season was even longer to the north and the east. The country's network of lakes and rivers facilitated log floating, a cheap and rapid means of transport. Each spring, crews floated the logs downstream to collection points; tugs towed log bundles down rivers and across lakes to processing centers. The waterway system covered much of the country, and by the 1980s Finland had extended roadways and railroads to areas not served by waterways, effectively opening up all of the country's forest reserves to commercial use.

Forestry and farming were closely linked. During the twentieth century, government land redistribution programs had made forest ownership widespread, allotting forestland to most farms. In the 1980s, private farmers controlled 35 percent of the country's forests; other persons held 27 percent; the government, 24 percent; private corporations, 9 percent; and municipalities and other public bodies, 5 percent. The forestlands owned by farmers and by other people—some 350,000 plots—were the best, producing 75 to 80 percent of the wood consumed by industry; the state owned much of the poorer land, especially that in the north.

The ties between forestry and farming were mutually beneficial. Farmers supplemented their incomes with earnings from selling their wood, caring for forests, or logging; forestry made many otherwise marginal farms viable. At the same time, farming communities maintained roads and other infrastructure in rural areas, and they provided workers for forest operations. Indeed, without the farming communities in sparsely populated areas, it would have been much more difficult to continue intensive logging operations and reforestation in many prime forest areas.

The Ministry of Agriculture and Forestry has carried out forest inventories and drawn up silvicultural plans. According to surveys, between 1945 and the late 1970s foresters had cut trees faster than the forests could regenerate them. Nevertheless, between the early 1950s and 1981, Finland was able to boost the total area of its forests by some 2.7 million hectares and to increase forest stands under 40 years of age by some 3.2 million hectares. Beginning in 1965, the country instituted plans that called for expanding forest cultivation, draining peatland and waterlogged areas, and replacing slow-growing trees with faster-growing varieties. By the mid-1980s, the Finns had drained 5.5 million hectares, fertilized 2.8 million hectares, and cultivated 3.6 million hectares. Thinning increased the share of trees that would produce suitable lumber, while improved tree varieties increased productivity by as much as 30 percent.

Comprehensive silvicultural programs had made it possible for the Finns simultaneously to increase forest output and to add to the amount and value of the growing stock. By the mid-1980s, Finland's forests produced nearly 70 million cubic meters of new wood each year, considerably more than was being cut. During the postwar period, the annual cut increased by about 120 percent to about 50 million cubic meters. Wood burning fell to one-fifth the level of the immediate postwar years, freeing up wood supplies for the wood-processing industries, which consumed between 40 million and 45 million cubic meters per year. Indeed, industry demand was so great that Finland needed to import 5 million to 6 million cubic meters of wood each year.

To maintain the country's comparative advantage in forest products, Finnish authorities moved to raise lumber output toward the country's ecological limits. In 1984 the government published the Forest 2000 plan, drawn up by the Ministry of Agriculture and Forestry. The plan aimed at increasing forest harvests by about 3 percent per year, while conserving forestland for recreation and other uses. It also called for enlarging the average size of private forest holdings, increasing the area used for forests, and extending forest cultivation and thinning. If successful, the plan would make it possible to raise wood deliveries by roughly one-third by the end of the twentieth century. Finnish officials believed that such growth was necessary if Finland was to maintain its share in world markets for wood and paper products.

Industry

From the 1990s, Finnish industry, which for centuries had relied on the country's vast forests, became dominated by to a larger extent by electronics and services, as globalization lead to a decline of more traditional industries. Outsourcing resulted in more manufacturing being transferred abroad, with Finnish-based industry focusing to a greater extent on R&D and hi-tech electronics.

Electronics

The Finnish electronics and electrotechnics industry relies on heavy investment in R&D, and has been accelerated by the liberalisation of global markets. Electrical engineering started in the late 19th century with generators and electric motors built by Gottfried Strömberg, now part of the ABB Group. Other Finnish companies – such as Instru, Vaisala and Neles (now part of Metso) - have succeeded in areas such as industrial automation, medical and meteorological technology. Nokia is a world leader in mobile telecommunications.

Metals, engineering and manufacturing

Finland has an abundance of minerals, but many large mines have closed down, and most raw materials are now imported. For this reason, companies now tend to focus on high added-value processing of metals. The exports include the production steel, copper, zinc and nickel, and finished products such as steel roofing and cladding, welded steel pipes, copper pipe and coated sheets. Outokumpu is known for developing the flash smelting process for copper production and stainless steel.

The manufacturing industry is a significant employer of about 400,000 people 

Chemical industry

The chemical industry is one of the Finland's largest industrial sectors with its roots in tar making in the 17th century. It produces an enormous range of products for the use of other industrial sectors, especially for forestry and agriculture. In addition, its produces plastics, chemicals, paints, oil products, pharmaceuticals, environmental products, Biotech products and petrochemicals. Biotechnology is regarded as one of the most promising high-tech sectors in Finland and it is growing rapidly.

Pulp and paper industry

Forest products has been the major export industry in the past, but diversification and growth of the economy has reduced its share. In the 1970s, the pulp and paper industry accounted for half of Finnish exports. Although this share has shrank, pulp and paper is still a major industry with 52 sites across the country. Furthermore, several of large international corporations in this business are based in Finland. Stora Enso and UPM were placed #1 and #3 by output in the world, both producing more than ten million tons. M-real and Myllykoski also appear on the top 100 list.

Energy industry

Finland's energy supply is divided as follows: nuclear power - 26%, net imports - 20%, hydroelectric power - 16%, combined production district heat - 18%, combined production industry - 13%, condensing power - 6%. One half of all the energy consumed in Finland goes to industry, one fifth to heating buildings and one fifth to transport. Lacking indigenous fossil fuel resources, Finland has been an energy importer.

Companies

Aleksanterinkatu, a commercial street.

Notable companies in Finland include Nokia, the market leader in mobile telephony; Stora Enso, the largest paper manufacturer in the world; Neste Oil, an oil refining and marketing company; UPM-Kymmene, the third largest paper manufacturer in the world; Aker Finnyards, the manufacturer of the world's largest cruise ships (such as Royal Caribbean's Freedom of the Seas); KONE, a manufacturer of elevators and escalators; Wärtsilä, a producer of power plants and ship engines; and Finnair, the largest Helsinki-Vantaa based international airline. Finland has sophisticated financial markets comparable to UK in efficiency. Though foreign investment is as not high as some other European countries, the largest foreign-headquartered companies included names such as ABB, Tellabs, Carlsberg, and Siemens.

Around 70-80% of the equity quoted on the Helsinki Stock Exchange is owned by foreign-registered entities. The larger companies get most of their revenue from abroad, and the majority of their employees work outside the country. Cross-shareholding and other uncompetitive practices have been abolished and there is a trend towards an Anglo-Saxon style of corporate governance. However, only around 15% of residents had invested in stock market, compared to 20% in France, and 50% in the US.

Between 2000-2003, early stage venture capital investments relative to GDP were 8.5 percent against 4 percent in the EU and 11.5 in the US. Later stage investments fell to the EU median. Invest in Finland and other programs attempt to attract investment. In 2000 FDI from Finland to overseas was 20 billion euro and from overseas to Finland 7 billion euro. Acquisitions and mergers have internationalized business in Finland.

Household income and consumption

Finland's income is generated by the approximately 1.8 million private sector workers, who make an average 25.1 euro per hour (before the median 60% tax wedge) in 2007. In 2003 residents worked on average around 10 years for the same employer and around 5 jobs in lifetime. 62 percent worked for small and medium-size enterprises. Female employment rate was high and gender segregation on career choices was higher than in the US. In 1999 part-time work rate was one of the smallest in OECD.

Future liabilities are dominated by the pension deficit. Unlike in Sweden, where pension savers can manage their investments, in Finland employer chooses a pension fund for the employee. The pension funding rate is higher than in most Western European countries, but still only a portion of is funded and pensions exclude health insurances and other unaccounted promises. Directly held public debt has been reduced to around 32 percent in 2007. In 2007, the average household savings rate was -3.8 and household debt 101 percent of annual disposable income, a typical level in Europe.

In 2008, the OECD reported that "the gap between rich and poor has widened more in Finland than in any other wealthy industrialized country over the past decade" and that "Finland is also one of the few countries where inequality of incomes has grown between the rich and the middle-class, and not only between rich and poor." 

In 2006, there were 2,381,500 households of average size 2.1 people. Forty percent of households consisted of single person, 32 percent two and 28 percent three or more. There were 1.2 million residential buildings in Finland and the average residential space was 38 square metres per person. The average residential property (without land) cost 1,187 euro per square metre (without land) and residential land on 8.6 euro per square metre. Consumer energy prices were 8-12 euro cent per kilowatt hour. 74 percent of households had a car. There were 2.5 million cars and 0.4 other vehicles. Around 92 percent has mobile phone and 58 percent Internet connection at home. The average total household consumption was 20,000 euro, out of which housing at around 5500 euro, transport at around 3000 euro, food and beverages excluding alcoholic at around 2500 euro, recreation and culture at around 2000 euro. Upper-level white-collar households (409,653) consumed an average 27,456 euro, lower-level white-collar households (394,313) 20,935 euro, and blue-collar households (471,370) 19,415 euro.

Unemployment

Unemployment rate was 6.8% and employment rate 69% in early 2008. The unemployment security benefits for those seeking employment are at an average OECD level. The labor administration funds labor market training for unemployed job seekers, which is often vocational. The aim of the training is to improve the channels of finding employment. Very much like in Sweden, the government is often accused (often by foreigners, especially in Anglo-Saxon countries) of "cleaning the unemployment statistics" by vocational training programmes.

Public policy

 Nordic model

Finnish politicians have often emulated other Nordics and the Nordic model.Nordics have been free-trading and relatively welcoming to skilled migrants for over a century, though in Finland immigration is a relatively new phenomenon. This is due largely to Finland's less hospitable climate and the fact that the Finnish language shares roots with none of the major world languages, making it more challenging than average for most to learn. The level of protection in commodity trade has been low, except for agricultural products.

As an economic environment, Finland's judiciary is efficient and effective. Finland is highly open to investment and free trade. Finland has top levels of economic freedom in many areas, although there is a heavy tax burden and inflexible job market. Finland is ranked 16th (ninth in Europe) in the 2008 Index of Economic Freedom. Recently, Finland has topped the patents per capita statistics, and overall productivity growth has been strong in areas such as electronics. While the manufacturing sector is thriving, OECD points out that the service sector would benefit substantially from policy improvements. The IMD World Competitiveness Yearbook 2007 ranked Finland 17th most competitive, next to Germany, and lowest of the Nordics. while the World Economic Forum report has ranked Finland the most competitive country. Finland is one of the most fiscally responsible EU countries.

Product market

Economists attribute much growth to reforms in the product markets. According to OECD, only four EU-15 countries have less regulated product markets (UK, Ireland, Denmark and Sweden) and only one has less regulated financial markets (Denmark). Nordic countries were pioneers in liberalizing energy, postal, and other markets in Europe. The legal system is clear and business bureaucracy less than most countries. For instance, starting a business takes an average of 14 days, compared to the world average of 43 days and Denmark's average of 6 days. Property rights are well protected and contractual agreements are strictly honored. Finland is rated one of the least corrupted countries in Corruption Perceptions Index. Finland is rated 13th in the Ease of Doing Business Index. It indicates exceptional ease to trade across borders (5th), enforce contracts (7th), and close a business (5th), and exceptional hardship to employ workers (127th) and pay taxes (83rd).

Job market

According to the OECD, Finland's job market is the least flexible of the Nordic countries. Finland increased job market regulation in the 1970s to provide stability to manufacturers. In contrast, during the 90s, Denmark liberalized its job market, Sweden moved to more decentralized contracts, whereas Finnish trade unions blocked many reforms. Many professions have legally recognized industry-wide contracts that lay down common terms of employment including seniority levels, holiday entitlements, and salary levels, usually as part of a Comprehensive Income Policy Agreement. Some[weasel words] consider these agreements to be bureaucratic, inflexible, and, along with tax rates, a key contributor to unemployment and distorted prices. Possibly it may also slow down structural change as there are fewer incentives to acquire better skills, although Finland already enjoys one of the highest skill-levels in the world.

Taxation

 Taxation in Finland

Tax is collected mainly from municipal income tax, state income tax, state value added tax, customs fees, corporate taxes and special taxes. There are also property taxes, but municipal income tax pays most of municipal expenses. Taxation is conducted by a state agency, Verohallitus, which collects income taxes from each paycheck, and then pays the difference between tax liability and taxes paid as tax rebate or collects as tax arrears afterward. Municipal income tax is a flat tax of nominally 16-20%[citation needed], with deductions applied, and is paid directly to the municipality (a city or rural locality). The state income tax is a progressive tax; low-income individuals do not necessarily pay any. The state transfers some of its income as state support to municipalities, particularly the poorer ones. Additionally, the state churches - Finnish Evangelical Lutheran Church and Finnish Orthodox Church - are integrated to the taxation system in order to tax their members.

The middle income worker's tax wedge is 46% (NationMaster) and effective marginal tax rates are very high. Value-added tax is 23% for most items. Capital gains tax is 28% and corporate tax is 26%, about the EU median. Property taxes are low, but there is a transfer tax (1.6% for apartments or 4% for individual houses) for home buyers.Alcoholic beverages are separately taxed and highly restricted. For instance, McKinsey estimates that a worker has to pay around 1600 euro for another's 400 euro service - restricting service supply and demand - though some taxation is avoided in the black market and self-service culture. Another study by Karlson, Johansson & Johnsson estimates that the percentage of the buyer’s income entering the service vendor’s wallet (inverted tax wedge) is slightly over 15%, compared to 10% in Belgium, 25% in France, 40% in Switzerland and 50% in the United States. Tax cuts have been in every post-depression government's agenda and the overall tax burden is now around 43% of GDP compared to 51.1% in Sweden, 34.7% in Germany, 33.5% in Canada, and 30.5% in Ireland.

State and municipal politicians have struggled to cut their consumption, which is very high at 51.7% of GDP compared to 56.6% in Sweden, 46.9 in Germany, 39.3 in Canada, and 33.5% in Ireland. Much of the taxes are spent on public sector employees, many of which are jobs-for-life and amount to 124,000 state employees and 430,000 municipal employees. That is 113 per 1000 residents (over a quarter of workforce) compared to 74 in the US, 70 in Germany, and 42 in Japan (8% of workforce). The Economist Intelligence Unit's ranking for Finland's e-readiness is high at 13th, compared to 1st for United States, 3rd for Sweden, 5th for Denmark, and 14th for Germany. Also, early and generous retirement schemes have contributed to high pension costs. Social spending such as health or education is around OECD median. Social transfers are also around OECD median. In 2001 Finland's outsourced proportion of spending was below Sweden's and above most other Western European countries. Finland's health care is more bureaucrat-managed than in most Western European countries, though many use private insurance or cash to enjoy private clinics. Some reforms toward more equal marketplace have been made in 2007-2008. In education, child nurseries, and elderly nurseries private competition is bottom-ranking compared to Sweden and most other Western countries. Some public monopolies such Alko remain, and are sometimes challenged by the European Union. The state has a programme where the number of jobs decreases by attrition: for two retirees, only one new employee is hired.

Occupational and income structure

Finland's export-dependent economy continuously adapted to the world market; in doing so, it changed Finnish society as well. The prolonged worldwide boom, beginning in the late 1940s and lasting until the first oil crisis in 1973, was a challenge that Finland met and from which it emerged with a highly sophisticated and diversified economy, including a new occupational structure. Some sectors kept a fairly constant share of the work force. Transportation and construction, for example, each accounted for between 7 and 8 percent in both 1950 and 1985, and manufacturing's share rose only from 22 to 24 percent; however, both the commercial and the service sectors more than doubled their share of the work force, accounting, respectively, for 21 and 28 percent in 1985. The greatest change was the decline of the economically active population employed in agriculture and forestry, from approximately 50 percent in 1950 to 10 percent in 1985. The exodus from farms and forests provided the manpower needed for the growth of other sectors.

Studies of Finnish mobility patterns since World War II have confirmed the significance of this exodus. Sociologists have found that people with a farming background were present in other occupations to a considerably greater extent in Finland than in other West European countries. Finnish data for the early 1980s showed that 30 to 40 percent of those in occupations not requiring much education were the children of farmers, as were about 25 percent in upper-level occupations, a rate two to three times that of France and noticeably higher than that even of neighboring Sweden. Finland also differed from the other Nordic countries in that the generational transition from the rural occupations to white-collar positions was more likely to be direct, bypassing manual occupations.

The most important factor determining social mobility in Finland was education. Children who attained a higher level of education than their parents were often able to rise in the hierarchy of occupations. A tripling or quadrupling in any one generation of the numbers receiving schooling beyond the required minimum reflected the needs of a developing economy for skilled employees. Obtaining advanced training or education was easier for some than for others, however, and the children of whitecollar employees still were more likely to become white-collar employees themselves than were the children of farmers and bluecollar workers. In addition, children of white-collar professionals were more likely than not to remain in that class.

The economic transformation also altered income structure. A noticeable shift was the reduction in wage differentials. The increased wealth produced by an advanced economy was distributed to wage earners via the system of broad income agreements that evolved in the postwar era. Organized sectors of the economy received wage hikes even greater than the economy's growth rate. As a result, blue-collar workers' income came, in time, to match more closely the pay of lowerlevel white-collar employees, and the income of the upper middle class declined in relation to that of other groups.

The long trend of growth in living standards paired with diminishing differences between social classes was dramatically reversed during the 1990s. For the first time in the history of Finland income differences have sharply grown. This change has been mostly driven by the growth of income from capital to the wealthiest segment of the population.

(source:wikipedia)

Economy of Argentina

Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Historically, however, Argentina's economic performance has been very uneven, in which high economic growth alternated with severe recessions, particularly during the late twentieth century. Early in the twentieth century it was one of the richest countries in the world and the richest in the Southern hemisphere, though it is now an upper-middle income country. Argentina is considered an emerging economy by the FTSE Global Equity Index, and is one of the G-20 major economies.

Natural resources

 Agriculture in Argentina and Mining in Argentina

View of pampas soy fields. Though Argentina is now an industrial and service economy, agriculture still earns more than half the foreign exchange.

Argentina is one of the world's major agricultural producers, ranking among the top producers and, in most of the following, exporters of citrus fruit, grapes, honey, maize, sorghum, soybeans, squash, sunflower seeds, wheat, and yerba mate. Agriculture accounted for 7.5% of GDP in 2009, and nearly one fifth of all exports (not including processed food and feed, which are another third). Soy and its byproducts, mainly animal feed and vegetable oils, are major export commodities at 24% of the total. Wheat, maize, sorghum and other cereals totaled 8%.Cattle-raising is also a major industry, though mostly for domestic consumption; beef, leather and dairy were 5% of total exports. Sheep-raising and wool are important in Patagonia, though these activities have declined by half since 1990.

Fruits and vegetables made up 4% of exports: apples and pears in the Río Negro valley; rice, oranges and other citrus in the northwest and Mesopotamia; grapes and strawberries in Cuyo (the west), and berries in the far south. Cotton and tobacco are major crops in the Gran Chaco, sugarcane and chile peppers in the northwest, and olives and garlic in the west. Yerba mate tea (Misiones), tomatoes (Salta) and peaches (Mendoza) are grown for domestic consumption. Argentina is the world's fifth-largest wine producer, and fine wine production has taken major leaps in quality. A growing export, total viticulture potential is far from having been met. Mendoza is the largest wine region, followed by San Juan.

Government police towards the lucrative agrarian sector is a subject of, at times, contentious debate in Argentina. A grain embargo by farmers protesting an increase in export taxes for their products began in March 2008, and, following a series of failed negotiations, strikes and lockouts largely subsided only with the July 16 defeat of the export tax-hike in the Senate.

Argentine fisheries bring in about a million tons of catch annually, and are centered around Argentine hake which makes up 50% of the catch, pollack, squid and centolla crab. Forestry has long history in every Argentine region, apart from the pampas, accounting for almost 14 million m³ of roundwood harvests.Eucalyptus, pine, and elm (for cellulose) are all widely harvested, mainly for domestic furniture, as well as paper products (1.5 million tons). Fisheries and logging each account for 2% of exports.

Around 35 million m³ each of petroleum and petroleum fuels are produced, as well as 50 billion m³ of natural gas, making the nation self-sufficient in these staples, and generating around 10% of exports. The most important oil fields lie in Patagonia and Cuyo. A network of pipelines (next to Mexico's, the second-longest in Latin America) send raw product to Bahía Blanca, center of the petrochemical industry, and to the La Plata-Buenos Aires-Rosario industrial belt.

Mining is a growing industry, increasing from 2% of GDP in 1980 to around 4% today. The northwest and San Juan Province are the main regions of activity. Coal is mined in Santa Cruz Province. Metals mined include copper, zinc, magnesium, sulfur, tungsten, uranium silver, and particularly, gold, whose production was boosted by recent investments from Barrick Gold in San Juan. Metal ore exports soared from US$ 200 million in 1996 to US$1.2 billion in 2004, and to over US$ 2 billion in 2007.

Industry

Tandanor shipyard, Buenos Aires

Petrochemical complex in Bahía Blanca

Manufacturing is the nation's largest single sector in the economy with 21% of GDP, and is well-integrated into Argentine agriculture, accounting for nearly two-thirds of exports in all, with half the nation's industrial exports being agricultural in nature.Leading sectors by production value are: food processing, chemicals and pharmaceuticals, motor vehicles, farming equipment and auto parts, iron, steel and aluminum, petroleum, as well as industrial machinery and home appliances. These latter include over three million big ticket items, as well as an array of electronics, kitchen appliances and cellular phones, among others. Beverages are another significant sector, and Argentina has long been among the top five wine producing countries in the world, though in 2000, beer overtook wine production, and today leads by nearly two billion liters a year to one.

Other manufactured goods include textiles and leather, plastics and tires, forestry products, publishing, cement, glass and tobacco products. Nearly half the industries are based in and around Buenos Aires, although Córdoba, Rosario, and Ushuaia are also significant industrial centers. Construction permits nationwide covered nearly 19 million m² (200 million ft²) in 2006. the construction sector accounts for 6% of GDP, and two-thirds of the construction was for residential buildings.

Argentina produces electricity in large part through well developed natural gas and hydroelectric resources. Nuclear energy is also of high importance, and the country is one of the largest producers and exporters, alongside Canada and Russia of cobalt-60, a radioactive isotope widely used in cancer therapy.

Service

The service sector is the biggest contributor to total GDP, accounting for over 60%. Argentina enjoys a diversified service sector, which includes well-developed social, corporate, financial, insurance, real estate, transport, communication services, and tourism.

The telecommunications sector has been growing at a fast pace, and the economy benefits from widespread access to mobile telephony (more than 75% of the population having access to mobile phones), Internet (more than 16 million people online), and broadband services. Regular telephone services with 9.5 million lines and mail services are robust.

Tourism is increasingly important and provided 8% of economic output (over US$25 billion) in 2008. Argentines, who have long been active travelers within their own country, accounted for over 80%, although an increasing number of international tourists (4.6 million visited Argentina in 2007) contributed US$4.3 billion that year. Stagnant for over two decades, domestic travel increased strongly in the last few years, and visitors are flocking to a country seen as affordable, exceptionally diverse, and safe.

Banking

Main article: Banking in Argentina

National Bank of Agentina, the nation's largest.

Argentine banking, whose deposits exceeded US$70 billion in February 2010,developed around public sector banks, but is now dominated by the private sector. The private sector banks account for most of the 85 active institutions (4,000 branches) and holds nearly 60% of deposits and loans, and there are as many foreign-owned banks as local ones. The largest bank in Argentina by far, however, has long been the public Banco de la Nación Argentina. Not to be confused with the Central Bank, this institution now accounts for about a fourth of the total deposits and a seventh of its loan portfolio.

During the 1990s, Argentina's financial system was consolidated and strengthened. Deposits grew from less than US$15 billion in 1991 to over US$80 billion in 2000, while outstanding credit (70% of it to the private sector) tripled to nearly US$100 billion.

The banks largely lent US dollars and took deposits in Argentine pesos, and when the peso lost most of its value in early 2002, many borrowers again found themselves hard pressed to keep up. Delinquencies tripled to about 37%. Over a fifth of deposits had been withdrawn by December 2001, when Economy Minister Domingo Cavallo imposed a near freeze on cash withdrawals. The lifting of the restriction a year later was bittersweet, being greeted calmly, if with some umbrage, at not having these funds freed at their full U.S. dollar value.Some fared worse, as owners of the now-defunct Velox Bank defrauded their clients of up to US$800 million.

Credit in Argentina is still relatively tight. Lending to the private sector has been increasing 40% a year since 2004, and deliquencies are down to 3%. Still, credit outstanding is, in real terms, about a fifth less than in 2000, and as a percent of GDP (less than 20%), quite low by international standards. The prime rate, which had hovered around 10% in the 1990s, hit 67% in 2002. Although it returned to normal levels quickly, inflation, and more recently, global instability have been affecting it again. The prime rate was over 20% for much of 2009, and 17% in the first half of 2010.

Partly a function of this and past instability, Argentines have historically held more deposits overseas than domestically. The estimated US$140 billion in overseas accounts and investment exceeded the domestic monetary base (M3) by nearly 50% in 2009.

Foreign trade

Main article: Foreign trade of Argentina

Argentine exports are fairly well diversified. However, although agricultural raw materials were only 15% of the total exports in 2009, agricultural goods including processed foods still account for 50% of exports. Soy products alone (soybeans, vegetable oil) account for almost one fourth of the total. Cereals, mostly maize and wheat, which were Argentina's leading export during much of the twentieth century, make up less than one tenth now.

Argentine exports since 1991, in billions of US dollars.

Industrial goods today account for a third of Argentine exports. The country exported over 322,000 motor vehicles in 2009, mostly to Brazil. Motor vehicles and auto parts are the leading industrial export, about 10% of the industrial exports. Chemicals, steel, aluminum, machinery, and plastics account for most of the remaining industrial exports.

A net energy importer until 1981, Argentina's fuel exports began increasing rapidly in the early 1990s and today account for about an eighth of the total. Refined fuels make up about half. Exports of crude petroleum and natural gas have recently been about around US$3 billion a year.

Argentine imports have historically been dominated by the need for industrial and technological supplies, machinery, and parts, which altogether amounted to US$29 billion in 2009, three-fourths of the total imports. Consumer goods including motor vehicles make up most of the rest. Trade in services, historically in deficit for Argentina, is currently balanced at around US$12 billion each way.

Investment

Direct investment in Argentina by the U.S. is mainly in telecommunications, energy, financial services, chemicals, food processing, and vehicle manufacturing. The U.S. direct investment in Argentina approached $16 billion at the end of 1999, according to the embassy estimates. Investments from Canada, Europe, Chile, and other countries have also been significant. In all, foreign nationals hold around US$80 billion in direct investment.

The recycled docklands at Puerto Madero are among the developments attracting foreign as well as local investment.

Brazil has, since 2000, also became an important investor in Argentine assets and Spanish companies in particular have entered the Argentine market aggressively, with major investments in the petroleum and gas, telecommunications, banking, and retail sectors. Several bilateral agreements play an important role in promoting U.S. private investment. Argentina has an Overseas Private Investment Corporation (OPIC) agreement and an active program with the U.S. Export-Import Bank. Under the 1994 U.S.-Argentina Bilateral Investment Treaty, U.S. investors enjoy national treatment in all sectors except shipbuilding, fishing, nuclear-power generation, and uranium production. The treaty allows for international arbitration of investment disputes.

Argentina attracted $3.4 billion in foreign direct investment (FDI) in 2006; as a percent of GDP, this FDI volume was below the Latin American average. Current Kirchner Administration policies and difficulty in enforcing contractual obligations had been blamed for this modest performance.A considerable improvement was recorded in 2007, however, when foreign nationals invested US$6.3 billion, and in 2009, despite an adverse international climate, around US$5 billion.

Production and other statistics

A collector's 1951 Justicialist. This was the first car wholly designed and manufactured in Argentina.

Argentine harvests of grains and oilseeds, 1992-2007, in millions of metric tons.

Yacyretá hydroelectric dam in northeastern Argentina. Hydropower has helped Argentina lessen its dependency on fossil fuels.

View of the Argentine grain belt in the Province of Buenos Aires.

Investment (domestic, physical): US$64 billion, 20.6% of GDP (2009)

Household income or consumption by percentage share:

lowest 10%: 1.2%

highest 10%: 35.2%

Motor vehicles: 9.5 million active registrations (one per 4.2 people)

Agriculture - products (metric tons, 2008): soy (46.2 M), maize (21.3 M), sugarcane (20.5 M), wheat (16.3 M), sunflower seeds (4.6 M), citrus fruit (3.2 M), sorghum (2.9 M), grapes (2.8 M), potatoes (2.6 M), barley (1.5 M), apples (1.2 M), rice (1.2 M), green tea and yerba mate (1.1 M).

Meats: beef, 3.4 M; poultry, 1.5 M; seafood 0.7 M; pork, 0.3 M.

Industrial production: Value added (after taxes), US$60 billion; growth rate, 0.1% (2009).

Distribution by sector (2007): food, beverages and tobacco, 20.4%; chemicals and pharmaceuticals, 15.6%; machinery and equipment, 14.1%; motor vehicles, 12.1%; steel and aluminum, 9.1%; refined petroleum, 8.8%; construction material, 4.6%; rubber and plastics, 4.1%; paper and cardboard, 3.2%; textiles and leather, 2.1%; publishing, furniture and other, 5.9%.

Electricity:

Main article: Electric power in Argentina

production: 116.1 TWh

consumption: 109.1 TWh (2008)

exports: 5.1 TWh

imports: 7.4 TWh (2006)

Electricity - production by source:

natural gas: 54.2%

other fossil fuel: 11.5%

hydro: 26.7%

nuclear: 6.3%

other renewables: 1.3% (2007)

Petroleum:

production: 675,000 barrels/day

consumption: 564,000 barrels/day

exports: 111,000 barrels/day (2006)

proved reserves: 2.6 billion barrels (2008)

refined petroleum: 35.2 milliom m³ (2008)

Natural gas:

production: 50.4 billion m³ (including LNG)

consumption: 43.4 billion m³ (2008)

exports: 2.6 billion m³

imports: 1.9 billion m³ (2007)

proved reserves: 446 billion m³ (2008)

Argentina: Historical Economic Growth Rates.

Period Average

Growth

Rate Per

Capita

1900 to 1913 5.7% 1.7%

1913 to 1929 3.6% 1.0%

1929 to 1945 1.2% -0.6%

1945 to 1974 4.0% 2.3%

1974 to 1990 -0.4% -1.8%

1990 to 2009 4.0% 2.9%

Reserves of foreign exchange & gold: December 2006: US$31 billion, May 2007: US$40 billion, March 2008: US$50 billion. January 2009: US$47 billion May 2010: US$49 billion 

Debt - external: Total (12/2009): US$117.8 billion (private, US$55.9 bil.; public, US$61.9 bil.).

Macroeconomic indicators

Indicator GDP at constant prices GDP, real annual

percentage change GDP per capita

at constant prices GDP at PPP

(% of world's total) Total GDP at PPP GDP per capita

at PPP Fixed investment

year million 1993 AR$ % 1993 AR$ % million USD USD % of GDP

1980 205,633 0.7 7,357 1.096 135,882 4,862 23.5

1990 182,633 -1.3 5,614 0.712 182,478 5,610 12.6

1991 201,806 10.5 6,121 0.777 208,783 6,333 14.8

1992 222,591 10.3 6,659 0.843 235,746 7,054 17.9

1993 236,505 6.3 6,973 0.880 256,017 7,548 19.1

1994 250,308 5.8 7,286 0.903 276,668 8,054 20.5

1995 243,186 -2.8 6,992 0.851 274,395 7,890 18.3

1996 256,626 5.5 7,291 0.866 295,075 8,384 18.9

1997 277,441 8.1 7,792 0.900 324,640 9,118 20.6

1998 288,123 3.9 8,002 0.913 340,948 9,469 21.1

1999 278,369 -3.4 7,648 0.852 334,252 9,183 19.1

2000 276,173 -0.8 7,508 0.808 338,794 9,210 17.9

2001 263,997 -4.4 7,105 0.756 331,174 8,913 15.8

2002 235,236 -10.9 6,270 0.656 299,872 7,993 11.3

2003 256,024 8.8 6,761 0.689 333,399 8,804 14.3

2004 279,141 9.0 7,302 0.715 373,041 9,759 17.7

2005 304,764 9.2 7,897 0.747 419,568 10,872 19.8

2006 330,565 8.5 8,482 0.772 469,913 12,058 21.6

2007 359,170 8.7 9,126 0.800 525,196 13,345 22.6

2008 383,444 6.8 9,648 0.821 572,668 14,408 23.1

2009 386,704 0.9 9,635 0.813 584,392 14,561 20.6

Indicator Current account balance Exchange rate

needed for parity Exchange rate,

actual GDP prices Inflation Unemployment Industrial

production

year million USD AR$ per USD AR$ per USD 1993=100 % % 1997=100

1980 -2,573 2844* 1849* ~ 100.4 2.5 89.2

1990 4,665 0.378 0.487 37.7 2,314.0 7.4 68.6

1991 -429 0.867 0.953 89.6 171.7 6.4 75.6

1992 -6,468 0.961 1.000 101.8 24.9 7.0 85.4

1993 -8,043 0.925 1.000 100.0 8.5 9.6 88.3

1994 -10,981 0.931 1.000 102.8 4.2 11.4 92.4

1995 -5,104 0.941 1.000 106.1 3.4 17.5 86.0

1996 -6,755 0.923 1.000 106.0 0.2 17.2 91.4

1997 -12,116 0.904 1.000 105.6 0.5 14.9 100.0

1998 -14,465 0.879 1.000 103.8 0.9 12.9 99.6

1999 -11,910 0.850 1.000 101.9 -1.2 14.3 89.2

2000 -8,955 0.841 1.000 102.9 -0.9 15.0 87.8

2001 -3,780 0.812 1.000 101.8 -1.1 17.4 77.7

2002 8,768 1.042 3.090 132.9 25.9 19.7 70.2

2003 8,142 1.128 2.949 146.8 13.4 17.2 82.4

2004 2,659 1.200 2.941 160.4 4.4 13.6 94.0

2005 4,700 1.268 2.923 174.5 9.6 11.5 102.6

2006 6,772 1.394 3.074 198.0 10.9 10.2 112.5

2007 5,921 1.551 3.115 226.2 13.1* 8.5 122.7

2008 4,987 1.800 3.162 269.3 17.4* 7.9 129.6

2009 8,651 1.959 3.729 296.0 11.7* 8.7 129.7

Notes: 1980 exchange rates are in pesos ley; 100 billion pesos ley equal one current peso. Private consumption prices for GDP used in lieu of CPI inflation for 2007 onwards.

Data by provinces

District Population

(000) GDP

(USD bn) a GDP per capita

(USD)a Agri

culture Mining Manufac

turing Services

& cons

truction

b Exports

(USD mn) Median salary

(USD)a Vehicles

(per 1000) Income

poverty Structural

poverty

City of Buenos Aires 3043 70.929 23,309 0.3 1.0 12.9 85.8 442 870 598 7.3 7.8

Buenos Aires Province 15052 110.030 7,310 4.5 0.1 21.3 74.1 24958 660 216 16.2 15.8

Catamarca 388 2.331 6,009 3.6 20.8 12.1 63.5 1156 613 113 24.3 21.5

Chaco 1052 2.120 2,015 12.6 0.0 7.5 79.9 388 500 116 35.4 33.0

Chubut 461 7.110 15,422 6.9 21.3 10.0 61.8 2529 1,011 369 4.6 15.5

Córdoba 3340 21.633 6,477 10.6 0.2 14.0 75.2 9540 595 290 14.8 13.0

Corrientes 1013 4.053 4,001 12.6 0.0 8.2 79.2 194 527 131 31.5 28.5

Entre Ríos 1256 7.137 5,682 11.9 0.3 11.6 76.2 1514 539 201 13.0 17.6

Formosa 540 1.555 2,879 7.6 1.5 6.4 84.5 21 505 94 30.7 33.6

Jujuy 680 2.553 3,755 5.5 0.7 14.6 79.2 332 568 124 30.0 28.8

La Pampa 334 2.000 5,987 19.0 3.7 5.3 72.0 410 593 296 13.6 10.3

La Rioja 341 1.419 4,162 3.9 0.1 16.8 79.2 178 452 129 22.0 20.4

Mendoza 1730 15.707 9,079 5.4 6.1 17.5 71.0 1552 599 247 12.2 15.4

Misiones 1078 4.044 3,751 6.7 0.0 13.0 80.3 474 525 132 32.6 27.1

Neuquén 548 14.398 26,273 0.7 42.8 2.9 53.6 642 1,015 283 11.2 17.0

Río Negro 597 4.924 8,247 4.9 8.4 7.3 79.4 602 654 224 20.6 17.9

Salta 1224 5.165 4,220 8.1 7.6 10.4 73.9 1241 546 109 29.7 31.6

San Juan 696 3.927 5,642 8.1 0.3 15.9 75.7 982 615 165 18.4 17.4

San Luis 438 2.444 5,580 4.9 0.5 42.4 52.2 656 636 155 22.0 15.6

Santa Cruz 226 6.892 30,496 4.4 47.1 2.3 46.2 737 1,189 367 3.6 10.4

Santa Fe 3243 27.316 8,423 10.1 0.0 17.4 72.5 15363 617 277 18.2 14.8

Santiago del Estero 865 2.598 3,003 11.5 0.1 6.2 82.2 289 544 72 31.0 31.3

Tierra del Fuego 126 2.606 20,682 4.7 18.5 18.6 58.2 690 1,128 603 6.4 14.1

Tucumán 1475 5.807 3,937 6.0 0.1 12.6 81.3 1030 470 118 27.7 23.9

Argentina 39746 328.696 8,269 5.0 2.7 16.3 76.0 70021c 642 239 17.8 17.7

(source:wikipedia)