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[Global Climate Change & Argentina] [loose] [1]
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[Global Climate Change & Argentina] [loose] [1]
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Records of the Council of Economic Advisers (Clinton Administration)
Vivian Wu's Files
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FOIA Number: 2017-1095-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin: Council of Economic Advisers
Series/Staff Member:
Subject Files
Subseries:
OA/ID Number:
21608
FolderID:
Folder Title:
[Global Climate Change & Argentina] [loose] [1]
Stack:
Row:
Section:
Shelf:
Position:
S
21
5
1
1
Oct 98 Av gentine trip
3 points
1) 4' taken as BAU
1989, 1990 badgens
2) how to reduce em3 granth trend, use of they mechs
3) 2 short-term issues
-inuntary of GHLenus
- model to reduce trend = fiture
Avg has created otc for JI - currently analyzing 2 projects
Private sector participation necessary
CDm v. Trading
Tranding has comp abv, eg privitization+ deregulation
BAU Study for Argentina
9:30 economic group
BAU
Costs
macroeconomy
- abatement
and
- expected econ growth
enegy
- expected energy efficiency
trans
- structural A - ID investment
ag
energy
sinks
- hydro development
more capacity ?)
- polices to
- not gas
abate
- and + transport
- intl trading
- export opportunities
non CO2 GHG
Bens
- agriculture CH4, N2O, sinks
- angelty AQ
- sinhs
?s gains from dereg/privitication
whed prot.
have lg gains all been obtained
now just sm gives
?s move capacity for hydro
is C how extend effects drive BAU
- world economy
-denad for energy from abroad
sector - specific models
eg energy
Macro projections
thru 2005, then 10yr growth projections
get copy of pink publication
energy projections yearly the 2010 report an web
oil- >50% tax
not gas - small tax
no subsidies (except for renote areas)
93% of pop sermed by elect return
Elect: total 65
hydro 28
W
28
2
Forecasting
by 2010 - up to 60% hydro
-central bank
Ind: CEP into center data
FIEL - group does projections
1997-2010-CO2 95%
WB project on local AQ+ transport in B,A.
Weaver paper as well
email
engel
or 8 or orj
Contact
[email protected] Dirección Nacional de
for talecimiento Institucional
DCa. Andrea M. Brusco, ABOGADA
541-348-8454 h
Tucuman 1424 3' C, BA
371-5305 a
OCT-20-1998 10:58
DES/EGC
202 647 0191
P.01/05
United States Department of State
Bureau of Oceans and International
Environmental and Scientific Affairs
Washington, D.C. 20520
20 October 1998
TELEFAX TRANSMISSION
TO: Clane Breidenich
260-6405
NAME: Peter Nagelhout
260-6405
TEL:
Joe Aldy
395.6870 FAX:
Phil Tseng
586-5391
NUMBER OF PAGES, INCLUDING THIS PAGE: 5
FROM:
NAME: TEL: (202) 647-4069 /4511 direct
OFFICE OF GLOBAL CHANGE
FAX: (202) 647-0191
OES/EGC - RM. 4330
MESSAGE:
Attached is a draft reporting cable for our recent trip to BA.
I thought it would be valuable to have the Phil team clear it,
IF they so chose. This will be sent out by covington so it
comes from BA. I have already cleared the text through
DOS, and would appreciate your comments/clearance by
COB today. Thanks in advance! Any guestions, please call.
Beodsera
OCT-20-1998 10:58
OES/EGC
202 647 0191
P.02/05
Reftel: Buenos Aires 5307
Summary
1. Summary: In recent weeks, as noted in reftel and in telcons, Secretary of Natural Resources
Maria Julia Alsogaray has indicated on several occasions that Argentina is considering taking
steps that would demonstrate Argentine leadership among developing countries. Although initial
indications were that Argentina was looking to announce a target when President Menem speaks
during the ministerial session at COP-4, that position has since softened. It now appears that
Menem will make a strong statement, which might include an announcement that Argentina
plans to take on a target. Perhaps to this end, Secretary Alsogaray requested that the USG send a
team of experts to Argentina to discuss issues related to emissions baselines and projections. In
response to this request, OES/EGC Director Dan Reifsnyder lengthened his stay in Buenos Aires
after the conclusion of the UNFCCC Extended Bureau meeting to lead a technical team from
Washington through discussions with Argentine counterparts. Productive and informative
meetings were held with technical experts from a number of Argentine ministries, and the group
gained invaluable insight into the progress already made by Argentina. It appears that there is
political will to make a strong statement regarding Argentina's intention to take on a voluntary
quantitative commitment; however, it seems clear from the meetings with the technical staff that
Argentina is not analytically prepared to do so. Nevertheless, there are good opportunities for
the U.S. to work closely with Argentina at the technical level to ensure that the Argentines
continue to lay solid groundwork for taking on a binding target in the near future. End
Summary.
Raison d'être
2. The team's purpose in traveling was twofold. First, the team went to Argentina in an effort to
be responsive to Alsogaray's request for technical assistance. Second, the team's goal was to
discuss the technical elements of the identification of emissions baselines and the facets of
economic modeling integral to the contemplation of a binding commitment. At no time during
the meetings was there a suggestion - by the U.S. or the Argentines - of a specific target, nor did
the U.S. team leave any papers behind. The U.S. team made extensive, detailed inquiries
regarding the current availability of data in the sectors important for economic modeling
purposes. The Argentine delegation provided the data they had available among during the
meeting, and identified Internet web sites where additional data may be posted.
3. The interagency technical team consisted of members from DOS: EB: Victoria Greenfield,
and OES/EGC: Barbara De Rosa-Joynt; EPA/Office of Policy: Clare Breidenich and Peter
Nagelhout; DOE/Office of Policy and International Affairs: Phil Tseng; and CEA: Joe Aldy.
Sessions provide clarity
OCT-20-1998 10:58
OES/EGC
202 647 0191
P.03/05
4. On 13 and 14 October, the technical team met with Sub Secretary Raul Castellini, Secretary
Alsogaray's deputy, and an interagency team of representatives from the Ministries of Industry,
Transport, Energy, Natural Resources, and the Environment.
5. During the course of the discussions, it became clear that Argentina is not in a technical
position to identify a specific target at this time. Nevertheless, there is political will to make
advances and to demonstrate leadership at COP-4. However, the Argentines indicated that since
President Menem has only about one year remaining in his term, they are working to ensure a
wide consensus among government agencies so that efforts will continue when the government
changes next year. Sub Secretary Castellini noted that never before has there been so much
interagency participation in an issue as they have experienced with climate change.
Data promising but incomplete
6. Despite apparent gaps in the data, the Argentines have made significant progress in
developing emissions profiles and/or projections for particular sectors, such as energy and
transportation. However, it is the U.S. team's view that they must move forward analytically to
address the potential costs and benefits of emissions abatement, including the preparation of an
integrated economy-wide assessment. Ultimately, they will need this assessment to formulate a
credible target. Whether or not they have the analytical capacity, i.e. appropriate economic
models, to prepare the assessment is an open question. (It is likely that Argentina's economic
agencies - or their functional equivalent - already have some such capacity, but they have not
yet engaged in the interagency analytical process. The U.S. team stressed the importance of this
information in any future discussions.) The Argentines inquired about U.S. methodologies, i.e.
the kinds of economic models used in the United States, and the U.S. team offered to share
information to facilitate selection of appropriate methodologies for Argentina. It appears that
some, but perhaps not all, of the data needed to run the economic models are available.
7. Although technical coordination on an interagency level has not been widespread in
Argentina, some data are shared among agencies; nonetheless, an overall integration of data and
expertise has yet to be achieved. In particular, the economic agencies were noticeably absent
from the meeting. However, it appears that the new Office of Joint Implementation, under
Sub Secretary Castellini, will include personnel from government agencies, NGOs, the academic
community, and the private sector. This approach to climate change policy is anticipated to
enhance data collection and application, since some data have already been collected and perhaps
evaluated by persons outside the government, but have not been incorporated into the
government efforts. Those outside the government may have access to additional economic
modeling tools. But, even within the government there may be significant opportunities for
enhanced analytical efforts, in particular, as noted above, by engaging the economic agencies.
The road to a target is long and winding
8. The U.S. team reviewed elements that the Administration has found important when
contemplating baselines and generating projections, and all agreed that Argentina's recent
OCT-20-1998 10:58
DES/EGC
202
647
0191
P.04/05
economic history would complicate the modeling process. The U.S. experts discussed the
elements of the U.S. analysis and data collection that made it possible to consider and commit to
a binding target. The Argentines expressed interest in U.S. modeling techniques, and raised a
number of questions about how the models were used and what data were incorporated. The
Argentines indicated that in considering a future target, they plan to use an historical baseline.
However, they emphasized that 1989-1990 was a difficult period for their country, so indications
were that they do not use that timeframe for a baseline.
9. The group was in agreement that the most reasonable course for developing countries is to
consider taking on targets which allow for growth, but which result in decreases from the
business as usual level. The term "actions to abate the increase" was used in lieu of the term
"reductions." The participants from the Ministry of Energy were quick to point out the fact that
Argentina uses mainly hydroelectric power and natural gas, thereby generating low emissions
levels of CO₂, NOₓ, and SO₂. Argentina has very few relevant subsidies, already taxes gasoline
substantially, and Argentina does not use much "dirty fuel." [Note: Argentina's tax on gasoline
accounts for more than 50% of the purchase price.] This indicates that Argentina lacks some of
the easier options to lower greenhouse gas emissions available to some less developed countries
like China and perhaps even to some equally developed countries. Argentina is also a substantial
exporter of electricity to its neighbors, including Brazil. Regardless, Argentina believes that the
developing world is ready to agree that, even if countries are not yet ready to take on a formal
target, they still need to work toward reducing their rate of greenhouse gas emissions growth.
10. The group discussed the benefits of taking on a binding target, and the U.S. team stressed the
benefits to be gained from emissions trading, and the likelihood that countries would find that
trading would be more beneficial than CDM, as a result of the transaction costs incumbent in
CDM transactions and the inherent limitations of project-by-project abatement.
Future contacts
11. The group was interested in communicating again at the technical level prior to COP-4, once
the U.S. team has had an opportunity to review the data received from the Argentines. Tentative
plans were made to reconvene via videoconference within the next few weeks.
Comment
12. Comment: While it appears that there is political will to make a strong statement regarding
Argentina's intention to take on a voluntary quantitative commitment, it seems clear from the
meetings with the technical staff that Argentina is not analytically prepared to do so. The
Argentines the U.S. team met with have a sound understanding that taking on a target is serious
and that selecting a target that is too stringent could unduly burden their economy. Argentina's
biggest problem is that there are not many areas for easy reductions. Argentina's industry is not
a major source of greenhouse gas emissions, and its overall emissions levels are low, duc to the
use of hydroelectric power and natural gas. Those areas with room for improvement exist
largely in the transportation sector, which already imposes a significant tax on gasoline. Because
OCT-20-1998 10:59
OES/EGC
202 647 0191
P.05/05
of its energy profile, Argentina may face a relatively steep cost curve. Moreover, it is also a
significant exporter of electricity to other non-Annex I countries, e.g., Brazil.
13. A strong statement from Menem at COP-4 about Argentina's serious efforts to prepare itself
for a binding emissions target would send a clear message to other developing countries about
the need to move forward. Incorporating the point made by Alsogaray at the UNFCCC Extended
Bureau meeting - that if developing countries want to see developed countries take action, they
need to participate themselves - would also be helpful. She noted that only by so doing can they
end the circular argument that developed countries will not act until developing countries take
action, and that developing countries will not act until developed countries take action.
14. The Argentines will need to continue to work to ensure that they maintain a consensus
within the different factions of their government so that when Menem departs next fall, the
momentum they have created will continue into the next administration. It is unclear if
Argentina will be ready to announce a binding target before the close of Menem's term in office.
Nevertheless, there are good opportunities for the U.S. to work closely with Argentina at the
technical level to ensure that the Argentines continue to lay solid groundwork for taking on a
binding target in the near future. End comment.
15. This cable was cleared with the U.S. technical team.
TOTAL P.05
/
SNR
2/2/99
emplaing
SNR-GCC
draft work plan - suggestions welcome
SNR-whow SNRSD eurphy
Justry Borns SNRE city wriste TranslatCastelling Consto Andrew
Sur-har waste
SNRE
?
(Partrice)
SNRSD
Enver
forests Ag
(M)
farest der
page
Energy
Ag
fisheres
Scir
Tech
Mis Economy
see
scitech
SNR-O3
Industry
IPCC
SNR-pliction
might
Foreign Attain
For Affeirs
new proposed decree (Menen decter) - create a ratl
50 Aftairs
commission is charge of elaborating GHG emissions
ob jectines, comission would include participation by
all parts of gent, private sector and would
propose the GHG target : the context of its
SUS der policy; target would be a slowing the
growth
Patriz Varquez - early action credit - Pew report
SO2 trading program
need worthplan text
access to internet- Pew ealyaction
SO₂
EIA wg data (ernis, GDP, pap)
2
2/2/99
goal is to finalize workplan by end of visit
Secretarized of Selt Tech - Mener initiated its wash in 91 to study
GCC research issues; this commission includes Min Econ, MEA,
SNRSD, ag, space, scietch, antarctic, meterralize service
work fouses on 1)scirtifie research; 2)technological work (OSTP-Che)
equal participation by public + private Sector
Enesy - w/in min econtpub works
deals w/ elect, oil, hydrocaubons
projecting elect + hydrocarben demand - these titure scenarios
will in chole GCC assessments
put of office + Jait Implemention
OII- exec committee will advise SNRSD on efforts to address GCC,
Kyoto, + flex mechs
advisory board - proindes teah assistance to execcere
research in Argentina - Dept of Atmosphere Science - Univ it BA
Center for the Investization of Sea, Atmospher Pynains
into studies on impact ofGCC on ag
water+ + env,
IPCC participation /WG -II co-chair)
Baccos Presentation: Worling Plan for the Adoption of GHG at
annoince target e COP5
bachgroud: 1st noth come, some studies (MFA can provide syntheses)
inventory of GHGs - energy
ag lincholing ine)
Whestock
land use chage
waste mgmt
3 vulnerability studies - sea level rize, Andes, agriculture
W
2/2/99
mitigation study (dinector of project will be here on Weed)
Goal: to produce technical into to facilitate adapting a torget for 2008
Main objectnes : determine present GHGs baseline
-97 -
- review 90, 94 inventories Inst complete)
assess projections for 2008 - 2012
- BAU
-different mitization scenarios
elaborate options for the Ag. propisal on GH Genosin goal;
prepare 2d notl comm N review 1st notl come.
approach: contracts w/ experts of institutes
SNRSD + other govt agencies will udertake planning
ideselect expetst institutes
terms of reference
revew expets' reports
condination
need tech into at least 2 months before maling the decision
Inventory: baseline year
prefer 1997 (its "historie in in 97 has "Leve Avg per reached capital
need to improve 90,94 inventories
legal commitment
am3 primarily from energy
linestoch (less growth. stable last 20yrs)
Econ, Tech + Emis Sumarios
macro e can
S cenaras
tech -adrit flaws in this area,
(3 scenoris)
trends want us assistance
sector
projections
mitization
options
emissms
scererios
4
2/2/99
Argentive is a net sink
Sector analysis energy, transport
ag + husbandry
forests
waste
1 6 of and
carent ? Alumin ?
Mitization options: costs
benefits
social, envl, econ inpacts
Integrated analysis: elaboration at alternative goals of GHG emissins
Technical assistance needed: technological progress (trangert, hydrogen, wind
mathenatical modeling
some sectors-soils
MFA study on flex mechs
(joint w/ Canada) -available in Argust; already lwshop before COPY
private sector participation
2 objectives: 1) determine Avg position an thex mechs
id participation in itl em3 trading
2) decidy what institutions are necessary to industed GCC
- a database to inform policymahes + expets who make decisions
report on wshop + COPY has been produced
another wshap to finalize work expected by April
Long-term
- inventory + projections
lesson, flex critizal - when what uhes
- review it existing policies
W
2- math. communication
intorm policy discussion
-modeling
- trading
intragency policy process
- coup
- Labor
- potential policies
- utilnes
-tranding, tax
- technology
ecromic (female) registions
- intl tranding
- JI CDM
- competitives
- labor
outreach
energyment in
- consultations
a
Daniel
university
- UH cant on CC
\
Bankache Bedilla
I un progecting
technral work fed into position, polizies
econ researcher
- targets
will trade
- trading
MFA
- CITI
- elect nes.
2/3/99
Studies Related w/ GHG Mitization
- "Report in Mitization Optins" results in rath Comm
"Econnics ot GHG Limitations"
"Implizations of Power Seator Restructing on CC Mitrzation"
"stud, on Flex Mech w/in the catext it UNFLCC + kyoto Protocol"
Report n Mitization Optims
obj: to assess potatial of mitrytin optins in the one gy system
sectors scopee powers supph, industry, + transport
contents: diagnosis- socioecoment scenovies, eragy sceravies,
results: possible evolution of every corruption the 2020
possible actions to instructe GHG emising
pronempal beiness
Economics of GHG Cimitations / 2 Asia, LEITs, 21Am, 2 Atr)
obj: to assess methodridgical apprach to analy ie mitization aptions : LDC
Scope: to divelop study Ca yes i LDC energy systems
contents: dragnosis - baselnermitization Scenarios,
mitization option direct incremental costs
- Implications of Porna Secta Restructoring
ob in vestizate prospects for impluants GCC mitization gohn in restructived system
6
2/3/99
Scope: to assess institutional lat economic) viability of "sand permel supply
projects "Thydro, and, silar)
contacts: institutional + regulatory transurity, incenting to recemble + energy
ething, intl experience in promotion of rememble - energy eff.
opp lizability of
results: id noit int barners, impacts of New t energy off, pitature
for policies + measures
Study on Flex Mechs
obj: explore options is participating -andyze ads + disads of mhts
scope: energy system opportunities to generate GHG offsets
contrats. GHG offsets potental, nht opportunites, institutional travente, Ag
results: id of most intenting areas, estimation it itl demand for alta offsets,
mht cytions + opportunities, assessment of mechanisms
Why new studies one necessary
-new - position possible targets
- new gases bashets. new methodologies
- energy studies -need more idepth analysis, need to calculate coits+ benefits of
exchaption; it is necessary to include local registered + Macroecar impacts
- need towareness + consensis to transform hypo scenarios i viable + possible ones
- need to d + design strategies for controlling GITG emissions
- detinition of the intitutional, legal, + regulatory transunh necessary to desclopaction
Barros
targets will Cover all sectors, 6HG emissin, from all saves + activities
CH4 ipt is Ag case, Ar, energy sector is re, dynamic -trews of will todate
Overew of Economic Pigotion work (SEMA?)
O
with + Arg con priyections-primarily short-term; policies, development, it trade
Use simple economation models for projections could results w/ models to date
what type of projections by sectors, by areas what into is usetil
7
2/3/99
2
fn econ projections - S+ 104- finecasts- of trade, macroeconomy
also USL econometric model
what contribution Can they make
3
can also contribute - have done a lot of work on structure i
evaluate impacts on varing sectors
energy secta model; analy 1.3 /projection there 2025 - scenaries
no model can be statiz - always Aig w/ new inputs
is interest is working on sprinl 3sives - cement (have cent projection)
electricity
transportation
9am- meet w/ Arg. modeles
get copy of AEA for Arg. modele's (IAT from RIF
CEMA ( Centro de Estudos Macroeconomics Argentia)
- Mariano Fernandez
Pablo Palla
FLALSO (?)
- Paula Gosis
8
2/3/99
one gy sector inventor,
industry sector "
Basile- enegy sector projection
one new of energy sector -deregulation, printization
sares of emissions: 1) transportation
2) electricity (50% Lydio, 482 102@)
GD growth rate 2005: 4.1%
QUPpercapita 2005; 10100
95-2020:4.4% 2010: S.O'C
2010 : 12060
2020: 4,4%
2020: 16400
BAU cssumptims - enesy prices is line w/ intl prices
- decreasing energy intensity (dyramic tech effizing)
- about energy supply (oil, yes, poner)
- paner generation orig not gas w/ up to date generatin tech
- Power + not gas regional mohets development
1% GOP
0.8% T Co2 emi3
95-2020 - CO2 em3 7 138%
World Bank study
electricity sector ovvcapacity of 50%
etticiency nht barriers
asibsectors
FIEL - several macro models, sectoral models ( const monetory prize
industry Cap goods fiscal
I long-term model (based on 70s-90s)
- macro + sectoral are simultaneous
world GDP exogerors
need to discuss uniform ipt assumptions
nate income accts are certral
some sectors are may simple (2-3egus)
elect
have an energy sectiv model - much more disaggregated
gas
fuels
-Can evaluate taxes
cement model
electricity electricity (to GDP) >1 lap to (.5); elect
D
7% i 90s is
while GDP T 5% in 90. (centalso 1)
2d approach- special analysis of specific policies -need to Smodels
need more date from Min if Earny (NIPA)
- grately
model run quarterly - 3scenaires (baseline, (ow,high) -- 3yr analysis
10 y, analysis (done before for oil, const, capital good campanies)
- annual models
taxes in (camBa?) chanes model -very detailed in electricity
FLACSO- MERCOSON + mac/olconomiz modely
54- time horizon (have done 10yr run)
don't work w/ sectoral models
have done modeling w/ IADB
annual model
Can disaggregate by region
SEMA - forevent macro indizators 2-3yrs
forecast sectors (9 matl acct sectors)
what outputs are recessary
how to Gandle various scenosios (MERCOSW evalution, hi, 10..
Sectors: ag, service, industry, energy transport
input assumptions
FIEL - world GDP, al prices, world interest rate, us GDP,
exchange rates (ewo, yen, dalla), reporal growth
has association w/ DRI get data from DRI
CGE used on end em3sins is WADI
Boulle - need a wshop asay internally
how to devote resarces to 2 ʳ process (mitization)
Argentine I-O table ready'in 2000 - being developed
by econ ministr,
Other to review BAU torecasts
JAN-26-1999 14:46
DES/EGC
202 647 0191
P.01/04
SUGGESTED DRAFT AGENDA
of pages
Voice mail message
First Technical Meeting EPA- SRNYDS
From Phone Barbara 647.4511
GENERAL SERVICES ADMINISTRATION
Objectives
Per
- Review the SRNYDS Project to produce the information for political decision making in
the definition of GEI Emissions Target for 2008-2012.
- Review of the American experience in analyzing GEI Emissions Targets.
- Identify appropriated scope of the EPA assistance to SRNYDS Project.
First day, morning
OPTIONAL FORM 99 (7-90)
FAX TRANSMITTAL
5099-101
. Identify technical and financial needs.
Participants:
American embassy representatives
Dept/Agency Joe Aldy
Fax # 395.6870
SNRNDS officials
NSN 7540-01-317-7368
EPA visitors
To
SRNYDS technical group on Climate Change
1. Welcome and introduction ( 1/2 hour)
- Opening remarks and introduction of the participants.
- Objectives of the meeting
2. Introduction
-Argentine and Climate Change (1 1/2 hour)
Government organization
Activities and capabilities at the government agencies, universities and private sectors
The proposed SRNYDS Project to produce the information for political decision
making in the definition of GEI Emissions Target for 2008-2012.
-American and EPA experience (1 hour)
-Discussions (1/2 hour)
First day, afternoon
Participants:
EPA visitors
SRNYDS technical group on Climate Change
Argentine lead authors of previous related projects
2. Introduction (continue)
- Project ARG/95/G31 Studies on Climate Change in Argentina: Inventory,
Vulnerability and Mitigation (1/2 hour)
- Inventory (1/2 hour)
. Mitigation (1 hour)
- Argentine study on mechanisms of flexibility (1 hour)
- Discussions (1 hour)
Second day, morning
Participants
EPA visitors
SRNYDS technical group on Climate Change
Argentine experts.
Representatives of the Secretary of Energy
Representatives of the Secretary of Transport
JAN-26-1999 14:47
DES/EGC
202 647 0191
P.02/04
3. GEI Emissions projections and Mitigation ideas in the Energy sector
and in the Transport sectors
- Overview of the official projections on the energy sector (½ hour)
- Same for the transport sector (1/2 hour)
. Discussion on technological trends (EPA is expected to contribute mainly in the
transport sector) (1 hour)
- Discussion and identification of technical assistance (1 hour)
Second day, afternoon
Participants
EPA visitors
SRNYDS technical group on Climate Change
Argentine experts.
Representatives of the Secretary of Agriculture and Forestry
4. Projections and Mitigation ideas in the Agriculture sector and in Forestry and Change in the
use of Soil
- Overview of the projections in Agriculture, Livestock and Agrochemical use(1/2 hour)
. Same for the forestry activities and of the native forest (1 hour)
. Discussion on Forestry and change in the use of soil, ideas on what is going to
come up from the IPPC technical document, what approach to take in projections
related to targets (EPA is expected to contribute) (1 hour)
. Discussion on technological trends (EPA is expected to contribute in Agriculture and
Livestock (1 hour)
- Discussion and identification of technical assistance (1 hour)
Third day, morning
Participants
EPA visitors
SRNYDS technical group on Climate Change
Argentine experts.
Representatives of the Secretary of Industry
Representatives of CEAMSE (Waste disposal in the Great Buenos Aires)
5. GEI Emissions projections and Mitigation ideas in the Industry and Waste sectors
- Overview of projections in waste and waste disposal (1 hour)
- General discussion on the non energy future emissions of the Industry (1/2 hour)
- Same for the cement industry (1/2 hour)
- Discussion on technological trends (EPA is expected to contribute) (1 hour)
- Discussion and identification of technical assistance (1 hour)
Third day, afternoon
Participants
EPA visitors
SRNYDS technical group on Climate Change
Argentine experts.
6. The use of modeling in mitigation assessment
-EPA presentation (1 1/2 hour)
- Discussion and identification of technical assistance (1 hour)
7. Final conclusions (3 hours)
- Argentine workplan to October 1999 ( Argentine commitment at the COP V)
. EPA Contribution to the Argentine workplan
- Future work
JAN-26-1999 14:47
OES/EGC
202 647 0191
P.03/04
phils home
h Non night
790-4397 790- 4397
dep Thus night
Draft Agenda for US-Argentine Technical Team Meeting, February 1999
2pm Twen
I. Welcoming Remarks
Sorce
II. Introduction
Ued, Thus fll days
A. Division of climate responsibilities among ministries, universities, contractors, etc.
1. GOA
inventory 2d noth com
2. USG
B. Review of objectives
modely tech
1. Goals of GOA - next year and beyond
a. SRYNDS-USG project proposal
competition
sm/ith
b. Other GOA projects, studies, etc.
C. Brief overview of technical/financial assistance sought
II evaluate = ex.3 policies tig policie
2. Goals of USG
DAR
a. Work with GOA through the SRYNDS-USG project and others
b. Identify technical/financial assistance available
pes. trade
don't
III. Developing a target
A. GOA
extraction
1. Review of groundwork laid to date
2. Plans/proposals for how GOA will come to a decision on a target [by COP-5]
3. Work remaining to be done before GOA is ready
4. Technical assistance sought
B. USG
1. Review of groundwork laid in preparation for taking on a target (what we had to put in
place so that we knew what target we could accommodate)
Victoria
2. Lessons learned with different modeling types in assessment of target, Joe/Victoria
3. Lessons learned through development of our inventory Wiley / ICF Kaiser
4. Lessons learned from our early mitigation efforts
EPA - Wiley or Bill H?
5. Technical assistance we can offer
Maurice
IV. Sector Specific Discussions
+ flexibil mechanizes
A. Energy and Transport
1. GOA
a. Groundwork laid in inventory
b. Projections for sector
C. Technical assistance sought
2. USG
a. Lessons learned with models in this sector
b. Lessons learned regarding trends and ability to impact trajectories of emissions
levels in this sector
DOT-Kevin Green, DOE-Ray?
c. Lessons learned regarding mitigation technologies
DOT-Green, DOE-Ray?
d. Technical assistance we can offer - DOE-Ray?
L+stratezies + policies
Mariott Plaza
Florida 1005
541 - 318-3000 3008 fox
JAN-26-1999 14:47
OES/EGC
202 647 0191
P.04/04
B. Agriculture, Forests and Soils
1. GOA
a. Groundwork laid in inventory
b. Projections for sector
c. Technical assistance sought
2. USG
a. Lessons learned with models in this sector
b. Lessons learned regarding trends and ability to impact trajectories of emissions
levels in this sector
Bill²/Margot?
c. Lessons learned regarding mitigation technologies
Bill²/Margot?
d. Technical assistance we can offer - Bill²/Margot?
3. Brief discussion of status of IPCC technical work in this sector Bill²/Margot?
C. Industry and Waste
1. GOA
a. Groundwork laid in inventory
b. Projections for sector
c. Technical assistance sought
2. USG
a. Lessons learned with models in this sector
b. Lessons learned regarding trends and ability to impact trajectories of emissions
levels in this sector
EPA/OAR or Solid Waste rep
C. Lessons learned regarding mitigation technologies EPA/OAR or Solid Waste rep
d. Technical assistance we can offer - EPA/OAR or Solid Waste rep
V. Conclusions
A. Argentine workplan up to COP-5
B. Review of technical assistance available from the USG
Agency reps, as appropriate
C. Future work
TOTAL P.04
JAN-08-1999 10:25
SCIENCE ECON
777 4870 P.01
FAX TRANSMITTAL
EMBASSY OF THE UNITED STATES OF AMERICA
Colombia 4300, (1425) Buenos Aires, Argentina
VOICE: (54)[1] 777-4533 ext: 2349
FAX: (54)[1] 777-4870
Date:
N° of pages including cover!
To: DES/EGC: Dan Re:fsyder $ Berbaca De Rosa-Joyat 737-0191
Attention:
EPA: Marrice Lefranc 73931-202-260-6405
Fax Number:
and Dun Belillo
From:
CEA. foe Aldy 73931-202-4 395-6870
Philip Covington
As promised. We look forward to seeing
some of you B soon!
PS Our translation & the SRNDS send strategy
is pretty rough, 80 I'De included the Castellano
version. seperately.
JAN-08-1999 10:25
SCIENCE ECON
777 4870 P.02
MEMO
TO: Mr. Phil. Covington
American Embassy
FROM: Dr. Vicente Barros
Secretaria de Recursos Naturales y Desarrollo Sustentable
ISSUE: Notes on "Setting an Emissions Growth Target: Technical Issues"
DATE: January, 6, 1999
We agree with most of what is said in this document. Specifically. we agree with the suggested
approach to develop basic information for the Argentine' decision making process of setting emissions
targets on GEI.
We share the view that there is some existing analysis done on Mitigation However, this analysis is
limited to the energy and transport sectors. Furthermore. it docs not include abatement costs and
the benefits of abatement.
In the text, there are some question marks that I do no know if they are there looking for an answer or
are simply a colloquial way of expression. In any case 1 will answer all of them.
Page 2, line 6 from the bottom. Yes. we are considering to have at least three macroeconomical
scenarios. if possible from three prestigious consultants with different political or technical ascription.
These scenarios may approximately converge or diverge between them. In the first case. beyond the
ideological background of the consultants, we will have a good consensus. in the second case we will
have a possible range for the values of the macroeconomics scenario.
Page 2. line $ from the bottom. Of course, there is such consistency. The recent past Argentine
experience do not apply as a rule for the future. In the energy sector there was a tremendous
modernization that change the very inefficient thermal generation sector of the 80's to one of the most
efficient of the world now. At the same time there was an increase of the hydraulic share in the mix of
the energy offer.
Page 2. last line. According to the answer to the former question. it is obvious that the trend in carbon
dioxide emissions relative to economic growth will not be expected to be the same as in the recent past
In any case, there are other key sectors where it is possible to make considerable efforts with the
concept in mind of emission growth targets as explained in the first paragraph of the document.
Page 3. second line. In the Argentine case, this is true to certain extent. Investments, associated with
modern technology. may result in some cases in lower rates of GE1 emission growth.
Page 3, line 6. In developing the targets for 2008-2012, as a first approach. we do not consider necessary
to analyze the non energy industrial emissions. In the 1994 inventory this sector was responsible of less
than 4 % of the carbon dioxide emissions and about 3 % of the methane' ones, which are by far the
more relevant gasses of the Argentine emissions in terms of GPW. Perhaps. it will be necessary to
analyze the cement industry which accounts for the 80% of this 4 %. Countries which have now a
similar economical profile to that Argentina will have in the 2010 show no very larger shares of the
non energy industrial sector. la will be welcome any suggestion on the developing of new technologies
that may result in new sources of emissions.
Page 4. Second paragraph For the time being. we did not identify modeling capacity within the key
sectors of the Argentine Government We expect to have an answer to this point soon
PAGE:01
TO:777 4870
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JAN-08-1999 10:26
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P.03
A STRATEGY PROPOSAL BY THE SECRETARIAT OF
NATURAL RESOURCES AND SUSTAINABLE DEVELOPMENT
POST COP4
After COP4, the strategy of the Secretariat of Natural
Resources and Sustainable Development (SRNDS) should
be centered in two large columns: definition of the
objectives for COP5 and the fluid operation of the
Office of Joint Implementation to administer the Kyoto
Protocol mechanisms.
1. Working Plan for the definition of objectives
1. Introduction
In his speech at COP4, the President announced that
Argentina will establish its objectives for greenhouse
gas emissions (GHG) for the period 2008-2012 in the
future COP5.
Therefore, it is appropriate to review some aspects on
the way in which the national GHG objectives were
established in the Kyoto Protocol. It is also
necessary to describe briefly the methodology for the
establishment of national objectives. Both aspects
are necessary for the formulation of a basic plan of
activities, to facilitate the adoption of GHG
emissions compatible with national sustainable
development.
1.1 Emission Quotas in the Kyoto Protocol
The emission quota adopted in the Kyoto Protocol for
the period 2008-2012 have been expressed as
percentages of the emissions of the base year 1990.
For countries with transition economies, it was
decided that such quotas should be expressed referring
to the base year that the country had chosen or would
choose in the future, if the first national
communication had not taken place (article 3.5)
JAN-08-1999 10:27
SCIENCE ECON
777 4870 P.04
An emissions inventory for a base year has the
advantage of automatic adjustments in the case that
methodologies to estimate emissions are modified or
new knowledge improves those estimates. Expectations
are that emission estimates given the change of soils
and forests use may be modified as a result of future
recommendations of the Technical Commission of the
IPCC, formed at a request of the Convention.
In addition, the reference to a base year has the
advantage of allowing relative comparisons among
countries and allows a simpler calculation of savings
in global emissions.
In consequence, it is convenient to formulate
Argentine commitments with reference to a base year,
among other reasons because, if other formula were
used, reductions relative to possible emissions
scenario or fixed quotas of emission for the period
2008-2012, would face criticism and resistance of the
international community.
1.2 Methodology for the Evaluation of Future Emission
Settings (scenario)
The methodology to study possible future reductions of
GEI emissions is to establish a base setting without
an intervention mechanism trying to reduce emissions
(which is known as "business as usual" or BAU
scenery), and then to evaluate possible reductions
through the effect of specific measures in mitigation
settings.
The identification of all these settings is a
prospective work and as such, subject to possible
errors. However, since GHG emissions are closely
connected to economic development, there is little
probability that errors are by excess since the most
probable economic changes, and less predictable, are
recessive crisis.
The practical consequence is that if there is a
negative economic development, it would be relatively
easy to fulfill adopted emission objectives and,
eventually, to remain under them.
Settings of future emissions are based on future
economic settings. To that end, consistent hypotheses
JAN-08-1999 10:28
SCIENCE ECON
777 4870 P.05
of the international situation and the evolution of
the national economy are established. The economic
sectors more relevant for GHG emissions are treated in
a more detailed way, incorporating foresighted
technological innovations. Emissions are calculated
following approximately the same methodology of
National Inventories. The same procedure is followed
in mitigation settings, including hypotheses on
mitigation measures that might be tested.
There are mathematical models that allow a consistent
adjustment of economic hypothesis and the calculation
of GHG emissions.
In discussions with EPA officials during COP 4, they
offered the model used by the U.S. in the negotiation
with Kyoto ("Battelle's Second Generation Model").
2. Second National Communication
Argentina presented its first National Communication
in June 1997, after ratifying the Framework Convention
on Climate Change. That was done in spite of the fact
that the base study of the National Communication
Project ARG/95/G31 was not finished until the end of
1997.
At that time, the Foreign Office gave priority to
presenting the document in a timely fashion, which was
appreciated by the Convention's Secretariat, the UNDP
and the GEF. However, given the urgency to present it
on time, the National Communication provides no
information on emissions of the agricultural sector
and on the change of land and forestry uses. These
aspects were later completed in the final report of
the Project ARG/95/G31, as well as the vulnerability
studies, which are slightly mentioned in the National
Communication.
The same pressure to deliver the communication on time
impeded the previous discussion with interested
private sectors, businessmen and NGOs. Though
industrial activities (not including energy
consumption which in the inventory appears under
fuels) only contribute a small percentage to GEI
emissions (3%), its precise determination is important
for the possible accreditation of mitigation
flex
JAN-08-1999 10:28
SCIENCE ECON
777 4870 P.06
activities within the framework of the Kyoto Protocol
in that sector.
Some sectors were concerned by the figures in the
National Communication. Discrepancies may be
explained by ignorance of the methodology to prepare
inventories of such National Communications, according
to IPCC regulations, to the utilization of different
analysis years, or to possible errors on the
production volume of certain industrial activities in
the National Communication.
In this sense, the second National Communications of
the Annex I countries have corrected the initial
inventories of their first Communications with figures
of generally between 1% and 3% of total emissions, and
in some cases, largely exceeded those figures. In
general, corrections are a result of better
statistical information and detection of errors.
The presentation of a second National Communication,
before or during COP 5, would facilitate a complete
official document (including emissions by all sectors
]nathm.
and gases considered in the Kyoto Protocol). If the
industrial sector had errors, they could be corrected
by the introduction of new estimates for years 1990
and 1994, as other countries of Annex T have done.
Basically, by its previous submission to interested
sectors for consultation and evaluation, any doubts
about the information on which the Argentine
Government will have to base important decisions would
be cleared away.
There is a more important reason to have a second
base year
National Communication before announcing any
commitment: since commitments should refer to a base
year, year 1997 would be a positive choice since
preliminary estimates show that emissions in the
energy sector are 10% higher than in 1994 and 20%
higher than 1990 (which are the years accounted for in
the first National Communication). The election of
this base year would be worthy of consideration
because in 1990 Argentina suffered a deep economic
recession and during the decade of the 80's emissions
were approximately at the 1994 level. It is worth
noting that countries with transition economies have
had the liberty to choose their base year.
JAN-08-1999 10:29
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777 4870 P.07
Finally, the Argentine decision to establish emission
objectives for the period 2008-2012, should be
formalized in some way. Since the Kyoto Protocol, as
it is, would not allow voluntary commitments by non
Annex-I countries, and it would be difficult to change
this situation in the near future, the declaration of
a commitment in the National Communication would give
it an official value because Argentina would thus be
complying with articles 3 and 4.2 of the Convention.
3. Objectives
3.1 Main Objectives
a) To conduct the inventory of GHG emissions for 1997
inertary
and revise those of years 1990 and 1994.
b) Projection of emissions for the year 2010,
assuming the absence of reduction measures, with
BAU
different hypothesis of economic evolution and a
moderate technology development ("business-as-usual")
c) To establish different mitigation scenarios. To
mitigation
analize their effects on emission reductions as well
as costs and benefits.
d) To elaborate alternatives for the Argentine
taget options
proposal of GHG emission objectives referable to base
year 1997.
e) To prepare the second National Communication.
natl comm
3.2 Secondary Objectives
a) To establish a data base with detailed information
conducive to the above objectives, at the SRNDS.
b) To install at the SRNDS, the capacity to design
modeling
and audit studies of GHG inventories and prospective
capacity
studies of emissions and mitigation measures.
c) To generate the capacity for the execution of
National Communications
4. Methodology
The following are only general outlines.
JAN-08-1999 10:30
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777 4870 P.09
December 1998.
b) Incorporation of experts and consultants.
- Identification and contacts: December 1998 and
January 1999.
- Reference terms: January 1999.
- Incorporation: February 1999.
c) Execution of the central technical work
February, March and April 1999.
d) First completed report of the experts
May 1999.
e) Technical auditing of work by the experts
May 1999.
f) Drafting of the Inventory
June 1999
5.2 Prospective Analysis of the economic,
technological and emissions scenarios and of
mitigation scenarios
a) Integration of follow-up teams and discussion in
the Secretariat.
December 1998.
b) Application for foreign assistance.
December 1998.
c) Incorporation of experts and consultants.
- Identification and contacts with national experts:
December 1998 and January 1999.
- Reference terms: January 1999.
- Incorporation: February 1999.
d) Reception of technical assistance. Modelling and
technological settings.
JAN-08-1999 10:30
SCIENCE ECON
777 4870 P.08
a) Centralization of the direction of the Project at
the Secretariat of Natural Resources and Sustainable
Development.
b) Contracting of national experts from private
organizations, CONICET (National Council for
Scientific and Technical Research) and Universities,
to conduct studies in specific project areas. (The
inclusion of experts from other official agencies
should be analyzed).
c) External technical assistance to elaborate
scenarios for economic-technological developments and
coherent emissions using mathematical models, as well
as for the prospective analysis of technological
development of certain key activities for GHG
emissions.
d) Technical auditing of experts' work by the SRNDS
(in some subjects experts from other areas of the
national Government will be requested for auditing).
e) Technical auditing by international experts.
£) Discussion of the Project's results with related
Government areas, with businessmen, NGOs and other
sectors potentially interested.
g) Final editing of the documents and archives of the
data base by the SRNDS.
5. Target Date
Direction of the Project. Definition of direction
scheme, responsibilities, etc.
December 1998.
5.1 Inventory
a) Integration of the technical teams of the
Secretariat to:
- Request and reception of external technical
assistance.
- Technical auditing.
JAN-08-1999 10:31
SCIENCE ECON
777 4870 P.10
February and March, 1999
e) Programing models with hypotheses of economic
scenarios.
April and May 1999.
f) Final report of experts.
June 1999.
a)
Analysis and development of targets.
*
June 1999.
5.3 National Communication
a) Incorporation of consultants
- Identification and contacts with experts: March
1999.
- Reference terms: March 1999.
- Incorporation: April 1999.
b) Drafting of the National Communication: April and
May, 1999.
c) Provisional publication: July 1999.
5.4 Discussion of the National Communication
Including inventory and Argentine proposal for GEI
emission objectives: July, August, September 1999.
5.5 Final Edition of the National Communication:
October 1999.
6. Resources
The final working of the plan of activities depends on
the resources that are assigned.
According to discussions with EPA officials, there is
a possibility of their technical and financing
support.
JAN-08-1999 10:31
SCIENCE ECON
777 4870 P.11
Financing support from GEF does not seem possible
because discussions and approval of projects are
extremely slow, as happens also in the beginning phase
of implementation with UNEP. Even presenting the
project in December, it would be approved in the
meeting of the executive committee in March, if there
were a strong political disposition. Even then,
initiation of the work would only be possible in June
and there would be no time for the necessary
discussion in such an important subject.
Therefore, it is convenient to start soon with all the
mechanisms for the initiation of the action plan in
order to define the objectives committed by the
President.
7. Conclusion
Given all the above and the urgency of the related
activities, the following should be defined as soon as
possible:
General Outline of a Strategy for Cop 5 (for which
this proposal is presented).
"Role" of the national environmental agency.
Participation of the sectors involved (public and
private).
Reconsideration of activities and competence areas
of the Foreign Office and the Secretariat of
Natural Resources and Sustainable Development.
JAN-08-1999 10:32
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777 4870 P.12
2. Operation of the Office of Joint Implementation
Following are the main issues that should be defined
in order to strengthen the action of the Office:
1. Adoption of the proposed Operation By-Laws of the
Office of Joint Implementation (OJI) *
2. Adoption of the draft "Basic Outline for the
Presentation of Projects to OJI". (Formal
procedures are important in order to start
automatizing the operation of the Of fice) *
3. Constitution of the Advisory Committee of OJI*.
4. Definition of the Formalities (form-filling) for
accreditation of project certifiers*.
5. Identification of priority sectors for the OJI*.
6. Follow-up all discussions on the definition of
regulations and institutions of the mechanisms of
the Kyoto Protocol as well as the Joint
Implementation Activities to strengthen the
institutional capacity of the office. To
establish connections between the Office and
other programs, such as the US initiative on
Joint Implementation.
*There are final drafts, or nearly finished, for all
these cases.
TOTAL P.12
do CH₄ emissions from unestoch vary
between contined feed lot and free range?
AGLINK - ARGENTINA
Summary of Scenarios
Variables
1
2
3
4
5
WPrice Wheat
WPrice Maize
WPrice Oilseeds
WPrice Oils
1
Beef Producer Price
=
II
WPrice Butter
WPrice Cheese
WPrice Skim Milk
WPrice Whole Milk
Productivity-
=
=
=
Fattening
Productivity-
1
=
=
=
Cow-Calf
BEST
WORST
AGLINK - ARGENTINA
GRAPHICAL DESCRIPTION
Argentina model
Legend
Exogenous
Endogenous, identity
Endogenous, behavorial
No or very small direct influence of world price on domestic markets.
Influenced by outside factors (other markets, other countries or world price).
Influencing other sectors.
Links inside the sector.
Argentina grains and oilseeds markets
wheat and coarse grains
oilseeds and products
food demand system
feed demand system
feed cost index
price
wheat
maize
rice
beef
income
price
coarse
meals
soybeans
non-ruminant
ruminant
quant
quant.
grains
meals
wheat
X
exports
X
X
X
coarse grains
X
X
X
X
X
coarse grains
X
X
X
X
meals
X
X
X
X
X
meals
rice
X
X
X
X
X
X
stocks
soybeans
X
X
X
meals
X
yield
oilseeds
world price
meals
price
price
meals
exports
return per
production
Brazil (4)
price
world price
hectare
oilseeds
oilseeds
exports
yield
stocks (1)
crush
return per
hectare
oils
world price
production
oilseeds
yield
price
production
oilseeds
stocks
oils
return
wheat
production
barley
maize
sorghum
soybeans
sunflower
rice
wt &sb
beef prod
area
wheat
X
X
X
X
X
X
X
beef price
oils yield
oils
oils
barley
X
X
X
X
X
X
X
stocks
consumption
income
maize
X
X
X
X
X
X
X
X
sorghum
X
X
X
X
X
X
X
X
soybeans (2)
X
X
X
X
X
X
X
oils
sunflower
X
X
X
X
X
X
X
exports
rice
X
pasture
X
X
X
X
wt & sb (3)
X
X
X
x
area allocation system
(1) exogenous for wheat and rice (2) single crop (3) soybeans as a double crop with wheat (4) Only for wheat mercosur external tariff
Argentina milk and dairy products
Wholesale price
margin
beef price
milk cow
producer
milk
feed cost
crop price
inventory
milk price
yield
milk
feed demand
production
cheese
SMP
production
production
other
fresh prod.
products
trade
cheese
butter
WMP
prod. of fresh
SMP
exports
production
production
products
exports
cheese
butter
butter
WMP
WMP
fresh prod.
SMP
consumption
consumption
exports
exports
consumption
consumption
consumption
Mercosur
oil price
milk
tariff
Mercosur
cheese
surplus
tariff
price
world price
world price
WMP
butter
price
SMP
price
price
Mercosur
tariff
wholesale
milk price
world price
Milk surplus: milk production minus milk equivalent of other dairy products and fresh products production and of WMP, butter and cheese consumption
Argentina meats and eggs markets
crop price
milk price
beef cow
beef
inventory
production
poultry
trade
feed cost
pork
feed demand
E15 net trade
production
poultry
feed demand
production
market
clearing price
beef
beef
exports
CHL, PRY,
URY, BRA
eggs
pork
pork
trade
price
imports
eggs
feed demand
production
price
beef
quant.
pork
poultry
eggs
wheat
income
wheat price
beef
X
X
X
X
X
poultry
price
pork
X
X
X
poultry
X
X
X
X
feed cost
eggs
X
eggs
X
price
demand system
SAT - SIGMA
DESCRIPTION
ANNEX I
EX-ANTE ANALYSIS OF AGRICULTURAL RESEARCH IMPACT:
THE SURPLUS BY ADOPTION OF TECHNOLOGY (SAT) MODEL. 10
1.
INTRODUCTION
The permanent desire to reduce the uncertainty associated with the future, has created
a demand for tools to assist decision-makers at different levels in the process of agricultural
research resource allocation.
There exists a significant body of previous work related to ex-ante evaluation of
returns to investments in agricultural research (Piñeiro, 1984; Pinstrup-Anderson, 1977;
Scobie, 1979; Davis, 1984; Davis, Oram and Ryan, 1987; da Cruz, de Castro, Tollini y
Sugai, 1988; Evenson, 1988). The most commonly used approach is that of the estimation
of the economic (producer + consumer) surplus attainable as a consequence of supply
function shifts attributable to the adoption of technological innovations.
The study to be presented in this paper applies a methodology that differs
considerably from the most commonly used ones. It assumes that a single aggregate supply
curve for agricultural products does not accurately describe the reality, especially in LDCs.
Should this assumption be correct, the observed variability in the universe of agricultural
firms should be taken into account before attempting to evaluate the consequences of
alternative decisions concerning investments in generation and transfer of agricultural
technology.
2.
THE MODEL.
SAT is a tool that consists of a mathematical simulation model that allows for ex-ante
10 Based on Cap, E.; Miranda, O.: "Análisis "ex-ante" de impactos de la investigación agrícola en la
Argentina para siete rubros productivos en escenarios alternativos" (Ex-ante analysis of agricultural research
impacts in Argentina for seven productive activities under alternative scenarios). In: Actas del Simposio
Internacional: La Investigación Agrícola en la Argentina. Impactos y Necesidades de Inversión (Proceedings
of the International Symposium: Agricultural Research in Argentina. Impacts and Investment needs). Eds.:
Cirio, F.; Castronovo, A. 1994. INTA, Bs. As., Argentina.
22
analysis of aggregate sector impact (measured as changes in total output) of alternative
strategies for agricultural research resource allocation. SAT estimates how much more would
be produced, compared to current levels projected into a given time horizon, IF SPECIFIC
TECHNOLOGIES ARE GENERATED AND TRANSFERRED.
The following assumptions are made:
There exist three technological levels (TL) among farmers of homogeneous
agroecological areas: low (LTL), medium (MTL) and high (HTL),
respectively associated with a set of techniques, inputs and a resulting
productivity indicator (average yield) (see Fig. 1).
L
LTL
MTL
HTL
K
Figure 1. Stylized representation of technologies implemented by
farmers, for 2 inputs (K and L).
23
There exists "upward mobility" among TLs, which is made possible by the
adoption of AVAILABLE techniques and inputs, together with the capacity to
use them efficiently. This "inter-level mobility" (ILM) rate is defined as the
percentage of the area¹¹ of a given TL that gets "promoted" each year to the
next TL, in terms of productivity¹². This process is represented by a linear
function. This mobility is unidirectional, that is, promoted areas cannot be
"demoted".
The National Agricultural Research System, has the capacity to generate NEW
technology. Its (future) adoption by farmers is represented by a non-linear
function (sigmoid), its parameters given by the nature of the innovation and
the socio-economic profile of the target audience (see Fig. 2).
11
Or any other unit of measurement that would be suitable as an indicator of scale of production (i.e., "bee hives" for honey
production).
12 The rate of mobility, such as it has been defined, can be conceived as an indicator of the RATE OF ACCUMULATION OF
HUMAN CAPITAL in the agricultural subsector which is being considered. This is so since, to have access to inputs and information on
its optimal use is a necessary but not sufficient condition to attain the productivity levels associated with the top TL. To the acquisition of
the needed KNOWHOW (which is not the same thing as having access to the information), we must add an enhanced entrepreneurial ability
(including the means to evaluate both downside risks and upside potential together with the willingness to take the risks). This implies a
process which is unavoidably slow and accumulative, clearly linked to one of the least studied components of any economic system, which
Hayami and Ruttan (1985) call "cultural endowment". This cycle of human capital accumulation adds credibility and support to the
assumption of the unidirectionality of the phenomenon of inter-level mobility. Although it is acknowledged that micro (i.e., erroneous
business decisions) or macroeconomic circumstances (i.e., changes in the price ratios) can lead to a drop in productivity due to the
suboptimal utilization of inputs, that does not necessarily imply an involution in the process of human capital accumulation: if the
environment returns to its ex-ante status, productivity would probably pick up after a brief lag. A parallel could be drawn between this
situation and the unutilized capacity of an industry, augmented as a consequence of business cycle-related causes and its incidence on fixed
costs.
24
% of adoption
100
80
60
40
20
0
1
2
3
4
5
6
7
8
9
10
years
Figure 2 Cumulative adoption percentage for an adoption ceiling
(K) of 0.99 and an adoption half-time (Φ) of 4 years.
The model key component consists of a reconstruction of the process of adoption by
farmers of technological innovations that shift the isoquant that represents them (as a
combination of inputs and factors), achieving a more efficient use of resources, which implies
a reduction of production costs. The most significant implicit assumption that SAT makes
is that the coexistence of the three isoquants or TLs, cannot be satisfactorily explained
resorting to analytical tools provided by the neoclassical economic theory, since according
to it, if farmers are profit-maximizers, they would all move to the isoquant nearest to the
origin (the chosen point on that isoquant would depend on price ratios). This does not imply
that the rationality of farmers is being questioned. Instead, it recognizes the existence of
barriers associated with incomplete and/or non-existent markets, as well as of restrictions to
the adoption of available technology and its optimum utilization, caused by the undersupply
of public goods (like infrastructure) or pure private ones (like refrigeration or storage
capacity) or mixed ones, like entrepreneurial skills or level of training of farmers.
The SAT model is not to be thought of as an alternative to the other ones proposed
in the literature, but as a contribution that improves them. It tries to identify and explain the
dynamics of two processes that take place at the same time. According to previous studies
25
(Byerlee, D. and Hesse de Polanco, E., 1982), the adoption of a specific innovation occurs
at a rate which is considerably higher than the values found for the inter-level mobility (Cap
et al, 1993). There is another significant difference between these two processes: its
mathematical representation (linear for the ILM and non-linear (sigmoid) for the adoption of
a single innovation).
The SAT model treats the surplus produced in excess of the current output, as a
function with the following general expression:
E, = f I [w[ R (Bp) 11, x ᵢ [ YP ( tec P),
pₜ ((Φ(tec P), K, α (Bp) S ( tec d E D, tec P) ;
where:
Et:
surplus attained at time t.
Xₜᵈ: increase in productivity (yield) at time t by tapping into the stock of
technology available at time t₀.
w:
annual rate of inter-level mobility.
R: restrictions to ILM.
Bₚ:
supply of public goods (extension, infrastructure, macroeconomic policy, etc).
X[P: increase in productivity (yield) at time t attributable to the adoption of new
technology (X,P > 0 if t > = td, where td is the time of availability of the
technology; X[P = 0 if t < tᵥ).
YP: potential productivity of the new technology.
tecp: non-available technology (to be developed).
tecd: available technology.
D: stock of available technology.
Pt:
level of adoption of tecᵇ at time t (pₜ > 0 if td ≥ t).
0:
parameter that measures the time it takes for 50% of farmers to adopt a
specific new technology.
K:
adoption ceiling, K E (0,1]
α:
restrictions to the adoption of a specific technology.
STL: correction factor for sustainability of the set of technologies used at TL, S E
(0,1]
26
z:
vector of random variables.
The problem (P) that policy-makers face, can be formulated as follows:
(P)
max E, (choosing Bₚ, tec)
subject to restrictions, i.e., budgetary¹³
For this theoretical model, as Eₜ approaches its maximum from the left, its partial
derivatives are associated with a sign (+ or -), which is consistent with explicit or implicit
hypotheses of the model.
1. ax εEₜ d X ax dw d X dR dw X dBp dR > 0
2. ¿E, X ax P > 0
ax
P
ду
P
3. ӘЕ, X ax p X др < 0
ax
p
др
дф
4. ax ӘЕₜ P X ax др P X ak др > 0
5. ax ŒE, P X ax др P X др да X дВр да >0
6. εE, as ≥ 0 if S=1;
>0 if S<1
2.1 EMPIRICAL MODEL
The empirical formulation of the SAT model is as follows:
13 This optimization problem should be analyzed using a piecemeal/second best approach, since neoclassical economics cannot
be used due to the violation of its fundamental assumptions. A viable alternative would be to use benefit/cost ratio (B/C) indicators or
internal rates of return (IRR) PER RESTRICTION to the inter-level mobility for the available stock of technology and PER SUBJECT
MATTER for technologies that are still in the development process.
27
T
K
3
VEτ = Σ Σ Σ ( ISᵢₖ X [ X ((Wᵢk ) ]
=0
k
/
+ [ ßPᵢₖ X (K/ (1 + X Aᵢₖₜ ) I
where:
VEₜ: value in US dollars of the additional output at time T (simulation
horizon). Applying the discount rate to the sequence {VEₜ}₀ᵀ, the Net
Present Value (NPV) can be calculated.
t:
time period (year).
k:
crop or productive activity (K: total # of items).
i:
technological level, i E [1,2,3], where 1=L, 2=M and 3=H.
S:
correction factor for sustainability, S E (0,1]
ßd:
productivity gap between actual and attainable yields using
AVAILABLE TECHNOLOGY, per TL.
A:
area dedicated to produce k.
ßP:
productivity gap between actual and attainable yields using
TECHNOLOGY NOT YET AVAILABLE, per TL.
K:
adoption ceiling. K in (0,1].
e:
base of natural logarithms.
α:
parameter of the sigmoid function, associated with restrictions to
adoption of technology.
0:
adoption half-time: number of years elapsed between availability of
technology and its adoption by 50% of the farmers.
pFOB: FOB price of item k.
NOTE: the first term of the equation allows the estimation of the increase in output, at time
T, attributable to the adoption of available technology and its optimal use. The second term
quantifies the pure effect of NEW TECHNOLOGY (net social benefit).
2.2
REQUIRED INFORMATION
The SAT model requires descriptive and prospective input data, as follows:
28
GENERAL (descriptive)
Yield per TL.
Area per TL.
Annual inter-level mobility rates (ILMR).
Price elasticity of supply (whenever possible, it should be
discriminated by TL).
SPECIFIC (prospective)
Importance of the problem to solve or the technical innovation to
produce, i.e., yield losses in kg/ha due to a pest or disease (in these
cases, information on frequency of occurrence is also required).
Geographical area affected by the problem or to benefit from the new
technology.
New state-of-the-art of production technology, should the research be
successful, measured in productivity or quality.
Year of availability of the new technology.
Research costs (direct, indirect and labor).
REFERENCES
Byerlee,D. Hesse de Polanco,] (1982): La Tasa y la Secuencia de Adopción de
Tecnologías Cerealeras Mejoradas: El Caso de la Cebada de Secano en el Altiplano
Mexicano. (Documento de Trabajo, 82/6.) CIMMYT, México.
Cap,E. (1990): Agricultural Research Resource Allocation at the National Level in LDCs.
A discussion on priority setting models. Working Paper, University of Minnesota,
Minneapolis.
; Obschatko, E.; Castronovo,A.; Miranda,O.; Serignese,A (1993): Perfil
Tecnológico de la Producción Agropecuaria Argentina. 2 vol. INTA, Dirección
29
Nacional Asistente de Planificación, Dirección de Planificación Estratégica, Buenos
Aires.
da Cruz,E.; de Castro,J.; Tollini,H.; Sugai, Y. (1988): "Ex-Ante Evaluation of Agricultural
Research in Brazil". In: Economics Evaluation of Agricultural Research:
Methodologies and Brazilian Applications. (Eds: Evenson,RE et al.) Yale Univ.
Press.
Davis,J; Oram,PA; Ryan,JG (1987): Assessment of Agricultural Research Priorities: An
International Perspective. ACIAR Monograph N° 4.
(1984): A partial equilibrium multi-country model for agricultural research
evaluation: derivation of formulae. ACIAR Research Priorities Project Working
Paper N° 4.
Evenson,RE (1977): "Comparative evidence on returns to investment in National and
International Research Institutions". In: Resource Allocation and Productivity in
National and International Agricultural Research. (Ed: Fishel,WL) Univ. of
Minnesota Press, Minneapolis.
(1988): "Ex-ante Research Evaluation and System Design Assessment". In:
Economics Evaluation of Agricultural Research: Methodologies and Brazilian
Applications. (Eds: Evenson, RE et al.) Yale Univ. Press.
; Waggoner, PE; Ruttan, VW (1979): "Economic benefits from research: an example
for agriculture". Science 205, 1101-1107.
Hayami, Y.; Ruttan, V. (1985): Agricultural Development. An International Perspective. The
Johns Hopkins University Press, Baltimore and London.
INTA (1993): Caracterización Preliminar para la Fijación de Prioridades en el PAN
Cereales y Oleaginosas. (Publicación Miscelánea, 4.) Dirección Nacional Asistente
de Planificación, Buenos Aires.
30
Pinstrup-Anderson,] P; Franklin, D (1977): "A Systems Approach to Agricultural Research
Resource Allocation in Developing Countries". In: Resource Allocation and
Productivity in National and International Agricultural Research. (Eds: Arndt, GM;
Dalrymple, DG; Ruttan, VW) University of Minnesota Press, Minneapolis, 416-435.
Piñeiro, ME (1984): An Analysis of Research Priorities in the CGIAR system: a discussion
paper. FAO, Roma.
Scobie, GM (1979): Investment in Agricultural Research: Some Economic Principles.
Working Paper N°61, Washington, DC.
31
Argentina economic forecast:
1999: -1.5% (estimates go as low as -4.0%)
2000: 3.0%
2001-2005: 4.7% annual growth
Source: World Bank
OFFICE OF ECONOMY & ENVIRONMENT
401 M Street, SW (Room 3205)
Washington, DC 20460
FAX COVER SHEET
DATE: July 14, 1999
ORGANIZATION: TO: Joe Aldy
CEA
MAIL CODE:
PHONE: 395-1455
FAX: 395-6870
*****
FROM: Leranne Clements
ORGANIZATION: US EPA/OP/CPPD
MAIL CODE: 2175
PHONE: 260-4216
FAX: 260-6405
PAGES INCLUDING COVER SHEET: 2
COMMENT:
Joe-
These are the questions Barros seNt over --
doyou (1,2,4)? any Chie to the answers particularly
Thankx-
Leianne.
100
EPA CLIMATE CHG
6405 260 202 IS
14:53
07/14/99
JUL-62-99 17:32
FROM:CCLI
541143488678
TO:1 202 260 6405
PAGE:01
FAX
Date:7/12/99
To. Mr. Maurice N. Lefranc
From. Vicente Barros
Climate Policy and Programs Division U.S.
Project Manager
Environmental Protection Agency
N° de Fax (202) 260-6405
Phone: +5411-4348-8685/8678
Fax: )5411-4348-8678
Country U.S.A
Country Argentina
Subject: Technical Assistance
Page number Two
C.C. Barbara De Rosa-Joynt (202) 647-0191
Philiph Covington Fax (5411-4811-1812
/1813
Dear Maurice Lefrane
Regarding the technical assistance to the project "Working Plan for'the Adoption of Argentine GIIGs
Emissions Targets," US Assistance in the following items is necessary.
1. Overview of productivity trends for major cercals and oilseed crops in the USA - in particular for
corn. wheat, soybean and sunflower (specifically the next decade and a halt's prospects for
agriculture technology and yields in the USA). We are interested in new technologies that hold
potential for increasing yields; the prospective for farmers to adopt these technologies; What are
going to be the contributions of genetics, improved management systems, AG chemicals, crop
monOitoring agriculture and the constraints (economical and others) for the adoption of these
technologies.
2. Technological trends in energy efficiency for domestic lighting and home appliances (projections
up to 2012).
David Chien EIA
3. Technological trends (2000-2012) in transport efficiency due to:
- Improvements in the efficiency of combustion engines
- Impacts of design. weight and materials in automobiles, trucks and buses on transport efficiency.
4. Projections of international commodity prices of major cereals, ollseeds and beef - up to 2012 (Wc
have a model that requires this input).
022
EPA CLIMATE CHG
6045 260 202 IS
14:54
07/14/99
Macroeconomic Forecasts
1999-2012
CEMA, 1999
July 21, 1999
Centro de Análisis Aplicado CEMA [email protected]
Methodology
Forecasts
2002-2012
High scenario
Short run
1999-2001
Medium scenario
Low scenario
Sectorial GDP
S= f(V1, V2... Vn)
GDP =
X, M, Investment
-
Three behaviors arises from
research analysis
Consumption for difference
Centro de Análisis Aplicado CEMA [email protected]
1
Short run (1999-2001)
Assumptions
World Economy
Deceleration in growth in US economy
US interest rates remains in similar in the
neighborhood of 5%
Increase in commodity prices from 2000 year
Japan under recession in 1999, low take off in 2001 (moneson)
oil production
Fiscal Balance in Brazil remains under control
expected to
debt payments 6 %of GDP
receive faster
Centro de Análisis Aplicado CEMA [email protected]
than ag production
99:0il
$20/64, 710% then 1 at very slow sate
Commidity Prices
Tasas de Variación de los precios de las Commodities
Tipo de Commodity
Proyecciones
1981-90
1991-95
1997
1998
1999
2000
2001
Commodities excl Petróleo
-2.3%
4.1%
2.2%
-15.7%
-6.3%
1.7%
5.0%
Agricultura
-3.2%
5.6%
2.5%
-16.2%
-5.2%
1.8%
3.3%
Metales y Minerales
0.5%
0.3%
1.2%
-16.2%
-10.3%
2.5%
12.2%
Fertilizantes
-2.5%
0.7%
-0.1%
2.0%
-5.2%
-4.1%
0.0%
Petróleo
3.3%
-565.0%
-6.2%
-31.8%
-8.2%
13.0%
10.0%
Tasas de Crecimiento en el Mundo
1997
1998
1999
2000
2001
Economias Avanzadas
3.20%
2.20%
2%
2.20%
2.60%
Nuevas Economias Ind. de Asia
6.40%
-1.10%
1.50%
3.90%
5.30%
Latinoamérica
5.20%
2.30%
-0.50%
3.50%
4.40%
Paises en transición (Europa del Este)
2.20%
-0.20%
-0.90%
2.40%
3.60%
Centro de Análisis Aplicado CEMA [email protected]
2
Short run (1999-2001)
Assumptions
Argentina
no significant new
Structural reforms depends on scenario basis
reforms
ms
Recession will finish in 2000 year
Convertibility remains across the years
From 2000 year Brazil solves internal debt problem
(Brazil's GDP growth increase Argentina's export
Centro de Análisis Aplicado CEMA [email protected]
Common to
Short run (1999-2001)
all scenarios
Summary of results 1999-2001
99
00
01
GDP
-3.5%
3.7%
6.1%
Investment
-12.4%
5.3%
10.2%
Consumption
-2.4%
3.9%
5.4%
Imports
-7%
4.8%
9.4%
Exports
0.2%
1.5%
8.5%
Manufactures
-7.4%
3.6%
6.3%
Building
-12.2%
1.8%
8.7%
Agricultural
-2%
3.2%
2.2%
Centro de Análisis Aplicado CEMA [email protected]
3
Long run (2002-2012)
Assumptions
World Economy
Asia solves definitively its financial problem since 2002 (esp. Japan)
Strong growth in Africa, Asia and Eastern Europe (Poland, Hungary)
Latinoamerican Countries growth will be lower than the past decade
High increase in trade flows between regions
Bolivia and Chile will enter into Mercosur Area
IT trade)
Industrialized countries will grow
2002-2004
2005-2008
2009-2012
1.1%
0.8%
0.7%
World inflation remains low < 2%
Better fiscal balances in Argentina, Brazil and Mexico
Centro de Análisis Aplicado CEMA [email protected]
Scenario analysis
GDP path
Long run rate
Avg rate
Evolución de PBI
2012
01 - 12
(a miles de precios de 1986)
30000
High
3.5%
6 %
Alto
Medio
Bajo
25000
Medium
2.1%
4 %
20000
Low
0.7%
2 %
15000
10000
5000
2012
Centro de Análisis Aplicado CEMA [email protected]
4
Scenario analysis
Assumptions
Tasks
State reform (more efficiency in expenditures) - ed, health justice
Tax reform (less distortions in taxes). In in true time fiscal policy
is direct takes greater intluence an
behavior than direct taxes
Labor flexibility - need stray legal framework to sestain afarm
Stable ratio debt/GDP (~38% thout period)
High scenario
Medium scenario
Low scenario
Centro de Análisis Aplicado CEMA [email protected]
Scenario analysis
Resumen de las estimaciones
Alto
Medio
Bajo
Tasa de Crecimiento Promedio del PBI
(a precios de 1986)
1999/1998
-3.5%
2000/1999
3.7%
2004/2000
6.8%
5.8%
4.7%
2008/2004
6.7%
4.4%
2.0%
2012/2008
4.5%
2.6%
0.7%
Industrial
Developing
Countries
Countries
2008/2004
0.8%
4.9%
2012/2008
0.7%
3.3%
Centro de Análisis Aplicado CEMA [email protected]
5
Producto tasas
Escenarios
Alto
Medio
Bajo
1990
1991
10.6%
1992
9.6%
1993
5.7%
1994
8.0%
1995
-4.0%
1996
4.8%
1997
8.6%
1998
4.2%
Scenario analysis
1999
-3.5%
2000
3.7%
2001
6.1%
2002
6.5%
5.8%
5.1%
2003
7.0%
5.6%
4.2%
2004
7.5%
5.5%
3.5%
2005
7.3%
5.1%
2.9%
2006
7.0%
4.7%
2.3%
2007
6.6%
4.1%
1.7%
2008
6.1%
3.7%
1.2%
2009
5.5%
3.1%
0.8%
2010
4.9%
2.8%
0.7%
2011
4.2%
2.4%
0.7%
2012
3.5%
2.1%
0.7%
Centro de Análisis Aplicado CEMA [email protected]
Scenario analysis
GDP by sector
Agricultural perspectives
Increase en productivity
More fertilizers will be use
Improve livestock of cows
Substitution from farmers activities to cattle raising activities
Asia whats may
Tasas de Crecimiento
Sector 1) Agricultura, Caza, Silvicultura y Pesca
open for beet
Escenario Medio
R
2002
2003
+
2004
2005
2006
Agricultura, Caza, Si
2.50%
27%
3.4%
3.5%
3.3%
by 2005-
Agricola
2.30%
2.6%
2.3%
2.3%
2.9%
Pecuario
2.70%
2.9%
5.4%
5 4%
4.0%
Pesca
3.00%
33%
2.5%
25%
23%
Silvicultura Card
2%
2.5%
2.0%
2.0%
1.8%
Tasas dc Crecimiento
date be it
prohibited to
Sector 1) Agricultura, Caza. Silvicultura y Pesca
Escenario Medio
2007
2008
2009
2010
...
2011
:-
2012
hoot math
Agricultura. Caza. Silv
2.7%
20%
1.7%
1.7%
1.5%
1.4%
Agricola
2.5%
17%
1.4%
1.6%
1.4%
1.3%
drease
Pecuario
3.5%
2.7%
2.3%
2.0%
1.7%
1.6%
Pesca
1.8%
10%
10%
1.1%
0.6%
0.6%
Silvicultura Caza
0.9%
1.0%
11%
1.4%
1.4%
1.4%
Centro de Análisis Aplicado CEMA [email protected]
6
Scenario analysis
Manufacturing Activities
The automotive industry will continues its positive tendency
autoports
vehicles
by a new automotive agreement
Food industry will improve its competitiveness trough its
linkage with agriculture sector.
The petrochemical industry will growth by the higher fertilizer's
demand
During the next five years the cement's demand improves
Centro de Análisis Aplicado CEMA [email protected]
Scenario analysis
Manufacturing Activities
TASA DE VARIACION ANUAL CIIU A 2 DIGITOS
DESCRIPTION Escenario Medio
RAMA
2002
2003
2004
2005
it
2006
ELABORACION DE PROD ALIMENTICIOS Y BEBIDAS
15
64%
5.8%
5 5%
5.2%
4 9%
ELABORACION DE PRODUCTOS DE TABACO
16
3.4%
3.0%
2.9%
2.7%
2 2%
FABRICACION DE PRODUCTOS TEXTILES
17
3.4%
3.0%
2.9%
2.6%
2 2%
FABR. DE PRENDAS DE VESTIR, TERMINACION Y TENIDO DE PIELES
18
3 4%
29%
2.9%
2.7%
22%
CURTIDO Y TERMINACION DE CUEROS Y CALZADO
19
5 0%
4 6%
4 4%
4 3%
3.9%
PROD Y FABR. DE PROD DE MADERA Y CORCHO EXCEPTO MUEBLES
20
50%
4 6%
4 4%
43%
3 9%
FABRICACION DE PAPEL PRODUC DE PAPEL
11
5.0%
46%
4 4%
43%
3.9%
ACTIV. DE EDICION E IMPRESION Y DE REPROD. DE GRABACIONES
22
3.4%
3.0%
2.9%
2.7%
22%
FABRICACION DE COQUE, PROD REFINACION DE PETROLEO
23
5.0%
4.6%
4.4%
4 3%
3 9%
FABRICACION DE SUSTANCIAS PRODUCTOS QUIMICOS
24
64%
5.8%
5.5%
5.2%
4 8%
FABR DE PROD DE CAUCHO Y PLASTICO
25
5.0%
4.6%
4.4%
4.3%
3.9%
FABR. DE OTROS PROD. MINERALES NO METALICOS
26
64%
5.8%
5 5%
52%
4.8%
FABRICACION DE METALES COMUNES
27
64%
58%
5 5%
5.2%
4 8%
FABR. DE PROD ELAB DE METAL, EXCEPTO MAQ. Y EQUIPO
28
3 4%
2 9%
2.9%
2.7%
2 2%
FABRICACION DE MAQUINARIA Y EQUIPO
29
5.0%
4 6%
4.4%
4.3%
3.9%
FABR. DE MAQUINARIA DE OFICINA, CONTABILIDAD E INFORMATICA
30
3 4%
3.0%
19%
2.7%
2.2%
FABR. DE MAQUINARIA Y APARATOS ELECTRICOS
31
5 0%
4 6%
4 4%
4.3%
3.9%
FABR. DE EQUIPO APARATOS DE RADIO, TV COMI INICACIONES
32
3.4%
2.9%
19%
2.7%
22%
FABR. DE INSTRUM. MEDICOS, OPTICOS Y DE PRECISION Y RELOJES
33
3.4%
2 9%
29%
2.7%
2.2%
**
FABR. DE VEHIC. AUTOMOT RES, REMOLQUES Y SEMIREMOLQUES
34
50%
4.6%
4.4%
43%
19%
FABR DE OTROS TIPOS DE EQUIPO DE TRANSPORTE
35
64%
5 8%
5 5%
52%
4.8%
FABR DE MUEBLES Y OTRAS INDUSTRIAS MANUFACTURERAS
36
5 0%
4 0%
4.4%
4 3%
3.9%
Too
Industria Manufacturers (VAB)
5.6%
5.0%
4.8%
4.6%
4.2%
Centro de Análisis Aplicado CEMA [email protected]
7
Scenario analysis
Manufacturing Activities
VALOR AGREGADO BRUTO A PRECIOS DE 1986
TASA DE VARIACION ANUAL CIIV. DIGITOS
*
DESCRIPCION Escenario Medio
RAMA
WI 2007
2008
2009
2010
2012
ELABORACION DE PROD. ALIMENTICIOS Y DEBIDAS
15
45%
3 8%
3.3%
30%
2.7%
22%
ELABORACION DE PRODUCTOS DE TABACO
16
15%
1.2%
11.17%
-10%
-1.4%
-18%
FABRICACION DE PRODUCTOS TEXTILES
17
15%
1.2%
0.0%
-1.1%
-14%
-1.9%
FABR. DE PRENDAS DE VESTIR TERMINACION Y TENIDO DE PIELES
18
15%
1.2%
0 0%
-10%
-1.4%
-18%
CURTIDO Y TERMINACION DE 'UEROS CALZADO
19
3.4%
2.9%
24%
2.0%
1.7%
1.2%
PROD Y FABR DE PROD DE MADERA Y CORCHO EXCEPTO MUEBLES
20
3.4%
2.9%
2.4%
2.0%
17%
12%
FABRICACION DE PAPEL Y PRODUCTOS DE PAPEL
21
3.4%
2.9%
24%
2.0%
1.7%
1 2%
ACTIV DE EDICION IMPRESION Y DE REPROD DEGRABACIONES
22
1.4%
12%
0 0%
-1.1%
-13%
-1.9%
FABRICACION DE COQUE, PROD REFINACION DE PETROLEO
23
3.4%
29%
24%
2.0%
17%
1.2%
FABRICACION DESUSTANCIAS Y PRODUCTOS QUIMICOS
24
4.5%
38%
3.3%
3.0%
2.7%
2.2%
FABK EPROD DECAUCHO Y PLASTIC
25
3 4%
28%
1.4%
20%
1.7%
1.2%
FABR OTROS PROD MINERALES NO METALICOS
26
4.5%
3.8%
3.3%
29%
2.7%
22%
FABRICACION DE METALES COMUNES
27
45%
3 8%
3.3%
2.9%
2.7%
2.1%
FABR PROD ELAB. DEMETAL EXCEPTO N Y EQUIPO
28
1.5%
1.2%
0.0%
-1.1%
-13%
-1.9%
FABRICACION DE MAQUINARIA Y EQUIPO
29
34%
1%
2.4%
20%
1.7%
1.2%
FABR DE MAQUINARIA OFICINA CONTABIL IDADI INFORMATE A
30
1.5%
12%
0 0%
-11%
-14%
-1.9%
FABK DE MAQUINARIA Y APARATOS ELECTRICOS
31
3 4%
2.8%
2.4%
2.0%
1.7%
1.2%
FABR DE EQUIPO Y APARATOS DE RADIO. TV Y COMUNICACIONES
32
15%
1.2%
0.0%
-1 1%
-14%
-18%
L'ABR DEINSTRUM. MEDICOS, OPTICOS Y DE PRECISION Y RELOJES
33
1.5%
1.2%
0%
-1.1%
-1.3%
-1.9%
FABR DL VEHIC AUTOMOTORES REMOLOUES SEMIREMOLOUES
34
34%
2 N%
2.4%
20%
1.7%
1.2%
FABR. DE OTROS TIPOS DE EQUIPO DE TRANSPORTE
35
4.5%
3.8%
3 3%
30%
2.7%
22%
FABR DE MUEBLES ) OTRAS INDUSTRIAS MANUFACTURERAS
36
3.4%
2.9%
2.4%
20%
1.7%
1.2%
Industria Manufacturers (VAB)
1,5
3.8%
3 2%
2.6%
2.2%
1.9%
1.4%
Centro de Análisis Aplicado CEMA [email protected]
Scenario analysis
Manufacturing Activities
VALOR AGREGADO BRUTO A PRECIOS DE 1986
TASA DE VARIACION ANUAL CUU A DIGITOS
DESCRIPTION Escenario Medio
RAMA
2002
2003
2004
no 2005
2006
FABRICACION DE COQUE, PROD. REFINACION DE PETROLEO
23
5.0%
4.6%
4.4%
4.3%
3.9%
FABRICACION DE PROD DE REFINACION DEL PETROLEO
232
5 0%
46%
4 4%
4.1%
38%
FABRICACION DE SUSTANCIAS Y PRODUCTOS QUIMICOS
24
6.4%
5.8%
5.5%
5.2%
4.8%
FABRICACION DE SUSTANCIAS QUIMICAS BASICAS
241
6 4%
5 8%
5 5%
5.2%
4.8%
OTROS PROD QUIMICOS (plaguicidas, pinturas, medicam prod. Limpieza)
242
6 6%
5.8%
5.5%
5 2%
4.8%
FABR. DE FIBRAS MANUFACTURADAS
243
19%
5.8%
5.5%
5.2%
4.8%
FABR. DE PROD. DE CAUCHO Y PLASTICO
25
5.0%
4.6%
4.4%
4.3%
3.9%
PRODUCTOS DE CAUCHO (cubiertas y curneras)
251
3 2%
2.7%
4 4%
4 3%
39%
FABRICACION DE PRODUCTOS DE PLASTICO
252
5.3%
4.8%
4 4%
4 3%
3 9%
FABR. DE OTROS PROD. MINERALES NO METALICOS
26
6.4%
5.8%
5.5%
5.2%
4.8%
VIDRIO Y PRODUCTOS DE VIDRIO
261
43%
45%
4 2%
5.6%
3 5%
PROD. MINERALES NO METALICOS (cemento, ceramiles. cal yeso)
centert
269
7.1%
6.2%
5.9%
5.1%
5.3%
FABRICACION DE METALES COMUNES
27
6.4%
5.8%
5.5%
5.2%
4.8%
INDUSTRIAS BASICAS DE HIERRO Y ACERO
271
6 9%
62%
5.7%
5 4%
5.2%
ALUMINIO (primario y semiclaborado)
272
4 6%
5 8%
5.7%
5.0%
4.8%
FUNDICION DE METALES (hierro, ncero metales no ferrosos)
273
2.8%
2.1%
2.8%
2.7%
0.9%
FABR. DE AUTOMOTORES. REMOLQUES Y SEMIREMOLQUES
34
5.0%
4.6%
4.4%
4.3%
3.9%
FABRICACION DE VEHICULOS AUTOMOTORES
341
59%
60%
50%
45%
4.1%
Centro de Análisis Aplicado CEMA [email protected]
8
Scenario analysis
Mining
MINAS Y CANTERAS
Escenario medio
2002
2003
2004
2005
2006
,
PBI Minas y Canteras
4222
4524
484.6
517.5
5467
Tasa de crecimiento
4.1%
7.1%
7.1%
6 8%
5 6%
Metales
83.8
897
96 0
100.8
105.8
Tasa de crecimiento
7.0%
7.0%
7.0%
5.0%
5.0%
Oiltgas
Petróleo
49153 6
528401
567767
60708 5
64244.8
Tasa de crecimiento
4.6%
7.5%
7.5%
6.9%
5.8%
MINAS Y CANTERAS
Escenario medio
2007
€2008
2009
2010
2011
2012
PBI Minas y Canteras
573.5
5911
609 9
635.2
657.8
6811
Tasa de crecimiento
4.9%
3.1%
3.2%
4.2%
3.6%
3.6%
Metales
1111
116.7
122.5
128.6
1351
141.8
Tasa de crecimiento
5.0%
5 0%
5.0%
5 0%
5.0%
5.0%
Petróleo
67521.3
697832
721907
75349.1
78212.3
81184.4
Tasa de crecimiento
51%
3 4%
3.5%
4.4%
3 8%
3.8%
Centro de Análisis Aplicado CEMA [email protected]
other transport sectors + comminations. telecom - 98-02 axpected Hot phone to take lines off more of dereg than in double 2000
Cy to
Scenario analysis:
GDP per capita
High
Medium
Low
1998
7978
2012
13736
11225
9144
72%
40%
14%
GDP per capita in other countries
Japan (1997)
33655
Australia (1997)
21274
Italy (1997)
19821
Spain (1997)
13282
Centro de Análisis Aplicado CEMA [email protected]
86 source date: M0% positive bias in (DPertmetion
9
ARGENTINA: PROYECCIONES MACROECONOMICAS PARA EL PERIODO
1999-2012
Roberto Bouzas
Paula Gosis
Hernán Soltz
Juan Tchechenitsky
FLACSO/Argentina
Agosto 1999
Informe de avance
Este trabajo está dividido en dos secciones. En la primera se presentan proyecciones de
producto, volumen de comercio y precios para la economía internacional; de producto,
inflación y tasas de interés para Estados Unidos, Japón y la Unión Europea; y de
producto e importaciones de bienes y servicios reales para Brasil y Chile. Todas las
proyecciones cubren el período 1999-2012. Cuando fue posible (básicamente hasta el
año 2008) estas proyecciones fueron realizadas en base a las fuentes secundarias que se
citan en el texto. En la segunda sección se presentan proyecciones macroeconómicas
desagregadas para la economía argentina para el mismo período, elaboradas en base a
un modelo de consistencia macroeconómica. Estas proyecciones se presentarán para tres
escenarios (base, alto y bajo), aunque en el presente informe de avance sólo se incluye
el escenario base. La principal diferencia entre cada uno de los escenarios es la hipótesis
sobre la tasa de crecimiento de las exportaciones en volumen.
1.
La economía internacional y regional: proyecciones
Esta sección presenta previsiones de evolución de la economía mundial para el período
1999-2012 elaboradas sobre la base de estudios cualitativos y proyecciones cuantitativas
de organismos internacionales y privados. A los efectos expositivos el análisis se ha
desagregado en un componente global y otro regional. En el primero se presentan
proyecciones de crecimiento de la producción mundial, del volumen de comercio de
bienes y servicios reales y del precio de los productos básicos. También se presentan
proyecciones de producto, inflación y tasas de interés de corto plazo para Estados
Unidos, Japón y la Unión Europea. En el segundo apartado se resumen las previsiones
de crecimiento del producto y las importaciones para Brasil y Chile. Como
consecuencia del rápido aumento de las transacciones de bienes y servicios, las
perspectivas de desempeño económico de la región han adquirido para la Argentina una
gran importancia.
a) El contexto global y la economía mundial
Durante los últimos veinticinco años el proceso de integración internacional a través de
flujos de comercio, inversión directa y capital de cartera avanzó a un ritmo sin
precedentes. Sus principales determinantes fueron la aceleración del progreso técnico
(particularmente en las áreas de información y comunicaciones) y las políticas de
apertura y des-regulación que redujeron o eliminaron las barreras de política para la
integración de los mercados. Este proceso tuvo lugar en el marco de una aceptación
generalizada de formas democráticas de gobierno y economías de mercado.
Esta expansión del proceso de integración internacional se acompañó, sin
embargo, de un aumento en las diferencias de ingreso per cápita entre las distintas
regiones del mundo. En efecto, si bien hasta 1996 la cantidad total de pobres se había
mantenido estable en alrededor de un tercio de la población mundial, su proporción
i Se utilizaron las siguientes fuentes: World Bank, Global Commodity Markets 1999; World Bank, Global
Economic Prospects 1999; Project Link, World Outlook 1999; Central Planning Bureau, Scanning the
Future. The Hague. 1992: OECD, The World in 2020. 1997; United Nations, Trade and Development
Report 1998: World Bank. World Development Report 1998. También se utilizaron las proyecciones de
largo plazo realizadas por The Economist Intelligence Unit:
había crecido en Europa oriental, América Latina y Africa.² El proceso de creciente
integración internacional también se acompañó de un progresivo aumento en la
volatilidad de los movimientos internacionales de capital de cartera, reflejada en fuertes
oscilaciones en los flujos netos hacia las economías en desarrollo. Como consecuencia,
la administración de esta volatilidad se transformó en un tema clave de política tanto en
los paises en desarrollo como en los organismos internacionales con responsabilidad en
la materia.
No obstante estas dificultades, la mayoría de las proyecciones consultadas
prevén una administración no traumática de estas tensiones y anticipan la continuidad
de las tendencias a la integración internacional que predominaron durante los últimos
veinticinco años. Esta continuidad se fundamenta tanto en consideraciones tecnológicas
(una continuación del progreso técnico y de la difusión de innovaciones en el campo de
la informática y las comunicaciones) como políticas y regulatorias (una sostenida
reducción de las barreras administrativas y de política).
En particular, en el campo del comercio de bienes se anticipa una profundización
del proceso de apertura. especialmente en las áreas relativamente mas protegidas como
el comercio de productos agrícolas de clima templado. También se anticipa una
profundización de la liberalización en el comercio y la inversión en el área de los
servicios. En esta perspectiva, los acuerdos regionales de comercio son vistos como
building blocks en el proceso de formación de una economía mundial mas integrada,
mas que como obstáculos o dinámicas que conducen hacia la fragmentación. Estos
escenarios también comparten una actitud de confianza respecto a la capacidad para
contener la volatilidad dentro de márgenes tolerables a través de un incremento en la
transparencia, en la diseminación de la información y en la cooperación internacional.
Tanto en el campo de la profundización del comercio como en el del control de
la volatilidad de los mercados, la cooperación a través de las instituciones y regímenes
existentes y del desarrollo de otros nuevos ocupa un lugar central. Si bien se anticipa
una reducción en el rango y diversidad de las políticas nacionales "aceptables". no se
postula una tendencia hacia la uniformidad regulatoria ni hacia la convergencia a un
conjunto particular de instituciones y modos de organización de las relaciones entre
Estado y mercado.
Las proyecciones para el período 1999-2012 indican que el producto mundial
real crecerá a una tasa anual promedio de 3.5%, similar a la de la década de los ochenta
y levemente superior a la del período 1990-98. A este ritmo de crecimiento, para fines
del período el PIB mundial se habrá expandido un 60% respecto del año base (1998).
Adicionalmente, como consecuencia del ritmo de crecimiento relativamente mas lento
previsto para los países de la OCDE en comparación con el resto del mundo, los
primeros verán reducida su participación en el producto mundial (valuado a tipos de
cambio de paridad) del 52% al 47% a lo largo del período.
Según estas previsiones, durante el período 1999-2012 la tasa de convergencia
promedio para el resto del mundo (países no miembros de la OCDE) será mayor que la
registrada en las dos décadas previas. Mientras que se anticipa un crecimiento promedio
de la producción de 2.4% anual en los países de la OCDE (superior al del período 1990-
98 pero por debajo del registrado en la década del ochenta), para el resto del mundo se
2 United Nations, Social and Development Report 1998
espera un desempeño agregado mas dinámico que el registrado en las últimas dos
décadas. Para los países de la OCDE el aumento de la productividad será la principal
fuente de crecimiento en el largo plazo, impulsado por reformas regulatorias para
aumentar la competencia, la aceleración del proceso de globalización y progreso técnico
y una mejora en la disponibilidad de capital humano.
En el resto del mundo, en cambio, las fuentes del crecimiento de largo plazo son
la mejora en la calidad de la fuerza de trabajo, las altas tasas de ahorro y acumulación de
capital, las transferencias intra-sectoriales de recursos y un aumento rápido de la
productividad. El mejor desempeño esperado para el resto del mundo durante el período
1999-2012 se basa en una mayor continuidad del crecimiento a partir del retorno a
condiciones de financiamiento internacional favorables, la recuperación de las tasas de
crecimiento de la IED al ritmo de principios de los noventa y el aumento en la
participación en los flujos de comercio mundial.
En este escenario el crecimiento del volumen de comercio mundial alcanza una
tasa anual promedio del 7%, ligeramente superior a la del periodo 1990-98 y bastante
por encima de la década de los ochenta. Como en los dos períodos anteriores el volumen
de comercio crece a tasas mas rápidas que la producción, incrementando los vínculos y
la interdependencia entre las economias nacionales. La participación del resto del
mundo en el comercio mundial acompaña el comportamiento de su participación en la
producción.
En este contexto de desempeño del comercio mundial se anticipa una
recuperación de los precios de los productos básicos petroleros y no-petroleros, en
contraste con su comportamiento en la década del ochenta y en el período 1990-98.
Sobre la base de una reducción parcial de las barreras y los subsidios en los países de la
OCDE y de la continuidad en el aumento de la producción en el resto del mundo, se
estima que el precio de los productos básicos no-petroleros alcanza a fines del período
un nivel un 40% por encima (en dólares corrientes) del de 1990, recuperando las
pérdidas producidas por la crisis asiática. Por lo que respecta al petróleo, se espera que
el incremento previsto en la demanda mundial para el año 2012 no provoque fuertes
incrementos de precios debido al nivel de reservas probadas, las mejoras tecnológicas y
la consecuente disminución de los costos de extracción. A pesar de que se proyecta un
ritmo de crecimiento anual promedio del 3.6% para el período analizado, para el año
2012 el precio del petróleo aún se encontraría un 7% por debajo (en dólares corrientes)
del nivel alcanzado en 1990.
TABLA 1
PRODUCCION, COMERCIO Y PRECIOS DE LOS PRODUCTOS BASICOS,
1998-2012
(porcentaje, tasa de crecimiento anual promedio)
1980-90
1990-98
1999-04
2005-08
2009-12
1999-2012
PIB real mundial*
3.4
3.0
3.6
3.7
3.1
3.5
OCDE
2.9
2.0
2.5
2.6
2.0
2.4
Resto del mundo
3.9
4.1
4.8
4.8
4.0
4.6
Volumen del comercio**
4.9
6.2
6.6
8.1
6.7
7.0
Precio de los productos básicos***
Petroleros
-4.6
-6.8
5.5
2.7
1.7
3.6
No-petroleros
-2.3
-0.1
3.1
2.8
1.8
2.6
* Tipos de cambio de paridad
Bienes y servicios reales
** En dólares corrientes.
Fuente: Las series históricas corresponden al Fondo Monetario Internacional (World
Economic Outlook) y al Banco Mundial (Global Commodity Markets). Las
proyecciones son de The Economist Intelligence Unit y estimaciones propias.
Dentro del contexto global reviste particular importancia el comportamiento de las
economías de Estados Unidos. Japón y la Unión Europea, las que contribuyen con
alrededor del 85% del producto total de los países de la OCDE y con casi un 50% de
la producción mundial (ambos medidos a tipos de cambio de paridad). Además de su
aporte decisivo a la demanda agregada global, el desempeño de estos tres grupos de
países influye sobre otras variables clave para las economías en desarrollo, como las
tasas de interés que sirven de referencia para el servicio de los pasivos externos.
En el caso de Estados Unidos se prevé la continuación de un proceso de
crecimiento económico cercano al potencial de largo plazo en un contexto de baja
inflación. En la década de los noventa Estados Unidos registró un prolongado período
de expansión económica que hacia fines del período había llevado el nivel de actividad
por encima del producto potencial de largo plazo. Esta fase de acelerado crecimiento fue
provocado por un alto ritmo de expansión de la tasa de progreso tecnológico,
acompañado por una política monetaria prudente y una mejora sustancial en la posición
fiscal. Como resultado, la economía norteamericana redujo sustancialmente la tasa de
desempleo en un contexto de baja inflación y consolidación del presupuesto federal.
Este período de crecimiento, sin embargo, se acompañó de una persistente ampliación
del déficit en cuenta corriente y de un sostenido aumento en el precio de los activos
financieros y reales.
El escenario para el período 1999-2012 tiene implícito una soft landing para la
administración de ambos desequilibrios. En él se anticipa una tasa de crecimiento
promedio del 2.5% anual, impulsada por el aumento de la productividad. Dentro del
período, se espera una ligera tendencia a la desaceleración como consecuencia de un
ritmo mas lento de crecimiento de la fuerza de trabajo. En Estados Unidos el efecto del
envejecimiento relativo de la población sobre el crecimiento es parcialmente
compensado por el proceso de consolidación fiscal de largo plazo que se traduce en
menores tasas de interés y mayor inversión. El escenario para la economía
norteamericana también prevé el mantenimiento de una tasa de inflación cercana a la
del período 1990-98 e inferior a la de la década de los ochenta.
En contraste con Estados Unidos y con la propia experiencia de Japón durante el
período de posguerra, durante la década pasada la economía de ese país tuvo un
desempeño muy desfavorable, especialmente en materia de crecimiento. La
interpretación predominante atribuye este desempeño a los efectos de la abrupta
corrección en los precios de los activos reales y financieros que se produjo entre fines
de la década de los ochenta y principios de los noventa. Los desequilibrios resultantes
en las carteras de las instituciones financieras se agravaron hacia fines de los noventa
por la crisis asiática, región en donde las instituciones financieras japonesas tenían una
elevada exposición.
El escenario previsto para la economía japonesa supone una lenta recuperación
de esta prolongada crisis y una gradual convergencia hacia tasas de crecimiento
características de un capitalismo maduro. Japón es la economía de la OCDE en la cual
se anticipa un mayor efecto negativo de la desaceleración en el crecimiento de la
población y su envejecimiento relativo. En este caso, la mayor contribución al
crecimiento provendrá del aumento en la productividad total de los factores, impulsada
por reformas regulatorias que aumentan la competencia. Así, para el período 1999-2012
se prevé una tasa de crecimiento promedio anual del 1.7%, lo que implica una mejora en
relación al desempeño registrado en la década de los noventa, pero sin retornar a los
niveles alcanzados del decenio anterior. Este escenario supone un proceso progresivo de
internacionalización de la economía y un movimiento gradual hacia formas mas afines a
las occidentales de organización de los mercados (en particular los mercados de trabajo
y capital). La recuperación del crecimiento también descansa en la adopción de políticas
fiscales expansivas que tienen éxito en sacar a la economía japonesa de la "trampa de
liquidez" en que se encuentra, evitándose la deflación y permitiendo una recuperación
del sector financiero.
El escenario previsto para la Unión Europea supone que los objetivos de
disciplina monetaria, coordinación fiscal y mayor exposición a la competencia
internacional se alcanzan parcialmente en el período analizado. También se presume la
consolidación del proceso de integración de un mercado único y su extensión
geográfica, auxiliado por la creación de una moneda única que reduce los costos de
transacción y mejora la eficiencia en la asignación de recursos. Del mismo modo, la
paulatina disminución de los subsidios de la PAC y la progresiva exposición del sector
agrícola al comercio internacional contribuyen a mejorar la eficiencia en la asignación
de recursos, a la par que la flexibilización de las instituciones que regulan el mercado de
trabajo permite disminuir el elevado índice de desempleo que caracterizó el desempeño
económico en los noventa.
En este escenario, durante el período 1999-2012 la Unión Europea logra alcanzar
tasas de crecimiento promedio similares a las de la década del ochenta, pero en un
contexto de menor inflación. Aunque en la década de los noventa se privilegió el control
El cociente Deuda/Exportaciones de bienes y servicios reales y financieros
sufrirá un descenso sostenido desde el pico alcanzado en 1999, dado que el crecimiento
experimentado por las exportaciones es superior al de la deuda externa total. En cambio,
el cociente Servicio de la deuda/Exportaciones de bienes y servicios reales y financieros
alcanza un máximo en el año 2002 y luego desciende levemente. No obstante, al final
del período no habrá logrado recuperar el nivel alcanzado a fines de los noventa. En este
caso, es el peso de las amortizaciones el que impide el mejoramiento del indicador.
h) El escenario alto
Pendiente
c) El escenario bajo
Pendiente
de las presiones inflacionarias a través de políticas monetarias restrictivas, en el
escenario previsto se hace posible el ejercicio de políticas monetarias mas expansivas en
un contexto de consolidación fiscal en los términos establecidos por la EMU,
especialmente en aquellos países con posiciones presupuestarias mas frágiles.
TABLA 2
OCDE: PRODUCCION, PRECIOS Y TASAS DE INTERES, 1998-2012
(porcentaje, tasa de crecimiento anual promedio)
1980-90
1990-98
1999-04
2005-08
2009-12
1999-2012
Estados Unidos
PIB real
2.7
2.5
2.6
2.5
2.3
2.5
Inflación
5.3
2.5
2.8
2.4
2.4
2.6
Tasa de interés*
9.4
5.0
5.4
5.5
5.5
5.5
Japón
PIB real
4.2
1.1
1.4
2.1
1.9
1.7
Inflación
3.1
1.2
0.5
1.0
1.0
0.7
Tasa de interés*
5.7
2.5
1.6
4.0
4.0
2.6
Unión Europea
PIB real
2.5
1.8
2.4
2.6
2.4
2.5
Inflación
6.9
3.1
1.7
2.0
2.0
1.9
Tasa de interés*
6.3
5.7
4.1
4.8
4.8
4.5
* Tasas de interés corto plazo.
Fuente: Las series históricas corresponden al Fondo Monetario Internacional (World
Economic Outlook e International Financial Statistics). Las proyecciones son de The
Economist Intelligence Unit y estimaciones propias.
b) El contexto regional
Durante la última década la importancia del contexto regional, y especialmente de
Brasil, para la economía argentina se incrementó notablemente. El principal canal a
través del cual se hizo sentir dicha influencia fueron los flujos de comercio, cuyo rápido
crecimiento incrementó los lazos de interdependencia. En la subregión integrada por los
países miembros del Mercosur (excluyendo la Argentina), Chile y Bolivia, Brasil
contribuye con un 87% del PIB regional y un 68% de las importaciones totales. Para la
Argentina, en 1998 la subregión así definida fue responsable por un 44% de las
exportaciones totales de bienes, equivalentes a un 4% del PIB. Las exportaciones a
Brasil. en particular, representaron un 2.75% del PIB, una relación aún relativamente
baja pero sustancialmente mayor que el 1% anotado en 1991.
El incremento en la importancia de la subregión, y especialmente de Brasil, para
la economía argentina durante la década de los noventa tuvo lugar en el marco de un
desempeño en materia de crecimiento económico por debajo de la experiencia histórica.
En efecto, durante el período 1990-98 el PIB real de Brasil creció a un ritmo del 2.5%
anual, superior al 1.3% registrado en la década de los ochenta pero muy inferior al 7.2%
promedio de los veinte años previos. No obstante, el proceso de apertura comercial
unilateral y las preferencias negociadas en el ámbito del Mercosur permitieron una
rápida expansión de las importaciones totales y del market share de la Argentina.
Las proyecciones de desempeño económico para la economía brasileña para el
período 1999-2012 prevén una recuperación de ritmos de crecimiento mas elevados que
los registrados durante los últimos dos decenio (3.2% promedio anual), en un contexto
de aumento gradual en el coeficiente de apertura. Los pre-requisitos de este escenario
son que la economía brasileña consiga realizar un ajuste fiscal exitoso que le permita
generar superávit primarios del orden del 3% del PIB (y así mantener la relación deuda
pública/PBI en torno al 50%), además del acceso continuo al flujo de financiamiento
internacional. En este contexto, se prevé una expansión de las importaciones de bienes y
servicios reales a un ritmo promedio del 6% anual, ligeramente inferior a la tasa de
crecimiento del comercio mundial.
Chile también se ha convertido en un socio comercial crecientemente importante
para la Argentina, a cuyo mercado destina cerca de un 7% de las exportaciones totales.
En contraste con Brasil, durante el período 1999-2012 no se espera que la economía
chilena mantenga el desempeño en materia de crecimiento registrado en el período
1990-98 (cercano al 7% anual). La tasa de crecimiento del PIB real proyectada alcanza
un 4.7% en un contexto de aumento del coeficiente de apertura. Desde el punto de vista
fiscal. este escenario supone que la economía chilena tiene éxito en restablecer el
superávit primario a partir del año 2000, en un contexto de mejora en el clima
internacional en materia de precios de los productos básicos y crecimiento en la región
de Asia-Pacífico.
TABLA 3
BRASIL Y CHILE: PRODUCCION, PRECIOS E IMPORTACIONES, 1998-2012
(porcentaje, tasa de crecimiento anual promedio)
1980-90
1990-98
1999-04
2005-08
2009-12
1999-2012
Brasil
PIB real
1.3
2.5
3.3
3.4
3.0
3.2
Tasa de inflación
331.6
326.2
5.8
4.3
3.2
4.5
Importaciones de bs. y serv. reales
-1.8
15.6
4.7
7.0
7.0
6.0
Chile
PIB real
3.0
6.7
4.4
5.0
5.0
4.7
Tasa de inflación
20.3
10.9
4.0
3.0
3.0
3.4
Importaciones de bs. y serv. reales
1.4
11.8
6.5
7.5
7.5
7.0
Fuente: Las series históricas corresponden a CEPAL (Anuario Estadístico de América
Latina). Las proyecciones corresponden a The Economist Intelligence Unit, Proyecto
Link y estimaciones propias.
II.
La economía argentina: proyecciones
Durante la década de los noventa la economía argentina experimentó un proceso de
reforma económica que transformó el patrón de desarrollo desde uno orientado hacia el
mercado interno y con una amplia participación del Estado en la economía a otro
caracterizado por una economía abierta a los flujos comerciales y financieros del
exterior y en el que el mercado recuperó el rol de principal mecanismo de asignación de
recursos. El Plan de Convertibilidad implementado a principios de la década permitió
lograr la estabilidad de precios, contribuyendo a la remonetización de la economía y a la
expansión del crédito. En el marco de un renovado acceso de los países en desarrollo al
financiamiento externo, la estabilidad macroeconómica y las nuevas oportunidades de
negocios que la reforma trajo aparejada resultaron en una rápida expansión del
producto, que creció a una tasa promedio anual de 4.2% y recuperó con creces el
retroceso experimentando en los ochenta (-1.1%).
La rápida expansión del producto fue, no obstante, concomitante con una
ampliación del desequilibrio externo. En efecto, el saldo de la balanza en cuenta
corriente pasó de registrar un superávit de $4.5bn en 1990 a un déficit estimado en
$17bn en 1999. El aumento de las importaciones en un contexto de liberalización
comercial y apreciación real del tipo de cambio y los mayores pagos netos de intereses
fueron los principales factores que explican el crecimiento del desequilibrio externo. El
fluido acceso al mercado internacional de capitales que, con algunas excepciones,
predominó durante la década permitió financiar sin mayores dificultades este
desequilibrio. Su contrapartida fue un rápido crecimiento de los pasivos externos que,
desde 1990, crecieron a una tasa anual promedio del 9%. A pesar de la extensión de la
transformación que se ha operado en la economía argentina, ésta aún continúa basando
su crecimiento en una fuerte dependencia del ahorro externo. A partir de este
diagnóstico se elaboraron tres escenarios (base, alto y bajo) incorporando distintas
hipótesis sobre el desempeño del sector externo.
El instrumento utilizado para realizar el ejercicio es un modelo de consistencia
macroeconómica construido a partir de identidades contables que permite vincular la
oferta y demanda global con sus componentes; con indicadores de precios, ingresos y
mercado de trabajo; y con la cuenta corriente y el endeudamiento externo. El modelo
está especialmente desarrollado para el análisis del sector externo.
En el modelo utilizado el crecimiento de la demanda agregada resulta de
hipótesis de crecimiento independientes para cada uno de sus componentes. El
crecimiento del gasto de consumo y la inversión bruta fija se estiman exógenamente. El
crecimiento de las exportaciones netas. por su parte, resulta de previsiones
independientes para las exportaciones e importaciones de bienes y servicios reales. El
crecimiento de las primeras depende de variables exógenas como el crecimiento del
volumen de comercio mundial y las importaciones de Brasil, mientras que el de las
segundas resulta de computar una elasticidad estimada con respecto a la demanda final.
Las necesidades de financiamiento externo se definen como la suma del saldo en
cuenta corriente y las amortizaciones de deuda. Estas necesidades son cubiertas con
nuevo endeudamiento de mediano y largo plazo, flujos netos de inversión directa y de
cartera y la variación de las reservas internacionales. A partir de hipótesis sobre el
comportamiento de estos dos últimos componentes. se estimaron desembolsos de deuda
de mediano y largo plazo compatibles con el mantenimiento de la relación deuda
externa/PBI.
El saldo en cuenta corriente (en dólares corrientes) se estimó a partir de
previsiones de crecimiento del volumen de exportaciones e importaciones de bienes y
servicios reales, evolución de los precios internacionales e ingresos y egresos por
concepto de servicios factoriales. La estimación de ingresos y egresos por concepto de
servicios factoriales toma en cuenta previsiones sobre tasas de interés, prima de riesgo y
la evolución de la posición neta de inversión. Las amortizaciones de deuda se calculan a
partir del perfil de amortizaciones del stock de deuda existente a fines de 1998,
complementado con supuestos sobre el perfil de amortización de la nueva deuda que se
contrae a lo largo del período.
(I) El escenario base
Para elaborar el escenario base se utilizaron las previsiones presentadas en la sección 1
sobre crecimiento del volumen de comercio mundial, crecimiento de las importaciones
de Brasil. comportamiento de los precios internacionales y tasas de interés.
Paralelamente, se realizaron hipótesis sobre el crecimiento de la IED y la inversión de
cartera agregada. En el contexto de la restricción planteada por el sector externo se
limitó el crecimiento de los desembolsos de capital de mediano y largo plazo al
supuesto de que hacia fines de período (2012) la relación deuda externa/PBI se
mantenía a niveles similares a los de inicios del mismo (1999). En el escenario base no
se prevé una interrupción en los ingresos netos de capitales del exterior, pero se anticipa
un crecimiento de los desembolsos a una tasa que es casi un cuarto de la registrada en el
período 1990/98.
En el escenario base el PBI real de la economía argentina crece a una tasa anual
promedio de 3.4%. que lleva el PIB per-capita en el año 2012 a u$s 16,427 (a valores
corrientes). Dicho crecimiento es liderado por las exportaciones de bienes y servicios
reales (que se expanden a una tasa anual promedio del 6.2%, un punto por debajo de la
tasa promedio del período 1990/98) y la inversión bruta fija (que crece a un ritmo
promedio de 4.3% anual, aproximadamente la mitad del período 1990/98). En el
escenario base tanto el consumo privado como el público crecen por debajo de la tasa de
expansión del producto (3.2% y 1.9% respectivamente), permitiendo un aumento de la
tasa de ahorro nacional, que pasa del 17.4% en 1999 al 21.6% al final del período
(precios corrientes). Las importaciones de bienes y servicios reales también crecen por
encima del ritmo de crecimiento del producto, pero a una tasa mucho menor de la del
período 1990/98 (5.3% contra 18.3% promedio anual en los noventa). Bajo estos
supuestos las exportaciones netas realizan un contribución positiva al crecimiento de la
demanda agregada.
Como resultado de la dinámica proyectada para los componentes de la oferta y la
demanda agregada, hacia finales del período se prevé una caída de aproximadamente
dos puntos porcentuales en la participación del consumo privado y público en el PBI (a
precios constantes) respecto de los niveles alcanzados en 1999. La contrapartida es una
elevación en la participación de la inversión desde 23.3% en 1999 a 28.1% en el año
2012. A precios constantes también aumenta la participación de las exportaciones e
importaciones de bienes y servicios reales en el PBI.
De acuerdo al escenario base, la desaceleración en el crecimiento del producto
en comparación con la última década se acompaña del mantenimiento de elevados
índices de desempleo. Dadas las proyecciones oficiales sobre la evolución de la
población económicamente activa (PEA) y una hipótesis de elasticidad-producto del
empleo, la tasa de desocupación se estabiliza en valores altos hasta mediados de la
década (cercanos al 16%) para reducirse hacia fines del período a un mínimo de 11.3%.
Dados los supuestos sobre inflación y asumiendo que los costos laborales horarios
crecen a la misma tasa que el empleo, se prevé un aumento de 0.4% anual en el salario
real. Los costos laborales unitarios, por su parte, caen ligeramente (-0.4% anual) como
resultado de un crecimiento previsto de 2.5% en la productividad (una tasa
aproximadamente la mitad de la registrada en los noventa).
El crecimiento real de las exportaciones de bienes se estimó con base en el
supuesto de que la economía argentina mantiene su participación en los flujos de
comercio mundial y en las importaciones brasileñas. El resultado es un crecimiento
promedio anual de los volúmenes exportados de 6.3% entre 1999 y 2012,
aproximadamente la mitad de la tasa registrada en el período 1990/98.⁴ El crecimiento
del volúmen de importaciones de bienes (5.7%) se estimó en base a una elasticidad
respecto de la demanda doméstica de 1.8. inferior a los valores usualmente estimados
para la década de los noventa pero considerada mas próxima a valores de largo plazo de
dicha elasticidad.³
Los supuestos de comportamiento del volumen de exportaciones e importaciones
de bienes y servicios reales y las previsiones de precios internacionales dan como
resultado una mejora en la balanza comercial, que registra saldos positivos a partir del
año 2006.
La balanza de servicios financieros se estimó a partir de las cuentas Utilidades y
dividendos e Intereses. Para la primera se hicieron supuestos sobre la remisión y cobro
de utilidades y dividendos⁶. El saldo de la cuenta de Intereses, por su parte, resultó de
estimaciones independientes de los intereses pagados y ganados. El monto de intereses
pagados se estimó con base en la tasa de interés internacional, la prima de riesgo y el
stock de deuda externa. Los intereses ganados también se estimaron a partir de las
previsiones sobre la tasa de interés internacional y la evolución de la inversión
financiera argentina en el exterior.⁷
El comportamiento previsto de la balanza comercial permite contrarrestar
ligeramente el déficit creciente de la cuenta de servicios financieros, llevando el déficit
3
La elasticidad-producto del empleo para el período 1999/2003 es 0.5 y luego se incrementa
gradualmente hasta 0.7 a fines del período.
El crecimiento del volumen de exportaciones de servicios reales se estimó con base en una elasticidad
respecto de las exportaciones de bienes de 0.7 para el período 1999/2008 (similar a la del período
1990/98) y 0.8 a partir del año 2009 y hasta el fin del período.
5 Las importaciones de servicios reales también se estimaron con base en el comportamiento previsto de
las importaciones físicas de bienes (elasticidad respecto de las importaciones totales de 0.7)
(, La remisión de utilidades y dividendos de empresas extranjeras que operan en la Argentina crece a la
misma tasa que la inversión extranjera directa (9% promedio anual). Por su parte, los ingresos por
concepto de utilidades y dividendos de las empresas argentinas crecerá a una tasa promedio anual del
11%, levemente por encima de la tasa proyectada para la inversión directa de estas empresas en el
extranjero.
Se estima que crece a una tasa promedio anual del 5% (la mitad de la registrada entre 1992 y 1998.
en cuenta corriente hacia fines del período (4.4% del PIB) a niveles similares a los
registrados en 1998 (4.3%).
El financiamiento del déficit en cuenta corriente proviene de la entrada de
capitales de mediano y largo plazo y de los flujos de inversión extranjera directa y de
cartera. La entrada de capitales de mediano y largo plazo es superior al monto estimado
de amortizaciones para el período, pero su expansión está limitada por la restricción de
que al final del período la relación Deuda externa/PBI se mantenga aproximadamente al
mismo nivel que en 1999 (45.3% en 1999 en comparación con 46.4% en el año 2012).
Las amortizaciones previstas de deuda externa se formularon a partir de las
estimaciones oficiales del stock de deuda y su perfil de vencimientos a fines de 1998 e
hipótesis sobre la amortización de la nueva deuda contraída durante el período de la
proyección.⁸
Los flujos de inversión directa fueron estimados con base en un supuesto sobre
crecimiento de los flujos de IED globales y de una participación constante en los
mismos de la inversión directa de empresas extranjeras en la Argentina y de empresas
argentinas en el exterior. La estimación del comportamiento de la IED mundial se
realizó con base en la relación histórica entre su incremento y el del comercio mundial.
El resultado es que tanto la IED como la inversión directa de empresas argentinas en el
exterior crecen a una tasa promedio anual de 9%.
Se prevé que la inversión de cartera crezca más aceleradamente que la inversión
directa. a una tasa promedio anual del 12% para el período 2000/2012. Este supuesto es
compatible con el argumento de creciente globalización financiera, donde los flujos de
inversión financiera muestran un comportamiento más dinámico que los de inversión
directa.
Las reservas internacionales, finalmente, crecen a la misma tasa que el producto,
incrementándose en un 56% en el período 1999/2012 (u$s38.5bn al final del período).
La evolución de la deuda externa está determinada por el comportamiento de los
desembolsos de nuevos fondos y las amortizaciones del período. Bajo el supuesto de
que el crecimiento de los desembolsos está limitado por la relación deuda/PBI, el
incremento de éstos se desacelera con respecto a la década de los noventa. En efecto, en
el período 1999/2012 su tasa de crecimiento anual promedio es de aproximadamente un
cuarto de la del período 1990/98 (10% y 38%, respectivamente). Las amortizaciones
también crecen más lentamente que en los noventa (15% promedio anual en el período
1999/2012 contra 25% en 1990/1998). Como resultado, la deuda externa total crece a
una tasa promedio anual del 6% (en el período 1990/1998 lo hizo a una tasa del 9%) y
se eleva desde un monto de $149.4bn en 1999 a $322.4bn en el año 2012.
S A partir del año 2000 el 70% de la deuda privada de mediano y largo plazo que se coloca
en bonos y en bancos se amortiza al año siguiente, en tanto que el 30% restante se amortiza
al cabo de cinco años. La totalidad de la deuda del gobierno colocada en el período entre
organismos bilaterales se amortiza en diez años. El 30% de la deuda con organismos
multilaterales se amortiza a cinco años y el 70% restante a diez años (Este supuesto se basa
en la composición actual de la deuda con organismos multilaterales: 30% con el FMI con
un plazo promedio de cinco años y 70% con otros organismos con plazos mayores). El
60% de los desembolsos de deuda pública (provenientes de las colocaciones de bonos y de
los préstamos bancarios) se amortiza a cinco años y el 40% restante a diez años.
Tabla 4
Proyecciones para la economía argentina: escenario base
1997
1998 1999-2004 2005-2008 2009-2012 1999-2012
PIB real (%, cambio porcentual anual)
8,6
4,2
2,8
3,9
3,8
3,4
Consumo privado
8,4
4,1
2,5
3,8
3,8
3,2
Consumo público
3,2
2,4
1,7
2,0
2,0
1,9
Inversión bruta interna fija
26,5
7,3
3,3
5,2
5,0
4,3
Exportaciones de bienes y servicios reales
12,1
7,0
5,0
7,4
6,6
6,2
Importaciones de bienes y servicios reales
27,6
8,2
3,5
6,8
6,7
5,3
Demanda doméstica
11,5
4,7
2,6
4,0
4,0
3,4
Consumo total
7,8
3,9
2,4
3,6
3,6
3,1
PIB real (millones de pesos de 1986)
13884
14472
17101
19963
23135
Consumo privado
10211
10627
12331
14315
16618
Consumo público
1314
1346
1486
1608
1741
Inversión bruta interna fija
3350
3595
4361
5352
6505
Exportaciones de bienes y servicios reales
2016
2157
2898
3861
4989
Importaciones de bienes y servicios reales
3007
3253
4003
5201
6746
Demanda doméstica
14875
15567
18206
21303
24892
Consumo total
11525
11973
13817
15923
18359
PIB per cápita (u$s)
9070
9434
11114
13494
16427
4,0
nominal
Composición del PIB real (%, fin de período)
Consumo privado
73,5
73,4
72,1
71,7
71,8
Consumo público
9,5
9,3
8,7
8,1
7,5
Inversión bruta interna fija
24,1
24,8
25,5
26,8
28,1
Exportaciones de bienes y servicios reales
14,5
14,9
16,9
19,3
21,6
Importaciones de bienes y servicios reales
21,7
22,5
23,4
26,1
29,2
Ahorro e inversión (precios corrientes, fin de período)
Tasa de ahorro nacional (% del PIB)
17,8
18,2
19,6
20,8
21,6
Tasa de ahorro externo (% del PIB)
-3,7
-4,3
-5,1
-4,6
-4,4
Precios, ingresos y mercado de trabajo
PEA (millones, fin de período)
13,3
13,6
15,5
16,6
17,8
Tasa de desempleo (%, fin de período)
13,7
12,9
16,1
14,4
11,3
Salario nominal promedio (%, variación anual)
0,0
0,0
1,49
2,37
inemployment
2,63
2,1
Precios al consumidor (%, variación anual)
0,5
0,9
1,3
2,1
2,1
1,8
Salario real promedio (%, variación anual)
-0,5
-0,9
0,2
0,3
0,5
0,3
Costos laborales unitarios (%, variación anual)
real wage
-4,8
-4,7
-0,8
-0,1
0,1
-0,4
Sector externo (millones u$s, fin del período)
Exportaciones de bienes
26431
26434
41571
62515
90033
9,1
Importaciones de bienes
-28554
-29444
-42560
-60908
-86391
8,0
Balanza de bienes
-2123
-3010
-989
1607
3641
trade balance
Balanza de servicios reales
-4178
-4281
-5645
-7430
-9646
6,0
Balanza de servicios factoriales
-6171
-7614
-15670
-19841
-25534
9,0
Balanza en cuenta corriente
-12036
-14517
-21832
-25092
-30846
5,5
(como % del PIB)
-3,7
-4,3
-5,1
-4,6
-4,4
coment acct
Inversión directa neta
4924
3740
7036
9216
12686
9,1
Reservas internacionales
22440
24876
28480
33226
38487
3,2
Deuda externa (fin del período)
Deuda externa total (millones u$s)
124282
139323
215415
269491
322400
6,2
Total del servicio de la deuda (millones u$s)
18602
18570
55916
77565
101849
12,9
Deuda total/Exportaciones de bienes y servicios (%)
341,74
377,44
379,1
328,9
279,1
Deuda total/PIB (%)
38,41
40,88
49,9
49,2
46,4
Debt-service ratio (%)
51,2
50,3
98,4
94,7
88,2
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FUNDACION DE INVESTIGACIONES ECONOMICAS LATINOAMERICANAS
(FIEL)
FMF FIEL MACROECONOMIC FORECASTS
ARGENTINA 1999/2001
SECOND ISSUE
DECEMBER 1998
FMF FIEL MACROECONOMIC FORECASTS
ARGENTINA 1999/2001
SECOND ISSUE - DECEMBER 1998
TABLE OF CONTENTS
Recovery of confidence, low growth
1
Assumptions of the forecasts
1
Summary of the forecasts
4
TABLES
FIEL ACKNOWLEDGES THE US FORECASTS KINDLY PROVIDED BY DRI/McGRAW-HILL
IMPORTANT NOTICE: ALL RIGHTS RESERVED. THE DISTRIBUTION OF THIS DOCUMENT IS INTENDED FOR
THE USE OF THE ORIGINAL PURCHASER ONLY. EXCEPTED AS PROVIDED UNDER THE AGREEMENT FOR DELIVERY
OF THE SERVICE, NO PART OF THIS WORK MAY BE REPRODUCED OR USED IN ANY FORM OR BY ANY MEANS
WITHOUT WRITTEN PERMISSION FROM THE PUBLISHER. FIEL ASSUMES NO RESPONSABILITY FOR ANY ERROR
THAT MAY APPEAR IN THIS DOCUMENT.
FMF FIEL MACROECONOMIC FORECASTS
ARGENTINA 1999/2001
SECOND ISSUE
DECEMBER 1998
Recovery of confidence, low growth
implications of a stressing first-half with
recovery in the second-half of 1999. We
Since October the restoration of
add two other scenarios that exhibit, as
investors' confidence has supported the
for 1999, a 2%-band around zero
recovery of capital markets: emerging
growth, which is our baseline forecast
markets sovereign spreads over US
for the most likely development.
Treasuries fell dramatically, stock prices
increased sharply in the US, Latin
This result has strong implications for
America and Asia.
fiscal policy. Recently the Government
has widened his target for the 1999
The help came from several factors, as a
budget deficit to some US$ 3 billion and
75-basis points cut of federal funds by
a current account deficit of 4.5 percent
the FED; the further reduction of
of GDP. The revision recognized the
interest rates in other countries; the
slower regional growth and the likely
refunding of the IMF by the US
recession in Brazil, with an expected
Congress; the commitment of the G-7 to
official growth of Argentina GDP at
support Brazil and the approval of a
2.5%. But this figure is higher than our
large stabilization package for this
optimistic scenario (1.8%). The loss in
country; the passage of bank reform
revenues, if no major drastic reform is
legislation in Japan and expectations of
introduced in public expenditure - which
supplementary fiscal packages to help
we deem unlikely - will require
markets in Asia; the appreciation of the
additional financing and no major tax
Japanese yen, reducing the risks of a
cuts in labor costs.
China devaluation.
Assumptions of the forecasts
The Argentine economy exhibited a
good performance until the third quarter,
Baseline forecast This scenario
with GDP growing at a rate of 5.8%
assumes that the adjustment processes of
(first three quarters of the year), but data
the world economy are completed by the
in manufacturing show a significant fall
second half of 1999, with a US economy
in the fourth quarter, meaning an annual
experiencing a moderate growth lower
growth rate of 2% for industry, and
than trend but still a significant one. The
probably lower. The trade data, also,
rate of FED funds would be further
indicate the beginning of a negative
reduced in 1999, as price and wage
cycle in activity. Accordingly, we have
increases would be mild.
revised our estimate of growth for 1998
to 4.4%.
Asia would show mixed results. Japan is
expected to exhibit a moderate recession
There are conflicting signals from the
but with hopes to have advanced by year
international economy as for the
2000 a large portion in its banking
continuation of the recovery of the
reform. China would adjust its economy
capital markets. We think that there is
without resorting to a devaluation. Other
no firm evidence to support an earlier
Asian countries will have more stable
recovery of the domestic activity. In our
economies, permitting some moderate
baseline scenario, we analyze the
growth of credit and domestic demand.
FIEL - CÓRDOBA 637 (1054) BUENOS AIRES ARGENTINA TEL. 314-1990 FAX 314-8648
SYNOPSIS OF THE FORECASTS
BASELINE
HIGH
LOW
Probability
50%
20%
30%
Growth of GDP
1999
0.0%
1.8%
-2.1%
(At Market Prices)
2000
5.2%
4.6%
4.1%
2001
5.5%
5.1%
5.4%
Growth of Deposits
1999
5.4%
9.7%
-5.2%
(End of Year)
2000
13.2%
12.8%
9.4%
2001
12.6%
11.7%
12.6%
Current Account (US$ Bill. and
1999
-13.5
4.0%
-14.9
4.3%
-11.5
3.6%
as % of GDP)
2000
-15.5
4.3%
-16.3
4.4%
-13.7
4.0%
2001
-19.5
4.9%
-20.3
5.0%
-16.1
4.4%
Unemployment
1999
14.3%
13.9%
15.1%
(Unemployment Rate)
2000
13.7%
13.3%
14.9%
2001
12.9%
13.1%
14.2%
Inflation
1999
-1.3%
-0.3%
-2.8%
(GDP Deflator Chg)
2000
3.4%
3.5%
1.9%
2001
3.4%
3.2%
2.5%
Productivity growth
1999
-0.6%
1.4%
-0.6%
(Output per Hour)
2000
1.9%
1.5%
1.9%
2001
2.6%
1.8%
2.5%
Public Bonds Yield
1999
12.2%
10.7%
12.3%
(Avge Life 2 Year)
2000
10.2%
10.1%
10.5%
2001
9.6%
9.5%
9.7%
LIBOR 180
1999
4.5%
4.8%
4.0%
2000
4.4%
4.8%
4.2%
2001
4.7%
5.2%
4.7%
Terms of Trade (Chg)
1999
-0.5%
1.1%
-2.4%
2000
6.5%
5.9%
3.3%
2001
1.5%
1.0%
3.9%
Exchange Rate (Chg)
1999
1.9%
2.1%
1.5%
($/SDR)
2000
1.8%
2.0%
1.5%
2001
1.1%
1.5%
2.0%
FIEL - December 1998
FMF FIEL MACROECONOMIC FORECASTS
The US Dollar is expected to depreciate
struck by a weak demand, and volatility
vis-a-vis the euro, but to appreciate vis-
of capital markets is maintained, as
a-vis the yen. As the world GDP will
investors' confidence does not recover
accelerate only marginally, commodity
until year 2000. The FED additionally
prices will remain more or less at their
reduces the funds rate and the IMF and
1998 averages.
the G-7 support the world financial
stability through emergency funds and a
Hard credit will constrain the growth of
commitment to act in coordination. A
Latin America economies. Brazil will
new IMF agreement would be signed
enter in a deflationary situation, with the
admitting a substantial drop in fiscal
GDP adjusting to meet the fiscal target.
revenues and providing more scope for
Some delays in the Brazilian program
external emergency support. World
will maintain some volatility in the
growth since year 2000 is higher but
financial markets.
weaker than in the baseline scenario.
This is a complex scenario for Argentina
Probabilities The most difficult item to
as there will be no degrees of freedom to
predict is, as usual, private investment
direct the macroeconomic policies
expenditure. Linked to credit
towards social or political endeavors.
availability, it depends also on many
Policy mistakes are more likely under
factors and volatile expectations not
stress; we assume that no major one is
easily foreseeable. The three scenarios
committed in the stressed first half.
assume that, even with hard credit
constraints, private expectations on the
As of the year 2000 economies are
macroeconomic regime are stable and
assumed to return to growth near their
positive. In other words, no "regime
long-run path. This will push up
switching" is expected in the transition
commodity prices.
phase from the Menem administration to
the new one, which coincides with the
High forecast In this scenario recovery
transition in the international markets
of the world economy is as in the
from a highly volatile situation to a
baseline, but with more favorable
more stable and foreseeable context. If
numbers. Sovereign risks are lower
any change in economic rules appears as
during the transition period. Commodity
realistic for investors, either because of
prices react positively in 1999. The
political unstability or policy mistakes,
major difference with the baseline is that
then a more sharply decline of private
more liquidity prevails through 1999.
investment than those contained in the
present scenarios should be expected.
Low forecast This scenario presupposes
that the crisis is deeper than in the
Our probabilities are 50% for the
baseline scenario, yet industrial
baseline, 30% for the lower prospects
countries are not expected to enter into
and 20% for the more optimistic
recession. The US economy decelerates
scenario.
more sharply (1% in 1999) and Latin
America economies are hit by a harder
credit constraint, with the private sector
being mostly affected through the loss
of credit lines. Sovereign spreads are
only marginally higher but stock prices
in emerging economies are lower than in
the baseline. Commodity prices are
FIEL - CÓRDOBA 637 (1054) BUENOS AIRES - ARGENTINA - TEL 314-1990 - FAX 314-8648
PAGE 3
FMF FIEL MACROECONOMIC FORECASTS
Summary of the forecasts
High forecast In this case, GDP grows
a 4% as a three-year average, with 1.8%
We consider briefly the main indicators
in 1999. Liquidity in the financial sector
(see synopsis and statistical tables).
increases at a rate that is almost twice
the baseline rate. Higher profitability of
Baseline GDP growth would reach an
exports through higher prices provide
average of 3.6% over the three-year
incentives to export growth - but the
horizon, with 0 percent in 1999. Most
constraint of the size of the markets
affected in 1999 would be sectors
remains in 1999 more or less unchanged
producing tradables goods, as the
as from the base. So the engine of
manufacturing industry (-2.2%) and
growth in 1999 is investment and
agriculture (-1%). This reflects the
consumption expenditure on durable
strong decline of the rate of exports'
goods. The current account deficit
expansion, from a 10 percent in 1998 to
reaches 4.3% in 1999 and 5% in 2001.
zero in 1999.
Low forecast In 1999, a sharp decline
Investment expenditure is positive but
of liquidity is reflected in a decline of
low. Banks would allocate the scarce
credit to the private sector (-7%). Lower
new credit lines to the construction
prices and reduced markets in Latin
sector and to the enhancement of
America are reflected in a fall of exports
capacity and away from consumption,
(-3.2%), with a three-year average of
already hit by a sharp increase of the
only 4%. GDP declines 2.1% in 1999
unemployment rate (higher than 14% in
and only reaches a 2.5% as average.
1999).
Investment recedes by 3 ½ %. Tax cuts
are postponed until 2001. The
Real wages are expected to decline by
unemployment rate reaches 15% in 1999
3% in 1999 with some negative number
and declines only to 14% in 2001.
also in 2000. Some increase could be
Terms of trade fall by another 2.4% in
expected as from 2001.
1999 and recover only moderately in
year 2000 and 2001. The current
The domestic saving rate is expected to
account deficit starts at 3.6% in 1999
stagnate at an average of 15.9%. The
and reaches 4.4% in 2001, as a
external saving rate (the current account
percentage of GDP.
deficit as a % of GDP) would reach a
4% in 1999 and a 4.4% as an average of
the three-year period. In 1999, deposits
in the financial system would increase
only 5% at year-end. The Central Bank
would eam some additional US$ 1
billion reserves.
As from 2000 the economy would return
to a growth rate higher than 5% per
year. Like in 1997, credit would grow at
double-digit figures. The engine of
growth will be the investment
expenditure and exports (in 2001).
Terms of trade are expected to recover
in year 2000 the fall of 1998 and 1999.
FIEL - CÓRDOBA 637 4 (1054) BUENOS AIRES ARGENTINA - TEL. 314-1990 FAX 314-8648
PAGE 4
FMF FIEL MACROECONOMIC FORECASTS
12
10
8
6
Chg (%)
4
2
0
-2
-4
-6
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
GDP at Factor Cost
Manufacturing
A zero-growth for 1999 is expected for the Argentine economy, with a negative first half
balanced by a positive second one. This reflects the stress of the financial markets which
is expected to materialize, in particular, if Brazil' interest rates and fiscal deficit do not
converge swiftly to sustainable levels. A mild decline of tradable sectors (manufacturing,
agriculture) and a positive development in non-tradable ones would balance to zero at
the aggregate level, if, as assumed, credit increases at the same pace as in 1996 (2/3%).
In the year 2000 growth is expected to resume.
Prices
6
5
4
3
Chg (%)
2
1
0
-1
-2
-3
1994
1995
1996
1997
1998
1999
2000
2001
GDP Deflator
USA Producer Prices
In 1999 the negative trend of prices will be reinforced. As some increase is expected in
the US producer prices, the purchasing-parity of Argentina would exhibit an increase -
a higher real exchange rate. Since the year 2000 domestic prices are expected to run at
an annual rate of 3 ½ %, higher than the US rate of inflation at the producer level.
FIEL - CÓRDOBA 637 4 o (1054) BUENOS AIRES - ARGENTINA - TEL. 314-1990 - FAX 314-8648
PAGE 5
FMF FIEL MACROECONOMIC FORECASTS
Exchge Rate ($/SDR, % Chg)
8
6
4
2
%
0
-2
-4
-6
1993
1994
1995
1996
1997
1998
1999
2000
2001
The Argentine Peso is pegged to the US Dollar. From 1996 the revaluation of the dollar
has imposed an automatic revaluation of the Peso against major currencies. As from
1999, the euro will tend to appreciate vis-a-vis the dollar, but it is expected that a weak
Japanese yen will prevail. The net effect would be a moderate depreciation of the US
Dollar as against the composite currency denominated in SDR.
Sovereign risk
8
7
6
p.a.
*
5
4
3
1995
1996
1997
1998
1999
2000
2001
As a consequence of the international financial crisis, by mid-1998 the interest rate faced
by emerging markets increased sharply. The sovereign risk peaked in September and
October, but after the recovery of investors' confidence in October-November, yields on
external debt returned to a 12-13% range. Even as "fundamentals" are more solid in
Argentina that in Brazil, it is expected that increased risk aversion from investors, lack of
liquidity in the emerging countries and economic turmoil in Brazil will translate into a
high level of argentine risk in 1999, declining thereafter as financial conditions return to
a more normal situation. Cuts of the rate by the FED, the expected success of the
Brazilian stabilization program and lack of policy mistakes in domestic policies are
expected to contribute to the declining argentine risk by the end of 1999.
FIEL - CÓRDOBA 637 (1054) BUENOS AIRES - ARGENTINA - TEL. 314-1990 - FAX 314-8648
PAGE 6
FMF FIEL MACROECONOMIC FORECASTS
External Debt
5
4.5
4
3.5
3
2.5
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
As a multiple of GDP
As a multiple of Exports
Insufficient adjustment of public consumption and zero growth of the economy - with a strong loss of
revenues - will mean a fiscal deficit larger than the US$ 3 billion recently announced by the
Government. The Government is expected to phase the tax cuts and resort increasingly to external
sources of financing. The relation of external debt to GDP and exports will continue its upward trend
and then is expected to stabilize.
Saving Rate
22
21
20
19
18
% of GDP
17
16
15
14
13
12
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Domestic
External
The domestic saving rate will exhibit a moderate upwards trend; but the external saving rate, i.e. the
current deficit of the balance of payments as a percentage of GDP, will increase from the 1998 level (3
½ %) to a 4% in 1999, well below the number expected by the Government. It will be sustainable if
argentine macroeconomic policies are perceived as fundamentally correct by investors and the
international scenario behaves as assumed in the baseline - that is no strongly adverse shocks coming
from Asia and Latin America, and the US economy decelerating gradually, with no major policy errors
from the FED.
FIEL - CÓRDOBA 637 4 (1054) BUENOS AIRES - ARGENTINA - TEL. 314-1990 - FAX 314-8648
PAGE 7
DECEMBER 1998 SECOND ISSUE
BASELINE FORECAST
TABLES
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 1 ARGENTINA Gross Domestic Product, Global Supply and Demand
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates At Constant Prices, %)
1.1 GDP at market prices
4.8
8.6
4.4
0.0
5.2
5.5
3.6
1.2 Imports of Goods and NFS
18.2
27.6
11.8
2.0
12.6
15.8
10.2
1.3 Consumption and Change in Inventories
6.1
7.8
4.2
-0.4
5.5
5.9
3.7
1.4 Gross Domestic Fixed Investment
8.8
26.5
8.1
3.4
9.9
11.5
8.3
1.5 Exports of Goods and NFS
6.7
12.1
10.3
-0.3
7.3
10.3
5.8
1.6 Global Supply and Demand
6.7
11.6
5.7
0.4
6.6
7.6
4.9
(Billions of US dollars)
1.7 GDP at market prices
300.3
327.1
338.0
333.5
362.9
396.0
1.8 Imports of Goods and NFS
28.3
35.4
37.4
38.5
44.1
51.8
1.9 Consumption and Change in Inventories
252.1
272.0
281.7
277.0
299.9
325.6
1.10 Gross Domestic Fixed Investment
49.1
60.8
64.4
65.8
73.1
83.7
1.11 Exports of Goods and NFS
27.4
29.8
29.2
29.2
34.0
38.5
1.12 Global Supply and Demand
328.6
362.6
375.3
372.0
407.0
447.8
Source: Ministry of Economy and Public Works and FIEL estimates and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 2 ARGENTINA Gross Domestic Product at Factor Cost by Sectoral Origin
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates at Constant Prices)
2.1 GDP at Factor Cost
4.6
8.1
4.2
0.1
5.2
5.4
3.6
2.2 Agriculture
3.0
3.3
4.8
-0.9
3.2
3.9
2.1
2.3 Mining
9.7
8.0
2.2
3.2
5.7
8.6
5.8
2.4 Manufacturing
5.3
9.2
2.0
-2.2
5.5
5.9
3.0
2.5 Construction
1.3
23.5
7.5
3.7
8.5
12.7
8.3
2.6 Electricity, Gas and Water
5.0
7.4
5.7
4.2
5.6
6.1
5.3
2.7 Commerce, Restaurants and Hotels
6.4
10.4
4.3
-1.0
5.8
6.2
3.7
2.8 Transport, Storage, Communications
7.0
6.8
5.4
0.7
5.9
6.6
4.4
2.9 Banking and Housing
7.2
7.6
5.1
3.3
3.9
3.8
3.7
2.10 Government and Other Services
0.1
2.9
5.0
-0.5
4.6
2.2
2.1
(Percentages of GDP)
2.11 GDP at Factor Cost
100
100
100
100
100
100
100
2.12 Agriculture
7.7
7.4
7.4
7.4
7.2
7.1
7.2
2.13 Mining
3.0
3.0
3.0
3.0
3.1
3.1
3.1
2.14 Manufacturing
25.0
25.3
24.7
24.1
24.2
24.3
24.2
2.15 Construction
5.6
6.4
6.6
6.9
7.1
7.6
7.2
2.16 Electricity, Gas and Water
2.4
2.3
2.4
2.5
2.5
2.5
2.5
2.17 Commerce, Restaurants and Hotels
16.2
16.5
16.5
16.3
16.4
16.6
16.5
2.18 Transport, Storage, Communications
5.5
5.4
5.5
5.5
5.5
5.6
5.5
2.19 Banking and Housing
16.8
16.7
16.8
17.4
17.2
16.9
17.1
2.20 Government and Other Services
17.8
16.9
17.0
16.9
16.8
16.3
16.7
Source: Ministry of Economy and Public Works and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 3 ARGENTINA Manufacturing Industry - GDP by Subsector
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates at Constant Prices)
3.1 GDP Manufacturing Industry
5.3
9.2
2.0
-2.2
5.5
5.9
3.0
3.2 Food Products, Beverages and Tobacco
1.9
2.0
2.7
0.5
3.4
3.6
2.5
3.3 Textiles, Clothing and Leather Products
8.5
1.1
-3.3
-4.9
4.7
2.4
0.7
3.4 Wood Products and Furniture
12.5
4.5
4.5
-0.8
3.9
4.7
2.6
3.5 Paper and Printing
7.3
4.5
2.1
-0.1
7.2
7.3
4.8
3.6 Chemicals, Petroleum, Rubber, Plastic
2.7
3.3
2.1
1.4
6.6
2.2
3.4
3.7 Nonmetallic Minerals
6.3
17.0
5.9
-0.7
7.9
11.7
6.3
3.8 Iron, Steel and Nonferrous Metal
12.5
6.9
3.1
-4.1
7.4
9.7
4.3
3.9 Machinery, Transport and Equipment
8.0
29.7
2.2
-7.7
5.5
11.1
2.9
3.10 Other Manufacturing Industries
5.3
9.0
3.1
-0.8
5.3
4.4
3.0
(Percentages of GDP)
3.11 GDP Manufacturing Industry
25.0
25.3
24.7
24.1
24.2
24.3
24.2
3.12 Food Products, Beverages and Tobacco
6.1
5.7
5.7
5.7
5.6
5.5
5.6
3.13 Textiles, Clothing and Leather Products
2.7
2.5
2.3
2.2
2.2
2.1
2.2
3.14 Wood Products and Furniture
0.6
0.5
0.5
0.5
0.5
0.5
0.5
3.15 Paper and Printing
1.6
1.5
1.5
1.5
1.5
1.5
1.5
3.16 Chemicals, Petroleum, Rubber, Plastic
6.3
6.0
5.9
5.9
6.0
5.8
5.9
3.17 Nonmetallic Minerals
1.0
1.0
1.1
1.1
1.1
1.1
1.1
3.18 Iron, Steel and Nonferrous Metal
1.3
1.3
1.3
1.2
1.3
1.3
1.3
3.19 Machinery, Transport and Equipment
5.3
6.4
6.2
5.8
5.8
6.1
5.9
3.20 Other Manufacturing Industries
0.2
0.2
0.2
0.2
0.2
0.2
0.2
Source FIEL estimates and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 4 ARGENTINA Balance of Payments and External Debt
1996
1997
1998
1999
2000
2001
(Millions of US Dollars)
4.1 Current Account (4.2+4.9+4.13)
-3787
-9429
-11805
-13496
-15546
-19457
4.2 Resource Balance (4.3-4.6)
-873
-5586
-8219
-9269
-10127
-13251
4.3
Exports of Goods and NFS
27429
29829
29170
29187
33957
38532
4.4
Merchandise Exports (FOB)
23811
26025
25330
25101
29687
34060
4.5
Non Factor Services
3618
3804
3840
4087
4270
4472
4.6
Imports of Goods and NFS
28302
35415
37389
38457
44083
51783
4.7
Merchandise Imports (CIF)
23761
30355
32398
33395
38744
46109
4.8
Non Factor Services
4541
5060
4991
5061
5339
5674
4.9 Net Factor Service Income
-3248
-4190
-4271
-5052
-6068
-6790
4.10
Interest Perceived on External Assets
4587
5384
5447
4730
4801
5460
4.11
Interest Accrued on External Debt
-5913
-7139
-7127
-7049
-7804
-8905
4.12
Royalties and Dividends
-1922
-2435
-2591
-2733
-3065
-3345
4.13 Current Transfers
334
347
685
826
648
585
4.14 Balance on Capital Account
7569
12491
13870
14501
18102
22140
4.15
Public
9580
6530
10580
12058
10458
12736
4.16
Private
-2011
5961
3290
2443
7643
9404
4.17 Net International Reserves (change)
3782
3062
2066
1006
2555
2683
4.18 Liquid External Assets of Central Bank
19745
22807
24873
25878
28434
31117
(end of year)
4.19 External Debt
99468
110171
122903
137360
154682
175179
4.20
Public
73612
74775
84155
96213
107672
121608
4.22
Private
25856
35396
38748
41146
47010
53571
4.23 External Debt/Total Exports
3.63
3.69
4.21
4.71
4.56
4.55
Average
(Annual Growth Rates, %)
1999/2001
4.24 Exports of Goods and NFS
13.3
8.8
-2.2
0.1
16.3
13.5
10.0
4.25
Merchandise Exports (FOB)
13.6
9.3
-2.7
-0.9
18.3
14.7
10.7
4.26
Non Factor Services
11.7
5.2
0.9
6.4
4.5
4.7
5.2
4.27 Imports of Goods and NFS
17.0
25.1
5.6
2.9
14.6
17.5
11.7
4.28
Merchandise Imports (CIF)
18.1
27.8
6.7
3.1
16.0
19.0
12.7
4.29
Non Factor Services
11.7
11.4
-1.4
1.4
5.5
6.3
4.4
4.30 Net Factor Service Income
1.0
29.0
1.9
18.3
20.1
11.9
16.8
Source: Ministry of Economy and Public Works, adjusted as from 1993, and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 5 ARGENTINA Population, Employment and Capacity Utilization
1996
1997
1998
1999
2000
2001
(Thousands, % rates and index numbers)
5.1 Population (Mid-year)
35220
35672
36125
36578
37032
37487
5.2 Active Population
13983
14366
14458
14698
14976
15255
5.3 Activity rate (%)
39.7
40.3
40.0
40.2
40.4
40.7
5.4 Employment
11575
12226
12593
12598
12923
13287
5.5 Workers
8582
9083
9358
9343
9551
9819
5.6
Non Workers
2993
3143
3235
3255
3372
3468
5.7 Unemployment Rate - Total (%)
17.2
14.9
12.9
14.3
13.7
12.9
5.8 Hours per worker - industry (1986=100)
102.6
104.4
101.3
102.2
103.2
103.2
5.9 Capacity Utilization - industry (%)
75.6
76.9
74.5
71.5
75.5
76.4
Average
(Annual Growth Rates, %)
1999/2001
5.10 Population
1.3
1.3
1.3
1.3
1.2
1.2
1.2
5.11 Active Population
0.7
2.7
0.6
1.7
1.9
1.9
1.8
5.12 Employment
0.9
5.6
3.0
0.0
2.6
2.8
1.8
5.13
Workers
2.6
5.8
3.0
-0.2
2.2
2.8
1.6
5.14
Non Workers
-3.8
5.0
2.9
0.6
3.6
2.8
2.4
Source: INDEC (5. land 5.7) and FIEL estimates based on INDEC, and forecast.
Unemployment Rate is an annual average and does not include "underemployment"
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 6 ARGENTINA Gross Fixed Investment
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates At Constant Prices, %)
1999/2001
6.1 Gross Fixed Investment
8.8
26.5
8.1
3.4
9.9
11.5
8.3
6.2
Construction
1.6
22.4
7.5
3.7
8.4
12.5
8.2
6.3
Public
-2.6
22.4
2.0
0.0
6.5
5.0
3.8
6.4
Private
2.0
22.4
8.0
4.0
8.6
13.2
8.6
6.5
Machinery, Tools and Transport
17.1
30.6
8.6
3.1
11.3
10.5
8.3
Equipment
6.6 Investment-Output Ratio
0.207
0.241
0.250
0.258
0.270
0.285
0.271
at constant prices
(Billions of US dollars)
6.7 Gross Fixed Investment
49.1
60.8
64.4
65.8
73.1
83.7
6.8
Construction
30.9
37.2
39.8
40.7
45.2
52.7
6.9
Public
2.9
3.6
3.6
3.6
3.9
4.2
6.10
Private
27.9
33.7
36.2
37.1
41.3
48.5
6.11 Machinery, Tools and Transport
18.2
23.5
24.6
25.1
27.9
31.0
Equipment
Source: Ministry of Economy and Public Works and FIEL estimates (6.3/6.4) and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 7 ARGENTINA Consumption and Saving
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates At Constant Prices, %)
1999/2001
7.1 Consumption plus Change in Inventories
6.1
7.8
4.2
-0.4
5.5
5.9
3.7
7.2
Public
-1.4
-1.2
-0.4
0.0
0.5
1.0
0.5
7.3
Private
7.1
8.8
4.7
-0.4
6.0
6.4
4.0
7.4
Durable Goods
13.1
10.2
10.7
-1.7
9.2
11.2
6.2
7.5
Non-Durable and Services
6.8
8.8
4.3
-0.3
5.8
6.1
3.9
7.6 GDP Per Capita
3.4
7.2
3.0
-1.2
3.9
4.3
2.3
7.7 Total Consumption Per Capita
4.8
6.4
2.9
-1.6
4.2
4.6
2.4
(Percentage of GDP, current prices)
7.8 Saving Rate
16.3
18.6
19.1
19.7
20.2
21.1
20.3
7.9
Domestic Saving Rate
15.1
15.7
15.6
15.7
15.9
16.2
15.9
7.10
External Saving Rate
1.3
2.9
3.5
4.0
4.3
4.9
4.4
(Percentage of GDP, constant prices)
7.11 Consumption plus Ch. Inventories
83.7
83.0
82.9
82.5
82.7
83.0
82.8
7.12
Public
9.0
8.1
7.8
7.8
7.4
7.1
7.4
7.13
Private
74.7
74.9
75.1
74.8
75.3
75.9
75.3
Source: Ministry of Economy and Public Works and FIEL estimates (based on INDEC) and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 8 ARGENTINA Productivity, Employment by Sectoral Origin and Labor Income
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates, %)
1999/2001
8.1 Average Productivity by Person
1.9
2.2
1.2
0.3
2.9
2.6
1.9
8.2 Average Productivity by Hour Worked
-1.1
0.4
4.3
-0.6
1.9
2.6
1.3
8.3 Total Employment (Workers)
2.6
5.8
3.0
-0.2
2.2
2.8
1.6
8.4
Agriculture
-1.0
-1.2
0.3
-0.5
-0.5
-0.5
-0.5
8.5
Mining
-0.8
2.0
4.2
1.2
-0.5
2.5
1.1
8.6
Manufacturing
-4.0
4.1
4.6
-4.9
0.3
2.2
-0.8
8.7
Construction
-0.4
18.7
7.1
-2.3
4.9
13.8
5.5
8.8
Electricity, Gas and Water
2.8
-1.6
0.9
1.4
1.4
1.6
1.5
8.9
Commerce, Restaurants and Hotels
0.6
4.0
5.8
1.6
3.6
2.0
2.4
8.10
Transport, Storage, Communications
2.4
3.9
0.7
-0.4
1.8
1.4
0.9
8.11
Banking and Housing
-2.2
8.5
1.3
0.9
1.1
0.6
0.8
8.12
Government and Other Services
7.4
7.1
2.0
0.8
2.6
2.9
2.1
9.13
Non-Government
15.2
13.2
3.6
1.3
3.9
4.0
3.1
8.14
Government
-1.4
-1.2
-0.4
0.0
0.5
1.0
0.5
8.15 Average Labor Income (Real)
0.9
0.1
-1.5
-2.8
-0.9
0.6
-1.0
8.16 Average Labor Cost (US$)
-3.6
-1.4
-1.1
-2.2
0.7
4.6
1.0
8.16 Average Hourly Income (Real)
-2.0
-1.6
1.6
-3.7
-1.9
0.6
-1.7
Source: FIEL estimates and forecast
Deflator: Consumer Price Index. Labor Cost: Average Wage in US$ adjusted by labor taxes (FIEL estimate)
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 9 ARGENTINA and Regional Exchange Rates Indices
1996
1997
1998
1999
2000
2001
(S/USS, $/SDR and Index Numbers 1986=100)
9.1 Argentina Exch Rate $/US$
1.00
1.00
1.00
1.00
1.00
1.00
9.2 Argentina Exch Rate $/SDR
1.45
1.38
1.35
1.37
1.40
1.41
9.3 Argentina Index of Real Exch Rate $/US$
57.4
57.2
56.5
57.8
56.7
55.8
9.4 Brazil Index of Real Exchange Rate
53.7
53.6
55.7
59.0
59.0
57.9
9.5 Chile Index of Real Exchange Rate
65.8
64.0
67.9
69.2
69.2
68.2
Average
(Annual Growth Rates, %)
1999/2001
9.6 Argentina Exch Rate $/US$
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.7 Argentina Exch Rate $/SDR
-4.3
-5.2
-2.0
1.9
1.8
1.1
1.6
9.6 Argentina Real Exch Rate $/US$
0.7
-0.4
-1.2
2.2
-1.8
-1.6
-0.4
9.9 Brazil Real Exchange Rate
-4.3
-0.2
3.9
6.0
0.0
-2.0
1.3
9.10 Chile Real Exchange Rate
2.8
-2.7
6.0
2.0
0.0
-1.5
0.2
Source: FIEL estimates and forecast. Real Exchange Rate: Purchasing Power Parity $/US$, using US Producer Price Index
(Total) and each country implicit deflator of GDP. SDR = Special Drawing Rights
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 10 ARGENTINA Terms of Trade
1996
1997
1998
1999
2000
2001
(Index Number 1986=100)
10.1 Terms of Trade
131.6
130.1
122.2
121.5
129.5
131.4
Average
(Annual Growth Rates, %)
1999/2001
10.2 Unit Value of World Exports
-0.8
-7.7
-6.0
0.5
3.6
3.0
2.4
10.3 Unit Value of Argentina Exports
6.2
-3.0
-11.3
0.3
8.4
2.9
3.9
10.4
Merchandises
6.7
-3.5
-12.4
0.0
9.6
3.3
4.3
10.5
Primary and Agrobased Products
11.5
-4.5
-14.0
-1.2
14.5
3.8
5.7
10.6
Manufacturing
-5.2
-0.9
-1.5
1.3
2.8
2.3
2.1
10.7
Energy
22.0
-6.0
-35.6
1.3
8.5
6.8
5.5
10.8
Non Factor Services
2.1
1.0
-2.2
0.8
1.6
1.7
1.4
10.9 Unit Value of Argentina Imports
-1.0
-1.9
-5.6
0.9
1.8
1.4
1.3
10.10
Merchandises
-1.2
-1.7
-5.4
0.9
2.1
1.7
1.6
10.11
Capital Goods
-4.4
-2.1
-5.1
1.9
0.3
-0.4
0.6
10.12
Intermediate Goods
-3.6
-2.4
-4.2
0.3
2.3
1.9
1.5
10.13
Consumption Goods
2.9
1.4
-4.4
1.3
3.3
3.0
2.5
10.14
Energy
32.2
-2.0
-35.0
1.3
9.0
7.0
5.8
10.15
Non Factor Services
2.0
0.6
-4.5
0.9
2.0
2.0
1.6
10.16 Terms of Trade
7.2
-1.1
-6.1
-0.5
6.5
1.5
2.5
Source: FIEL estimates based on INDEC, and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 11 ARGENTINA Trade
1996
1997
1998
1999
2000
2001
Average
(Quantity Indexes, Annual Growth Rates, %)
1999/2001
Factors affecting Trade
11.1 World GDP
2.9
3.2
1.6
1.9
2.7
2.8
2.5
11.2 GDP US
3.4
3.9
3.6
1.7
2.3
2.1
2.0
11.3 Regional GDP: Brazil
2.9
2.9
0.4
-2.5
4.5
5.0
2.3
11.4 Regional GDP: Chile
7.4
7.1
4.2
2.6
4.8
6.1
4.5
Trade Growth
11.5 Exports
6.7
12.1
10.3
-0.3
7.3
10.3
5.8
11.6
Merchandises
6.4
13.2
11.1
-0.9
7.9
11.1
6.0
11.7
Primary and Agrobased Products
8.5
8.1
17.6
-3.3
8.7
11.7
5.7
11.8
Manufacturing
-2.7
28.7
3.6
3.5
5.0
7.6
5.4
11.9
Energy
16.6
5.5
3.2
0.0
10.7
15.7
8.8
11.10
Non Factor Services
9.4
4.2
3.2
5.5
2.8
3.0
3.8
11.11 Imports
18.2
27.6
11.8
2.0
12.6
15.8
10.2
11.12
Merchandises
19.5
30.0
12.8
2.1
13.7
17.0
10.9
11.13
Capital Goods
23.6
40.5
9.7
5.3
12.3
14.9
10.8
11.14
Intermediate Goods
22.4
28.4
12.7
0.8
16.7
18.7
12.1
11.15
Consumption Goods
17.8
25.5
15.2
1.7
8.6
16.5
8.9
11.16
Energy
-21.1
3.9
28.4
0.1
5.9
7.0
4.3
11.17
Non Factor Services
9.6
10.8
3.2
0.6
3.4
4.2
2.7
11.18 Index of openness
18.6
19.9
19.7
20.3
21.5
22.8
21.5
Source: International: IMF, INDEC, FIEL estimate and forecast
Index 11.18 is defined as (Exports+Imports)/GDP at current prices
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 12 ARGENTINA Prices
1996
1997
1998
1999
2000
2001
Average
(Annual Average Growth Rates, %)
1999/2001
12.1 GDP Deflator
1.7
0.3
-1.0
-1.3
3.4
3.4
1.8
12.2 General Wholesale Price Index
3.2
0.1
-3.1
-2.2
3.3
3.4
1.5
12.3 Consumer Price Index
0.2
0.5
0.9
-0.4
3.5
3.4
2.1
12.4
Goods
0.0
-0.3
0.7
-0.7
3.2
4.8
2.4
12.5
Services
0.4
1.6
1.3
-0.1
3.8
1.6
1.8
12.6 Construction Price Index
-4.3
-1.5
0.0
-1.7
1.6
3.9
1.3
Source: 12.1: as estimated by the Ministry of Economy and Public Works. FIEL forecast based on the same methodology
12.2/12.6 INDEC and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
BASELINE FORECAST
Table 13 ARGENTINA and World Financial Indicators
1996
1997
1998
1999
2000
2001
(Stocks in Millions of US Dollars)
13.1 Total Domestic Deposits
53066
68172
76444
80547
91200
102719
(End of Year)
13.2 Total Domestic Deposits
50219
62786
74048
79383
88919
100455
(Annual Average)
13.3 Loans to Private Sector
51179
57780
64587
66015
75002
84732
(Annual Average)
Average
(Annual Growth Rates, %)
1999/2001
13.4 Total Domestic Deposits
22.6
28.5
12.1
5.4
13.2
12.6
10.4
(End of Year)
13.5 Total Domestic Deposits
20.1
25.0
17.9
7.2
12.0
13.0
10.7
(Annual Average)
13.6 Loans to Private Sector
2.9
12.9
11.8
2.2
13.6
13.0
9.6
(Annual Average)
Average
1999/2001
Argentina Interest Rates
(Annual Averages in Percentage)
13.7 Deposit Rate in Pesos 30 days, Nominal
6.8
6.2
6.2
5.3
5.5
6.0
5.6
13.8 Deposit Rate in Pesos, Real
5.0
5.9
7.3
6.7
2.0
2.5
3.8
13.9 Country Risk (Spread - Avge. Life 2 Year)
4.5
3.0
6.1
7.4
5.4
4.5
5.8
International
(Annual Growth Rates, % and Annual Averages)
13.10 US Producer Price Index (Total)
2.3
-0.1
-2.2
0.8
1.6
1.7
1.4
13.11 US Consumer Price Index (All Urban)
2.9
2.3
1.6
2.4
2.7
2.8
2.6
13.12 Oil Prices (WTI)
20.1
-6.5
-35.0
1.3
9.0
7.0
5.8
13.13 LIBOR 180
5.6
5.9
5.6
4.5
4.4
4.7
4.5
13.14 US Treasury 10 Years
6.4
6.4
5.3
4.8
4.8
5.1
4.9
Source: 13.1/13.7: Central Bank and FIEL estimates and forecast. Deposit rate deflator: implicit GDP deflator.
13.9 estimate based on vield over LIBOR. 13.10/13.14: IMF, and FIEL forecast
December 1998
DECEMBER 1998 SECOND ISSUE
HIGH FORECAST
TABLES
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 1 ARGENTINA Gross Domestic Product, Global Supply and Demand
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates At Constant Prices, %)
1.1 GDP at market prices
4.8
8.6
4.4
1.8
4.6
5.1
3.9
1.2 Imports of Goods and NFS
18.2
27.6
11.8
6.5
11.6
14.6
10.9
1.3 Consumption and Change in Inventories
6.1
7.8
4.2
1.8
4.8
5.3
3.9
1.4 Gross Domestic Fixed Investment
8.8
26.5
8.1
7.4
8.9
10.5
8.9
1.5 Exports of Goods and NFS
6.7
12.1
10.3
0.2
7.9
10.3
6.2
1.6 Global Supply and Demand
6.7
11.6
5.7
2.7
6.0
7.0
5.3
(Billions of US dollars)
1.7 GDP at market prices
300.3
327.1
338.0
343.2
371.6
402.9
1.8 Imports of Goods and NFS
28.3
35.4
37.4
40.3
45.8
53.2
1.9 Consumption and Change in Inventories
252.1
272.0
281.7
284.9
306.8
330.9
1.10 Gross Domestic Fixed Investment
49.1
60.8
64.4
68.6
75.8
85.9
1.11 Exports of Goods and NFS
27.4
29.8
29.2
29.9
34.8
39.4
1.12 Global Supply and Demand
328.6
362.6
375.3
383.4
417.4
456.1
Source: Ministry of Economy and Public Works and FIEL estimates and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 2 ARGENTINA Gross Domestic Product at Factor Cost by Sectoral Origin
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates at Constant Prices)
2.1 GDP at Factor Cost
4.6
8.1
4.2
1.9
4.6
5.0
3.8
2.2 Agriculture
3.0
3.3
4.8
-0.3
3.1
3.7
2.2
2.3 Mining
9.7
8.0
2.2
4.2
6.4
8.7
6.4
2.4 Manufacturing
5.3
9.2
2.0
1.2
4.6
5.2
3.7
2.5 Construction
1.3
23.5
7.5
5.3
7.8
11.4
8.2
2.6 Electricity, Gas and Water
5.0
7.4
5.7
5.1
5.7
6.1
5.6
2.7 Commerce, Restaurants and Hotels
6.4
10.4
4.3
1.5
4.9
5.5
4.0
2.8 Transport, Storage, Communications
7.0
6.8
5.4
2.3
5.3
6.1
4.6
2.9 Banking and Housing
7.2
7.6
5.1
4.1
3.7
3.7
3.8
2.10 Government and Other Services
0.1
2.9
5.0
-0.2
4.0
2.3
2.0
(Percentages of GDP)
2.11 GDP at Factor Cost
100
100
100
100
100
100
100
2.12 Agriculture
7.7
7.4
7.4
7.3
7.2
7.1
7.2
2.13 Mining
3.0
3.0
3.0
3.0
3.1
3.2
3.1
2.14 Manufacturing
25.0
25.3
24.7
24.6
24.5
24.6
24.6
2.15 Construction
5.6
6.4
6.6
6.8
7.0
7.5
7.1
2.16 Electricity, Gas and Water
2.4
2.3
2.4
2.5
2.5
2.5
2.5
2.17 Commerce, Restaurants and Hotels
16.2
16.5
16.5
16.5
16.5
16.6
16.5
2.18 Transport, Storage, Communications
5.5
5.4
5.5
5.5
5.5
5.6
5.5
2.19 Banking and Housing
16.8
16.7
16.8
17.2
17.1
16.8
17.0
2.20 Government and Other Services
17.8
16.9
17.0
16.7
16.6
16.2
16.5
Source: Ministry of Economy and Public Works and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 3 ARGENTINA Manufacturing Industry - GDP by Subsector
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates at Constant Prices)
3.1 GDP Manufacturing Industry
5.3
9.2
2.0
1.2
4.6
5.2
3.7
3.2 Food Products, Beverages and Tobacco
1.9
2.0
2.7
1.5
3.1
3.3
2.6
3.3 Textiles, Clothing and Leather Products
8.5
1.1
-3.3
-3.1
1.9
1.9
0.2
3.4 Wood Products and Furniture
12.5
4.5
4.5
1.4
3.6
4.2
3.1
3.5 Paper and Printing
7.3
4.5
2.1
2.7
6.2
6.5
5.1
3.6 Chemicals, Petroleum, Rubber, Plastic
2.7
3.3
2.1
3.3
6.0
1.9
3.7
3.7 Nonmetallic Minerals
6.3
17.0
5.9
0.6
7.3
10.5
6.1
3.8 Iron, Steel and Nonferrous Metal
12.5
6.9
3.1
-1.7
7.0
9.3
4.9
3.9 Machinery, Transport and Equipment
8.0
29.7
2.2
1.0
4.3
9.5
4.9
3.10 Other Manufacturing Industries
5.3
9.0
3.1
1.0
4.4
3.9
3.1
(Percentages of GDP)
3.11 GDP Manufacturing Industry
25.0
25.3
24.7
24.6
24.5
24.6
24.6
3.12 Food Products, Beverages and Tobacco
6.1
5.7
5.7
5.6
5.6
5.5
5.6
3.13 Textiles, Clothing and Leather Products
2.7
2.5
2.3
2.2
2.2
2.1
2.2
3.14 Wood Products and Furniture
0.6
0.5
0.5
0.5
0.5
0.5
0.5
3.15 Paper and Printing
1.6
1.5
1.5
1.5
1.5
1.5
1.5
3.16 Chemicals, Petroleum, Rubber, Plastic
6.3
6.0
5.9
5.9
6.0
5.8
5.9
3.17 Nonmetallic Minerals
1.0
1.0
1.1
1.0
1.1
1.1
1.1
3.18 Iron, Steel and Nonferrous Metal
1.3
1.3
1.3
1.3
1.3
1.3
1.3
3.19 Machinery, Transport and Equipment
5.3
6.4
6.2
6.2
6.2
6.4
6.3
3.20 Other Manufacturing Industries
0.2
0.2
0.2
0.2
0.2
0.2
0.2
Source FIEL estimates and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 4 ARGENTINA Balance of Payments and External Debt
1996
1997
1998
1999
2000
2001
(Millions of US Dollars)
4.1 Current Account (4.2+4.9+4.13)
-3787
-9429
-11805
-14886
-16344
-20331
4.2 Resource Balance (4.3-4.6)
-873
-5586
-8219
-10359
-10969
-13824
4.3
Exports of Goods and NFS
27429
29829
29170
29915
34825
39383
4.4
Merchandise Exports (FOB)
23811
26025
25330
25865
30601
34956
4.5
Non Factor Services
3618
3804
3840
4050
4224
4427
4.6
Imports of Goods and NFS
28302
35415
37389
40274
45794
53207
4.7
Merchandise Imports (CIF)
23761
30355
32399
35142
40394
47487
4.8
Non Factor Services
4541
5060
4991
5132
5400
5720
4.9 Net Factor Service Income
-3248
-4190
-4271
-5187
-5988
-7074
4.10
Interest Perceived on External Assets
4587
5384
5447
5012
5311
6094
4.11
Interest Accrued on External Debt
-5913
-7139
-7127
-7366
-8230
-9789
4.12
Royalties and Dividends
-1922
-2435
-2591
-2833
-3069
-3379
4.13 Current Transfers
334
347
685
660
613
567
4.14 Balance on Capital Account
7569
12491
13871
16703
18898
22895
4.15
Public
9580
6530
10580
12296
11228
14103
4.16
Private
-2011
5961
3290
4407
7670
8792
4.17 Net International Reserves (change)
3782
3062
2066
1817
2554
2564
4.18 Liquid External Assets of Central Bank
19745
22807
24873
26690
29244
31808
(end of year)
4.19 External Debt
99468
110171
122903
139263
157453
179086
4.20
Public
73612
74775
84155
96451
108679
123981
4.22
Private
25856
35396
38748
42812
48774
55104
4.23 External Debt/Total Exports
3.63
3.69
4.21
4.66
4.52
4.55
Average
(Annual Growth Rates, %)
1999/2001
4.24 Exports of Goods and NFS
13.3
8.8
-2.2
2.6
16.4
13.1
10.7
4.25
Merchandise Exports (FOB)
13.6
9.3
-2.7
2.1
18.3
14.2
11.6
4.26
Non Factor Services
11.7
5.2
0.9
5.5
4.3
4.8
4.9
4.27 Imports of Goods and NFS
17.0
25.1
5.6
7.7
13.7
16.2
12.5
4.28
Merchandise Imports (CIF)
18.1
27.8
6.7
8.5
14.9
17.6
13.7
4.29
Non Factor Services
11.7
11.4
-1.4
2.8
5.2
5.9
4.7
4.30 Net Factor Service Income
1.0
29.0
1.9
21.4
15.4
18.1
18.3
Source: Ministry of Economy and Public Works, adjusted as from 1993, and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 5 ARGENTINA Population, Employment and Capacity Utilization
1996
1997
1998
1999
2000
2001
(Thousands, % rates and index numbers)
5.1 Population (Mid-year)
35220
35672
36125
36578
37032
37487
5.2 Active Population
13983
14366
14458
14736
14999
15290
5.3 Activity rate (%)
39.7
40.3
40.0
40.3
40.5
40.8
5.4 Employment
11575
12226
12593
12693
12997
13287
5.5
Workers
8582
9083
9358
9408
9602
9815
5.6
Non Workers
2993
3143
3235
3286
3395
3473
5.7 Unemployment Rate - Total (%)
17.2
14.9
12.9
13.9
13.3
13.1
5.8 Hours per worker - industry (1986=100)
102.6
104.4
101.3
101.3
102.2
103.2
5.9 Capacity Utilization - industry (%)
75.6
76.9
74.5
72.8
76.2
76.7
Average
(Annual Growth Rates, %)
1999/2001
5.10 Population
1.3
1.3
1.3
1.3
1.2
1.2
1.2
5.11 Active Population
0.7
2.7
0.6
1.9
1.8
1.9
1.9
5.12 Employment
0.9
5.6
3.0
0.8
2.4
2.2
1.8
5.13
Workers
2.6
5.8
3.0
0.5
2.1
2.2
1.6
5.14
Non Workers
-3.8
5.0
2.9
1.6
3.3
2.3
2.4
Source: INDEC (5. and 5.7) and FIEL estimates based on INDEC, and forecast.
Unemployment Rate is an annual average and does not include "underemployment"
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 6 ARGENTINA Gross Fixed Investment
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates At Constant Prices, %)
1999/2001
6.1 Gross Fixed Investment
8.8
26.5
8.1
7.4
8.9
10.5
8.9
6.2
Construction
1.6
22.4
7.5
5.2
7.7
11.2
8.1
6.3
Public
-2.6
22.4
2.0
0.0
6.5
5.0
3.8
6.4
Private
2.0
22.4
8.0
5.7
7.8
11.8
8.5
6.5
Machinery, Tools and Transport
17.1
30.6
8.6
9.4
9.9
9.9
9.7
Equipment
6.6 Investment-Output Ratio
0.207
0.241
0.250
0.263
0.274
0.288
0.275
at constant prices
(Billions of US dollars)
6.7 Gross Fixed Investment
49.1
60.8
64.4
68.6
75.8
85.9
6.8
Construction
30.9
37.2
39.8
41.9
46.4
53.4
6.9
Public
2.9
3.6
3.6
3.6
3.9
4.3
6.10
Private
27.9
33.7
36.2
38.3
42.4
49.1
6.11 Machinery, Tools and Transport
18.2
23.5
24.6
26.7
29.4
32.5
Equipment
Source: Ministry of Economy and Public Works and FIEL estimates (6.3/6.4) and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 7 ARGENTINA Consumption and Saving
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates At Constant Prices, %)
1999/2001
7.1 Consumption plus Change in Inventories
6.1
7.8
4.2
1.8
4.8
5.3
3.9
7.2
Public
-1.4
-1.2
-0.4
0.0
0.5
1.0
0.5
7.3
Private
7.1
8.8
4.7
1.9
5.2
5.7
4.3
7.4
Durable Goods
13.1
10.2
10.7
3.3
8.4
10.0
7.2
7.5
Non-Durable and Services
6.8
8.8
4.3
1.9
5.0
5.4
4.1
7.6 GDP Per Capita
3.4
7.2
3.0
0.6
3.4
3.8
2.6
7.7 Total Consumption Per Capita
4.8
6.4
2.9
0.5
3.5
4.0
2.6
(Percentage of GDP, current prices)
7.8 Saving Rate
16.3
18.6
19.1
20.0
20.4
21.3
20.6
7.9
Domestic Saving Rate
15.1
15.7
15.6
15.7
16.0
16.3
16.0
7.10
External Saving Rate
1.3
2.9
3.5
4.3
4.4
5.0
4.6
(Percentage of GDP, constant prices)
7.11 Consumption plus Ch. Inventories
83.7
83.0
82.9
82.8
82.9
83.0
82.9
7.12
Public
9.0
8.1
7.8
7.6
7.3
7.1
7.3
7.13
Private
74.7
74.9
75.1
75.2
75.5
76.0
75.6
Source: Ministry of Economy and Public Works and FIEL estimates (based on INDEC) and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 8 ARGENTINA Productivity, Employment by Sectoral Origin and Labor Income
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates, %)
1999/2001
8.1 Average Productivity by Person
1.9
2.2
1.2
1.4
2.5
2.7
2.2
8.2 Average Productivity by Hour Worked
-1.1
0.4
4.3
1.4
1.5
1.8
1.6
8.3 Total Employment (Workers)
2.6
5.8
3.0
0.5
2.1
2.2
1.6
8.4
Agriculture
-1.0
-1.2
0.3
-0.5
-0.5
-0.5
-0.5
8.5
Mining
-0.8
2.0
4.2
0.3
0.9
2.5
1.2
8.6
Manufacturing
-4.0
4.1
4.6
-1.9
0.3
0.8
-0.3
8.7
Construction
-0.4
18.7
7.1
-1.3
7.3
10.4
5.5
8.8
Electricity, Gas and Water
2.8
-1.6
0.9
1.6
1.2
1.5
1.4
8.9
Commerce, Restaurants and Hotels
0.6
4.0
5.8
2.1
2.7
1.5
2.1
8.10
Transport, Storage, Communications
2.4
3.9
0.7
0.1
1.4
1.1
0.9
8.11
Banking and Housing
-2.2
8.5
1.3
0.9
0.9
0.5
0.8
8.12
Government and Other Services
7.4
7.1
2.0
1.0
2.3
2.6
2.0
9.13
Non-Government
15.2
13.2
3.6
1.6
3.5
3.5
2.9
8.14
Government
-1.4
-1.2
-0.4
0.0
0.5
1.0
0.5
8.15 Average Labor Income (Real)
0.9
0.1
-1.5
-1.5
-0.6
0.8
-0.5
8.16 Average Labor Cost (US$)
-3.6
-1.4
-1.1
-0.6
1.3
4.5
1.7
8.16 Average Hourly Income (Real)
-2.0
-1.6
1.6
-1.5
-1.6
-0.2
-1.1
Source: FIEL estimates and forecast
Deflator: Consumer Price Index. Labor Cost: Average Wage in US$ adjusted by labor taxes (FIEL estimate)
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 9 ARGENTINA and Regional Exchange Rates Indices
1996
1997
1998
1999
2000
2001
(S/USS, S/SDR and Index Numbers 1986=100)
9.1 Argentina Exch Rate $/US$
1.00
1.00
1.00
1.00
1.00
1.00
9.2 Argentina Exch Rate $/SDR
1.45
1.38
1.35
1.38
1.40
1.43
9.3 Argentina Index of Real Exch Rate $/US$
57.4
57.2
56.5
57.2
56.1
55.3
9.4 Brazil Index of Real Exchange Rate
53.7
53.6
55.7
58.4
58.4
57.2
9.5 Chile Index of Real Exchange Rate
65.8
64.0
67.9
69.1
68.7
67.7
Average
(Annual Growth Rates, %)
1999/2001
9.6 Argentina Exch Rate $/US$
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.7 Argentina Exch Rate $/SDR
-4.3
-5.2
-2.0
2.1
2.0
1.5
1.9
9.6 Argentina Real Exch Rate $/US$
0.7
-0.4
-1.2
1.1
-1.8
-1.4
-0.7
9.9 Brazil Real Exchange Rate
-4.3
-0.2
3.9
4.8
0.0
-2.0
0.9
9.10 Chile Real Exchange Rate
2.8
-2.7
6.0
1.8
-0.5
-1.5
-0.1
Source: FIEL estimates and forecast. Real Exchange Rate: Purchasing Power Parity $/US$, using US Producer Price Index
(Total) and each country implicit deflator of GDP. SDR = Special Drawing Rights
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 10 ARGENTINA Terms of Trade
1996
1997
1998
1999
2000
2001
(Index Number 1986=100)
10.1 Terms of Trade
131.6
130.1
122.2
123.6
130.9
132.2
Average
(Annual Growth Rates, %)
1999/2001
10.2 Unit Value of World Exports
-0.8
-7.7
-6.0
1.5
3.8
3.0
2.8
10.3 Unit Value of Argentina Exports
6.2
-3.0
-11.3
2.3
7.9
2.5
4.2
10.4
Merchandises
6.7
-3.5
-12.4
2.4
9.1
2.7
4.7
10.5
Primary and Agrobased Products
11.5
-4.5
-14.0
2.6
13.4
3.0
6.3
10.6
Manufacturing
-5.2
-0.9
-1.5
1.5
2.4
2.2
2.0
10.7
Energy
22.0
-6.0
-35.6
3.9
9.0
6.8
6.6
10.8
Non Factor Services
2.1
1.0
-2.2
0.8
1.6
1.7
1.4
10.9 Unit Value of Argentina Imports
-1.0
-1.9
-5.6
1.2
1.9
1.4
1.5
10.10
Merchandises
-1.2
-1.7
-5.4
1.4
2.2
1.7
1.8
10.11
Capital Goods
-4.4
-2.1
-5.1
1.6
0.4
-0.4
0.5
10.12
Intermediate Goods
-3.6
-2.4
-4.2
0.9
2.4
1.9
1.7
10.13
Consumption Goods
2.9
1.4
-4.4
1.7
3.3
3.0
2.7
10.14
Energy
32.2
-2.0
-35.0
4.5
9.0
7.0
6.8
10.15
Non Factor Services
2.0
0.6
-4.5
1.0
2.0
2.0
1.7
10.16 Terms of Trade
7.2
-1.1
-6.1
1.1
5.9
1.0
2.7
Source: FIEL estimates based on INDEC, and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 11 ARGENTINA Trade
1996
1997
1998
1999
2000
2001
Average
(Quantity Indexes, Annual Growth Rates, %)
1999/2001
Factors affecting Trade
11.1 World GDP
2.9
3.2
1.6
2.0
2.7
2.8
2.5
11.2 GDP US
3.4
3.9
3.6
1.8
2.1
2.1
2.0
11.3 Regional GDP: Brazil
2.9
2.9
0.4
-2.4
4.7
5.1
2.5
11.4 Regional GDP: Chile
7.4
7.1
4.2
3.5
4.8
6.1
4.8
Trade Growth
11.5 Exports
6.7
12.1
10.3
0.2
7.9
10.3
6.2
11.6
Merchandises
6.4
13.2
11.1
-0.2
8.5
11.2
6.5
11.7
Primary and Agrobased Products
8.5
8.1
17.6
-3.1
9.2
11.3
5.8
11.8
Manufacturing
-2.7
28.7
3.6
4.4
6.0
8.6
6.3
11.9
Energy
16.6
5.5
3.2
1.8
11.1
15.9
9.6
11.10
Non Factor Services
9.4
4.2
3.2
4.6
2.6
3.1
3.4
11.11 Imports
18.2
27.6
11.8
6.5
11.6
14.6
10.9
11.12
Merchandises
19.5
30.0
12.8
7.0
12.5
15.6
11.7
11.13
Capital Goods
23.6
40.5
9.7
8.2
11.3
14.0
11.2
11.14
Intermediate Goods
22.4
28.4
12.7
6.5
14.9
17.2
12.9
11.15
Consumption Goods
17.8
25.5
15.2
7.4
8.6
14.7
10.2
11.16
Energy
-21.1
3.9
28.4
1.8
4.9
6.2
4.3
11.17
Non Factor Services
9.6
10.8
3.2
1.8
3.1
3.9
2.9
11.18 Index of openness
18.6
19.9
19.7
20.5
21.7
23.0
21.7
Source: International: IMF, INDEC, FIEL estimate and forecast
Index 11.18 is defined as (Exports+Imports)/GDP at current prices
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 12 ARGENTINA Prices
1996
1997
1998
1999
2000
2001
Average
(Annual Average Growth Rates, %)
1999/2001
12.1 GDP Deflator
1.7
0.3
-1.0
-0.3
3.5
3.2
2.1
12.2 General Wholesale Price Index
3.2
0.1
-3.1
-1.0
3.6
3.3
2.0
12.3 Consumer Price Index
0.2
0.5
0.9
0.4
3.4
3.0
2.3
12.4
Goods
0.0
-0.3
0.7
0.4
3.4
4.4
2.7
12.5
Services
0.4
1.6
1.3
0.3
3.4
1.3
1.7
12.6 Construction Price Index
-4.3
-1.5
0.0
-0.2
2.0
3.7
1.8
Source: 12. as estimated by the Ministry of Economy and Public Works. FIEL forecast based on the same methodology
12.2/12.6 INDEC and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
HIGH FORECAST
Table 13 ARGENTINA and World Financial Indicators
1996
1997
1998
1999
2000
2001
(Stocks in Millions of US Dollars)
13.1 Total Domestic Deposits
53066
68172
76444
83897
94645
105739
(End of Year)
13.2 Total Domestic Deposits
50219
62786
74048
82188
92257
103530
(Annual Average)
13.3 Loans to Private Sector
51179
57780
64587
70782
79453
89162
(Annual Average)
Average
(Annual Growth Rates, %)
1999/2001
13.4 Total Domestic Deposits
22.6
28.5
12.1
9.7
12.8
11.7
11.4
(End of Year)
13.5 Total Domestic Deposits
20.1
25.0
17.9
11.0
12.3
12.2
11.8
(Annual Average)
13.6 Loans to Private Sector
2.9
12.9
11.8
9.6
12.3
12.2
11.4
(Annual Average)
Average
1999/2001
Argentina Interest Rates
(Annual Averages in Percentage)
13.7 Deposit Rate in Pesos 30 days, Nominal
6.8
6.2
6.2
5.2
5.3
6.0
5.5
13.8 Deposit Rate in Pesos, Real
5.0
5.9
7.3
5.5
1.7
2.8
3.3
13.9 Country Risk (Spread - Avge. Life 2 Year)
4.5
3.0
6.1
5.8
5.0
4.3
5.0
International
(Annual Growth Rates, % and Annual Averages)
13.10 US Producer Price Index (Total)
2.3
-0.1
-2.2
0.8
1.6
1.7
1.4
13.11 US Consumer Price Index (All Urban)
2.9
2.3
1.6
2.4
2.7
2.8
2.6
13.12 Oil Prices (WTI)
20.1
-6.5
-35.0
4.5
9.0
7.0
6.8
13.13 LIBOR 180
5.6
5.9
5.6
4.8
4.8
5.2
4.9
13.14 US Treasury 10 Years
6.4
6.4
5.3
4.9
5.1
5.2
5.1
Source: 13.1/13.7: Central Bank and FIEL estimates and forecast. Deposit rate deflator: implicit GDP deflator.
13.9 estimate based on vield over LIBOR. 13.10/13.14: IMF, and FIEL forecast
December 1998
DECEMBER 1998 SECOND ISSUE
Low FORECAST
TABLES
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 1 ARGENTINA Gross Domestic Product, Global Supply and Demand
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates At Constant Prices, %)
1.1 GDP at market prices
4.8
8.6
4.4
-2.1
4.1
5.4
2.5
1.2 Imports of Goods and NFS
18.2
27.6
11.8
-6.6
8.9
15.6
6.0
1.3 Consumption and Change in Inventories
6.1
7.8
4.2
-2.8
4.4
5.9
2.5
1.4 Gross Domestic Fixed Investment
8.8
26.5
8.1
-3.4
7.4
10.2
4.7
1.5 Exports of Goods and NFS
6.7
12.1
10.3
-3.2
4.3
10.5
3.9
1.6 Global Supply and Demand
6.7
11.6
5.7
-2.9
5.0
7.3
3.1
(Billions of US dollars)
1.7 GDP at market prices
300.3
327.1
338.0
321.7
341.4
369.0
1.8 Imports of Goods and NFS
28.3
35.4
37.4
34.9
38.5
45.2
1.9 Consumption and Change in Inventories
252.1
272.0
281.7
268.3
283.8
305.9
1.10 Gross Domestic Fixed Investment
49.1
60.8
64.4
60.7
66.1
73.3
1.11 Exports of Goods and NFS
27.4
29.8
29.2
27.5
30.1
35.1
1.12 Global Supply and Demand
328.6
362.6
375.3
356.6
379.9
414.3
Source: Ministry of Economy and Public Works and FIEL estimates and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 2 ARGENTINA Gross Domestic Product at Factor Cost by Sectoral Origin
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates at Constant Prices)
2.1 GDP at Factor Cost
4.6
8.1
4.2
-1.9
4.1
5.3
2.5
2.2 Agriculture
3.0
3.3
4.8
-1.8
2.2
3.8
1.4
2.3 Mining
9.7
8.0
2.2
2.5
4.5
8.4
5.1
2.4 Manufacturing
5.3
9.2
2.0
-5.8
3.9
5.7
1.2
2.5 Construction
1.3
23.5
7.5
-2.9
7.3
10.3
4.9
2.6 Electricity, Gas and Water
5.0
7.4
5.7
3.1
4.5
5.4
4.4
2.7 Commerce, Restaurants and Hotels
6.4
10.4
4.3
-3.8
4.5
6.2
2.3
2.8 Transport, Storage, Communications
7.0
6.8
5.4
-1.9
4.5
6.7
3.1
2.9 Banking and Housing
7.2
7.6
5.1
1.5
3.1
3.7
2.8
2.10 Government and Other Services
0.1
2.9
5.0
1.0
4.5
3.2
2.9
(Percentages of GDP)
2.11 GDP at Factor Cost
100
100
100
100
100
100
100
2.12 Agriculture
7.7
7.4
7.4
7.4
7.3
7.2
7.3
2.13 Mining
3.0
3.0
3.0
3.1
3.1
3.2
3.1
2.14 Manufacturing
25.0
25.3
24.7
23.7
23.7
23.8
23.7
2.15 Construction
5.6
6.4
6.6
6.5
6.7
7.1
6.8
2.16 Electricity, Gas and Water
2.4
2.3
2.4
2.5
2.5
2.5
2.5
2.17 Commerce, Restaurants and Hotels
16.2
16.5
16.5
16.2
16.3
16.4
16.3
2.18 Transport, Storage, Communications
5.5
5.4
5.5
5.5
5.5
5.6
5.5
2.19 Banking and Housing
16.8
16.7
16.8
17.4
17.3
17.0
17.2
2.20 Government and Other Services
17.8
16.9
17.0
17.5
17.6
17.3
17.5
Source: Ministry of Economy and Public Works and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 3 ARGENTINA Manufacturing Industry - GDP by Subsector
Average
1996
1997
1998
1999
2000
2001
1999/2001
(Annual Growth Rates at Constant Prices)
3.1 GDP Manufacturing Industry
5.3
9.2
2.0
-5.8
3.9
5.7
1.2
3.2 Food Products, Beverages and Tobacco
1.9
2.0
2.7
-0.7
2.9
3.6
1.9
3.3 Textiles, Clothing and Leather Products
8.5
1.1
-3.3
-7.0
7.0
4.9
1.6
3.4 Wood Products and Furniture
12.5
4.5
4.5
-3.2
2.6
4.8
1.4
3.5 Paper and Printing
7.3
4.5
2.1
-3.1
5.9
7.6
3.5
3.6 Chemicals, Petroleum, Rubber, Plastic
2.7
3.3
2.1
-0.6
4.0
2.5
2.0
3.7 Nonmetallic Minerals
6.3
17.0
5.9
-6.6
6.7
9.5
3.2
3.8 Iron, Steel and Nonferrous Metal
12.5
6.9
3.1
-10.1
5.3
10.5
1.9
3.9 Machinery, Transport and Equipment
8.0
29.7
2.2
-14.7
2.1
9.4
-1.1
3.10 Other Manufacturing Industries
5.3
9.0
3.1
-2.4
5.0
5.7
2.7
(Percentages of GDP)
3.11 GDP Manufacturing Industry
25.0
25.3
24.7
23.7
23.7
23.8
23.7
3.12 Food Products, Beverages and Tobacco
6.1
5.7
5.7
5.7
5.7
5.6
5.7
3.13 Textiles, Clothing and Leather Products
2.7
2.5
2.3
2.2
2.3
2.3
2.3
3.14 Wood Products and Furniture
0.6
0.5
0.5
0.5
0.5
0.5
0.5
3.15 Paper and Printing
1.6
1.5
1.5
1.5
1.5
1.5
1.5
3.16 Chemicals, Petroleum, Rubber, Plastic
6.3
6.0
5.9
5.9
5.9
5.8
5.9
3.17 Nonmetallic Minerals
1.0
1.0
1.1
1.0
1.0
1.1
1.0
3.18 Iron, Steel and Nonferrous Metal
1.3
1.3
1.3
1.2
1.2
1.3
1.2
3.19 Machinery, Transport and Equipment
5.3
6.4
6.2
5.4
5.3
5.5
5.4
3.20 Other Manufacturing Industries
0.2
0.2
0.2
0.2
0.2
0.2
0.2
Source FIEL estimates and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 4 ARGENTINA Balance of Payments and External Debt
1996
1997
1998
1999
2000
2001
(Millions of US Dollars)
4.1 Current Account (4.2+4.9+4.13)
-3787
-9429
-11805
-11480
-13668
-16058
4.2 Resource Balance (4.3-4.6)
-873
-5586
-8219
-7333
-8424
-10135
4.3
Exports of Goods and NFS
27429
29829
29170
27519
30094
35107
4.4
Merchandise Exports (FOB)
23811
26025
25330
23568
26022
30826
4.5
Non Factor Services
3618
3804
3840
3951
4072
4281
4.6
Imports of Goods and NFS
28302
35415
37389
34852
38518
45242
4.7
Merchandise Imports (CIF)
23761
30355
32399
30026
33518
39927
4.8
Non Factor Services
4541
5060
4991
4826
5001
5315
4.9 Net Factor Service Income
-3248
-4190
-4271
-5010
-5925
-6468
4.10
Interest Perceived on External Assets
4587
5384
5447
4177
4533
5308
4.11
Interest Accrued on External Debt
-5913
-7139
-7127
-6427
-7410
-8597
4.12
Royalties and Dividends
-1922
-2435
-2591
-2759
-3047
-3179
4.13 Current Transfers
334
347
685
863
681
545
4.14 Balance on Capital Account
7569
12491
13871
10491
15352
18468
4.15
Public
9580
6530
10580
12624
9666
10984
4.16
Private
-2011
5961
3290
-2133
5686
7483
4.17 Net International Reserves (change)
3782
3062
2066
-989
1684
2410
4.18 Liquid External Assets of Central Bank
19745
22807
24873
23884
25568
27977
(end of year)
4.19 External Debt
99468
110171
122904
133878
148501
166167
4.20
Public
73612
74775
84155
96779
107446
119630
4.22
Private
25856
35396
38748
37099
41056
46537
4.23 External Debt/Total Exports
3.63
3.69
4.21
4.86
4.93
4.73
Average
(Annual Growth Rates, %)
1999/2001
4.24 Exports of Goods and NFS
13.3
8.8
-2.2
-5.7
9.4
16.7
6.8
4.25
Merchandise Exports (FOB)
13.6
9.3
-2.7
-7.0
10.4
18.5
7.3
4.26
Non Factor Services
11.7
5.2
0.9
2.9
3.1
5.1
3.7
4.27 Imports of Goods and NFS
17.0
25.1
5.6
-6.8
10.5
17.5
7.1
4.28
Merchandise Imports (CIF)
18.1
27.8
6.7
-7.3
11.6
19.1
7.8
4.29
Non Factor Services
11.7
11.4
-1.4
-3.3
3.6
6.3
2.2
4.30 Net Factor Service Income
1.0
29.0
1.9
17.3
18.3
9.2
14.9
Source: Ministry of Economy and Public Works, adjusted as from 1993, and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 5 ARGENTINA Population, Employment and Capacity Utilization
1996
1997
1998
1999
2000
2001
(Thousands, % rates and index numbers)
5.1 Population (Mid-year)
35220
35672
36125
36578
37032
37487
5.2 Active Population
13983
14366
14458
14666
14927
15207
5.3 Activity rate (%)
39.7
40.3
40.0
40.1
40.3
40.6
5.4 Employment
11575
12226
12593
12445
12698
13049
5.5 Workers
8582
9083
9358
9232
9391
9642
5.6
Non Workers
2993
3143
3235
3213
3307
3406
5.7 Unemployment Rate - Total (%)
17.2
14.9
12.9
15.1
14.9
14.2
5.8 Hours per worker - industry (1986=100)
102.6
104.4
101.3
101.3
101.7
101.7
5.9 Capacity Utilization - industry (%)
75.6
76.9
74.5
71.0
73.5
74.7
Average
(Annual Growth Rates, %)
1999/2001
5.10 Population
1.3
1.3
1.3
1.3
1.2
1.2
1.2
5.11 Active Population
0.7
2.7
0.6
1.4
1.8
1.9
1.7
5.12 Employment
0.9
5.6
3.0
-1.2
2.0
2.8
1.2
5.13
Workers
2.6
5.8
3.0
-1.4
1.7
2.7
1.0
5.14
Non Workers
-3.8
5.0
2.9
-0.7
2.9
3.0
1.8
Source: INDEC land 5.7) and FIEL estimates based on INDEC, and forecast.
Unemployment Rate is an annual average and does not include "underemployment"
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 6 ARGENTINA Gross Fixed Investment
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates At Constant Prices, %)
1999/2001
6.1 Gross Fixed Investment
8.8
26.5
8.1
-3.4
7.4
10.2
4.7
6.2
Construction
1.6
22.4
7.5
-2.8
7.1
10.1
4.8
6.3
Public
-2.6
22.4
2.0
-10.0
8.0
9.0
2.3
6.4
Private
2.0
22.4
8.0
-2.1
7.0
10.2
5.0
6.5
Machinery, Tools and Transport
17.1
30.6
8.6
-3.8
7.6
10.2
4.7
Equipment
6.6 Investment-Output Ratio
0.207
0.241
0.250
0.247
0.254
0.266
0.256
at constant prices
(Billions of US dollars)
6.7 Gross Fixed Investment
49.1
60.8
64.4
60.7
66.1
73.3
6.8
Construction
30.9
37.2
39.8
37.6
41.2
45.9
6.9
Public
2.9
3.6
3.6
3.2
3.5
3.8
6.10
Private
27.9
33.7
36.2
34.5
37.7
42.1
6.11 Machinery, Tools and Transport
18.2
23.5
24.6
23.1
24.9
27.4
Equipment
Source: Ministry of Economy and Public Works and FIEL estimates (6.3/6.4) and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 7 ARGENTINA Consumption and Saving
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates At Constant Prices, %)
1999/2001
7.1 Consumption plus Change in Inventories
6.1
7.8
4.2
-2.8
4.4
5.9
2.5
7.2
Public
-1.4
-1.2
-0.4
-0.5
1.0
1.0
0.5
7.3
Private
7.1
8.8
4.7
-3.0
4.8
6.3
2.7
7.4
Durable Goods
13.1
10.2
10.7
-7.2
6.2
11.3
3.5
7.5
Non-Durable and Services
6.8
8.8
4.3
-2.8
4.7
6.1
2.7
7.6 GDP Per Capita
3.4
7.2
3.0
-3.3
2.8
4.1
1.2
7.7 Total Consumption Per Capita
4.8
6.4
2.9
-4.0
3.1
4.6
1.2
(Percentage of GDP, current prices)
7.8 Saving Rate
16.3
18.6
19.1
18.9
19.4
19.9
19.4.
7.9
Domestic Saving Rate
15.1
15.7
15.6
15.3
15.4
15.5
15.4
7.10
External Saving Rate
1.3
2.9
3.5
3.6
4.0
4.4
4.0
(Percentage of GDP, constant prices)
7.11 Consumption plus Ch. Inventories
83.7
83.0
82.9
82.3
82.5
82.9
82.6
7.12
Public
9.0
8.1
7.8
7.9
7.7
7.3
7.6
7.13
Private
74.7
74.9
75.1
74.4
74.8
75.5
74.9
Source: Ministry of Economy and Public Works and FIEL estimates (based on INDEC) and forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 8 ARGENTINA Productivity, Employment by Sectoral Origin and Labor Income
1996
1997
1998
1999
2000
2001
Average
(Annual Growth Rates, %)
1999/2001
8.1 Average Productivity by Person
1.9
2.2
1.2
-0.6
2.4
2.5
1.4
8.2 Average Productivity by Hour Worked
-1.1
0.4
4.3
-0.6
1.9
2.5
1.3
8.3 Total Employment (Workers)
2.6
5.8
3.0
-1.4
1.7
2.7
1.0
8.4
Agriculture
-1.0
-1.2
0.3
-0.5
-0.5
-0.5
-0.5
8.5
Mining
-0.8
2.0
4.2
1.7
-1.6
2.1
0.7
8.6
Manufacturing
-4.0
4.1
4.6
-7.1
-1.0
1.8
-2.1
8.7
Construction
-0.4
18.7
7.1
-6.9
2.2
12.7
2.7
8.8
Electricity, Gas and Water
2.8
-1.6
0.9
1.2
1.2
1.3
1.2
8.9
Commerce, Restaurants and Hotels
0.6
4.0
5.8
1.1
1.9
2.4
1.8
8.10
Transport, Storage, Communications
2.4
3.9
0.7
-1.4
1.2
1.9
0.6
8.11
Banking and Housing
-2.2
8.5
1.3
0.5
0.8
0.9
0.7
8.12
Government and Other Services
7.4
7.1
2.0
-0.2
2.9
2.6
1.8
9.13
Non-Government
15.2
13.2
3.6
-0.1
4.1
3.6
2.6
8.14
Government
-1.4
-1.2
-0.4
-0.5
1.0
1.0
0.5
8.15 Average Labor Income (Real)
0.9
0.1
-1.5
-3.1
-1.9
1.0
-1.3
8.16 Average Labor Cost (US$)
-3.6
-1.4
-1.1
-3.1
1.3
0.6
-0.4
8.16 Average Hourly Income (Real)
-2.0
-1.6
1.6
-3.1
-2.4
1.0
-1.5
Source: FIEL estimates and forecast
Deflator: Consumer Price Index. Labor Cost: Average Wage in US$ adjusted by labor taxes (FIEL estimate)
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 9 ARGENTINA and Regional Exchange Rates Indices
1996
1997
1998
1999
2000
2001
(S/USS, S/SDR and Index Numbers 1986=100)
9.1 Argentina Exch Rate $/US$
1.00
1.00
1.00
1.00
1.00
1.00
9.2 Argentina Exch Rate $/SDR
1.45
1.38
1.35
1.37
1.39
1.42
9.3 Argentina Index of Real Exch Rate $/US$
57.4
57.2
56.5
57.3
56:6
56.1
9.4 Brazil Index of Real Exchange Rate
53.7
53.6
55.7
59.9
61.1
59.8
9.5 Chile Index of Real Exchange Rate
65.8
64.0
67.9
70.9
71.6
69.8
Average
(Annual Growth Rates, %)
1999/2001
9.6 Argentina Exch Rate $/US$
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.7 Argentina Exch Rate $/SDR
-4.3
-5.2
-2.0
1.5
1.5
2.0
1.7
9.6 Argentina Real Exch Rate $/US$
0.7
-0.4
-1.2
1.3
-1.1
-0.8
-0.2
9.9 Brazil Real Exchange Rate
-4.3
-0.2
3.9
7.5
2.0
-2.0
2.5
9.10 Chile Real Exchange Rate
2.8
-2.7
6.0
4.5
1.0
-2.5
1.0
Source: FIEL estimates and forecast. Real Exchange Rate: Purchasing Power Parity $/US$, using US Producer Price Index
(Total) and each country implicit deflator of GDP. SDR = Special Drawing Rights
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 10 ARGENTINA Terms of Trade
1996
1997
1998
1999
2000
2001
(Index Number 1986=100)
10.1 Terms of Trade
131.6
130.1
122.2
119.3
123.2
128.0
Average
(Annual Growth Rates, %)
1999/2001
10.2 Unit Value of World Exports
-0.8
-7.7
-6.0
-0.5
2.5
3.5
1.8
10.3 Unit Value of Argentina Exports
6.2
-3.0
-11.3
-2.6
4.8
5.6
2.6
10.4
Merchandises
6.7
-3.5
-12.4
-3.1
5.6
6.4
3.0
10.5
Primary and Agrobased Products
11.5
-4.5
-14.0
-4.1
8.9
8.7
4.5
10.6
Manufacturing
-5.2
-0.9
-1.5
-3.3
0.3
3.1
0.1
10.7
Energy
22.0
-6.0
-35.6
0.2
6.6
7.3
4.7
10.8
Non Factor Services
2.1
1.0
-2.2
-1.5
0.8
1.7
0.3
10.9 Unit Value of Argentina Imports
-1.0
-1.9
-5.6
-0.2
1.5
1.6
1.0
10.10
Merchandises
-1.2
-1.7
-5.4
-0.2
1.8
2.0
1.2
10.11
Capital Goods
-4.4
-2.1
-5.1
-1.2
1.4
0.6
0.2
10.12
Intermediate Goods
-3.6
-2.4
-4.2
-0.3
1.6
2.2
1.1
10.13
Consumption Goods
2.9
1.4
-4.4
1.1
3.0
3.2
2.4
10.14
Energy
32.2
-2.0
-35.0
0.0
7.0
8.0
5.0
10.15
Non Factor Services
2.0
0.6
-4.5
-1.4
1.1
2.0
0.6
10.16 Terms of Trade
7.2
-1.1
-6.1
-2.4
3.3
3.9
1.6
Source: FIEL estimates based on INDEC, and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 11 ARGENTINA Trade
1996
1997
1998
1999
2000
2001
Average
(Quantity Indexes, Annual Growth Rates, %)
1999/2001
Factors affecting Trade
11.1 World GDP
2.9
3.2
1.6
1.6
1.8
2.7
2.0
11.2 GDP US
3.4
3.9
3.6
1.0
1.4
2.6
1.7
11.3 Regional GDP: Brazil
2.9
2.9
0.4
-4.0
3.5
5.7
1.7
11.4 Regional GDP: Chile
7.4
7.1
4.2
1.5
4.5
6.3
4.1
Trade Growth
11.5 Exports
6.7
12.1
10.3
-3.2
4.3
10.5
3.9
11.6
Merchandises
6.4
13.2
11.1
-4.0
4.6
11.4
4.0
11.7
Primary and Agrobased Products
8.5
8.1
17.6
-4.8
5.4
11.3
4.0
11.8
Manufacturing
-2.7
28.7
3.6
-0.1
2.0
8.2
3.4
11.9
Energy
16.6
5.5
3.2
-8.7
6.9
18.2
5.5
11.10
Non Factor Services
9.4
4.2
3.2
4.4
2.2
3.4
3.4
11.11 Imports
18.2
27.6
11.8
-6.6
8.9
15.6
6.0
11.12
Merchandises
19.5
30.0
12.8
-7.1
9.7
16.8
6.5
11.13
Capital Goods
23.6
40.5
9.7
-10.6
10.4
21.7
7.2
11.14
Intermediate Goods
22.4
28.4
12.7
-5.7
12.5
17.4
8.1
11.15
Consumption Goods
17.8
25.5
15.2
-7.0
1.5
9.9
1.5
11.16
Energy
-21.1
3.9
28.4
-3.7
4.6
6.3
2.4
11.17
Non Factor Services
9.6
10.8
3.2
-1.9
2.5
4.2
1.6
11.18 Index of openness
18.6
19.9
19.7
19.4
20.1
21.8
20.4
Source: International: IMF, INDEC, FIEL estimate and forecast
Index 11.18 is defined as (Exports+Imports)/GDP at current prices
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 12 ARGENTINA Prices
1996
1997
1998
1999
2000
2001
Average
(Annual Average Growth Rates, %)
1999/2001
12.1 GDP Deflator
1.7
0.3
-1.0
-2.8
1.9
2.5
0.6
12.2 General Wholesale Price Index
3.2
0.1
-3.1
-3.8
1.5
2.6
0.1
12.3 Consumer Price Index
0.2
0.5
0.9
-1.7
2.4
2.4
1.0
12.4
Goods
0.0
-0.3
0.7
-2.7
2.0
2.9
0.8
12.5
Services
0.4
1.6
1.3
-0.4
2.8
1.8
1.4
12.6 Construction Price Index
-4.3
-1.5
0.0
-2.7
1.5
0.9
-0.1
Source: 12.1. as estimated by the Ministry of Economy and Public Works. FIEL forecast based on the same methodology
12.2/12.6 INDEC and FIEL forecast
December 1998
FMF FIEL MACROECONOMIC FORECASTS
SECOND ISSUE
LOW FORECAST
Table 13 ARGENTINA and World Financial Indicators
1996
1997
1998
1999
2000
2001
(Stocks in Millions of US Dollars)
13.1 Total Domestic Deposits
53066
68172
76444
72462
79274
89274
(End of Year)
13.2 Total Domestic Deposits
50219
62786
74048
72575
78089
87296
(Annual Average)
13.3 Loans to Private Sector
51179
57780
64587
60354
65867
73633
(Annual Average)
Average
(Annual Growth Rates, %)
1999/2001
13.4 Total Domestic Deposits
22.6
28.5
12.1
-5.2
9.4
12.6
5.6
(End of Year)
13.5 Total Domestic Deposits
20.1
25.0
17.9
-2.0
7.6
11.8
5.8
(Annual Average)
13.6 Loans to Private Sector
2.9
12.9
11.8
-6.6
9.1
11.8
4.8
(Annual Average)
Average
1999/2001
Argentina Interest Rates
(Annual Averages in Percentage)
13.7 Deposit Rate in Pesos 30 days, Nominal
6.8
6.2
6.2
5.0
5.1
6.0
5.4
13.8 Deposit Rate in Pesos, Real
5.0
5.9
7.3
8.0
3.1
3.4
4.8
13.9 Country Risk (Spread - Avge. Life 2 Year)
4.5
3.0
6.1
8.0
6.0
4.5
6.2
International
(Annual Growth Rates, % and Annual Averages)
13.10 US Producer Price Index (Total)
2.3
-0.1
-2.2
-1.5
0.8
1.7
0.3
13.11 US Consumer Price Index (All Urban)
2.9
2.3
1.6
2.2
2.6
2.8
2.5
13.12 Oil Prices (WTI)
20.1
-6.5
-35.0
0.0
7.0
8.0
5.0
13.13 LIBOR 180
5.6
5.9
5.6
4.0
4.2
4.7
4.3
13.14 US Treasury 10 Years
6.4
6.4
5.3
4.3
4.5
5.2
4.7
Source: 13.1/13.7: Central Bank and FIEL estimates and forecast. Deposit rate deflator: implicit GDP deflator.
13.9 estimate based on vield over LIBOR. 13.10/13.14: IMF, and FIEL forecast
December 1998
MCG
PROYECTO DE ESTUDIO SOBRE EL
CAMBIO CLIMATICO EN ARGENTINA
PROYECTO ARG/95/G/31-PNUD-SECYT
INFORME FINAL DEL SUB-PROYECTO
ESTUDIO DE MITIGACION DE GASES
DE EFECTO INVERNADERO
Buenos Aires, diciembre 1997
Resumen Ejecutivo
XVII
EXECUTIVE SUMMARY
1. The problems of climate change in developing countries
Although in the near future developing countries (PVD) are not required to undertake actions to
mitigate greenhouse gases (GHG) emission according to commitments contained in Agenda 21, the
increase in GHG concentration in the atmosphere and its potential consequences on the climate
should be considered by all countries in the planet.
S
The uncertainty margin is significant, in spite of which consensus exists in the scientific field
regarding the fact that the characteristics of global warming are of an anthropogenic origin.
Amidst this context of uncertainty the implementation -or non implementation- of actions to
a
mitigate climate changes' eventual effects should be decided. Bearing in mind that such effects can
be significant in socio-economic terms, the principle of caution should be employed when applying
policies: whenever the future effect of a present cause is uncertain but can be very damaging or
irreversible, it is prudent to act immediately and eliminate the causes that are best known among those
on which action can be taken.
Such aspect is especially critical in the PVDs considering that the degree of vulnerability to
possible phenomena strategically relates with social groups' capacity to absorb, dampen or mitigate
the effects of such changes, which depend on the possibility to have technology, infrastructure and
adequate means available.
In general, when discussing the impacts of climate change mitigation actions on the PVDs, the
consequences that a mitigation policy implemented in a PVD would have on its own economic and
social development are considered. However, the importance of analyzing the impact caused on
PVDs' economic development possibilities by a growingly restrictive international context regarding
GHG emission should be mentioned here.
In such sense, it should be borne in mind that most of the fossil energy traded in the international
market originates in developing countries and passes to industrialized countries. A similar situation
could appear in the market of other energy-intensive products, especially basic goods such as steel
and other metals. On the other hand, since globalization started to evidence the need for economic
adjustments in industrialized countries, the idea that international trade should be somehow regulated
to prevent disloyal competition in the markets started to take root. Some voices started to demand that
social and environmental aspects be considered in such regulations. The arguments presented in
COP3 to delay the fulfillment of commitments by industrialized countries directly relate to such aspect.
Such considerations about impacts on development are not aimed at debating the inconvenience
of climate change mitigation, which according to all analyses should be implemented in the short term.
It seems important, however, to bear such aspects in mind at the time of agreeing on actions to be
implemented and cost allocation.
The present degree of concentration is the result of a historic process during which one part of the
planet used a Natural Capital, a commonly owned resource, applying, in the absence of control and
regulation the "Law of Capture" overexploiting said resource and turning it from a "pure" into an
XVIII
Estudio de Mitigación de Gases de Efecto Invernadero
"impure" good, bringing about consequences for its own population and the rest of the planet. The
short and long-term consequences are the additional costs to be paid by not having "free access" to
such resource.
Such differential responsibility and the incorporation of equity-related considerations to climate
change mitigation would force to alter the whole methodological approach to debating this issue,
which can therefore not be omitted from a report on Greenhouse Gases mitigation actions.
2. Diagnosis of the Argentine situation
The socio-economic context
The Argentine economy has gone through successive development stages. The present one, dating
back to the late '80s involves many causes and conditioning factors and exhibits two major features:
greater internationalization of the economy and the State's withdrawal from goods and services'
production.
The present economic program comprises three lines: prices stabilization on the basis of a
convertibility plan, deregulation of the domestic market and State reform.
As a result of such reforms and a certain favorable international situation, growth started to expand.
According to official estimates, the rise in GDP as of 1991 was significant, encouraging however a
structural trend that evidences a relative lower participation by the primary and secondary sectors.
The economic reactivation that started in the second half of 1996 apparently resulted from both
improvements in foreign funding conditions and growth in certain industrial areas within the
MERCOSUR.
The energy context
The Argentine energy system evidences the major role played by Oil (50%) and Natural Gas (36%)
in primary energy production, versus the low relevance of fuels of vegetable origin and coal, although
such percentages may be overestimated because of deficiencies in the Energy Secretariat's statistics
system to grasp the production and use of fuels of vegetable origin (wood, agroindustrial waste and
charcoal).
Imports of primary energy sources are scarcely relevant at present, accounting for less than 4% of
the country's domestic gross supply. On the other hand, the net balance of the foreign trade of crude
reached about 37% of the domestic production in 1995, tripling the sale of petroleum products abroad.
To that date exports had not enhanced Natural Gas production, a situation that changed in 1997 when
two gas pipeline to Chile became operational and could increase even more when other export
projects materialize.
Electric power plants act as a crossroad between various energy chains, as all the products
represented are their input and they constitute the major intermediate use of energy offered. Petroleum
products used in electric power plants are presently quite low (7% of total inputs) versus natural gas
(42%) and hydraulic energy (39%). Gas' low relative price when compared to petroleum products is
restraining the use of the latter solely to cases of gas supply shortages, either seasonal or permanent.
A totally different situation is that of end-use energy consumption, in line with energy for the
different socio-economic sectors. In this case, petroleum products supply 50% of the demand and
Resumen Ejecutivo
XIX
natural gas one third. Petroleum products are mainly used for transport and agricultural machinery,
while industries, trade and families have substituted petroleum products almost totally for natural gas
in thermal uses. Consequently, and unless the natural gas substitution process evidenced in the past
in such sectors reverses in future, the petroleum products' domestic market shall be essentially
defined by the evolution of the transport sector and to a lesser extent by the mechanization of
agriculture.
The State reform, launched in 1980, resulted in a substantial change in the institutional structure
and the regulation of all energy-related activities, which evidenced different features depending on the
energy chain. In general same were characterized by a transfer of the ownership right (privatization),
establishing new regulatory frameworks and deregulation of one or more segments of the various
production chains.
The supervision and general regulation of the electricity and gas industries is the responsibility of
Federal Regulatory Agencies, established by law in the scope of the SE as autonomous bodies.
The crude production increase geared a 33% natural gas production growth between 1990 and
1995, slightly higher than the gas' domestic demand rise (30%) which was offset by means of a
reduction of imports from Bolivia.
Oil companies' interest in expanding their activities in the country is clearly evidenced by an
ongoing search for new markets to sell their production.
Generation in the electricity industry has also been very active since 1992. After the reform about
3400 effective MW were installed in 3 years -1/3 of the maximum load recorded in 1995- increasing
reserves to 57% of the maximum capacity demand. However, 61% of the capacity added was from
hydroelectric plants already under construction with public funds before the reform. However, the
investments made by private players focussed totally on natural gas-based thermal generation. Such
process is leading the electricity industry to a growing natural gas dependence, regarding both
availability and price.
The government has driven increases in hydrocarbons' production, especially oil, without
substantial restrictions on domestic oil uses. Should the country's low reserve horizon persist it could
result in reviewing such policy, particularly affecting exports.
The environmental context
The Argentine public perception relative to environmental problems is changing fast. Toxic waste
management, soil degradation and streams' pollution are more often an issue of public concern. On
the contrary, air quality does not seem to rouse general concern, except for toxic compounds
concentration in downtown Buenos Aires. The public opinion seems to be less concerned by GHG
emission, although a growing interest can be noted regarding climate change potential effects.
As expected, the Inventory shows CO₂ emission's clear preeminence over the remaining GHG from
energy production and consumption. Although the energy system's CO₂ emissions evidence an
upward trend values are still very low when compared to industrialized countries' indicators.
Presently, 70% of CO₂ emission come from final energy consumption whereas the remaining 30%
is accounted for by energy supply-related activities. The Transport sector is not only responsible for
32% of total emission, but its consumption pattern largely contributes to total emission evolution. The
industry and buildings' energy consumption, despite an almost 16% contribution to total emission
each, have a moderate impact due to the high natural gas share in their energy consumption.
As for the environmental efficiency of the Argentine energy system, the following graph illustrates
CO₂ evolution per energy unit supplied.
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Estudio de Mitigación de Gases de Efecto Invernadero
Evolution of CO2 specific emission
70
65
60
55
Gg Gg CO₂/PJ
50
45
40
35
30
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
Total
Final Consumption
Supply
As seen, the amount of CO₂ emitted from each PentaJoule supplied shows a very clear trend. Total
specific emission decreased persistently throughout the whole period being today 25% lower than in
1970.
It can be stated that the Argentine energy system has reached a degree of development such that
in future an important effort shall be required to dampen the effects of economic growth on CO₂ total
emission.
3. Methodological aspects
Following the guidelines set forth by the World Environment Fund (Fondo Mundial para el Medio
Ambiente) (FMAM) for climate change mitigation studies, two future scenarios of the system under
analysis are developed. One of them (Base Scenario) refers to. the evolution expected given the
system's present dynamics, without resorting to actions or explicit policies to abate greenhouse gases'
(GHG) emission or to increase greenhouse gases (GHG) absorption capacity. The second (Mitigation
Scenario) on the other hand, involves selecting a set of climate change mitigation options, to evaluate
the benefits derived from its implementation.
The formulation of scenarios is based on a Diagnosis allowing to understand the relations between
economy-energy and energy-environment, as well as the economic performance and the energy
system's behavior, analyzed in the present study. The impact on atmospheric GHG accumulation is
also studied. After the Diagnostic stage and prior to formulating the Mitigation Scenario, mitigation
options available in the sectors under analysis are identified and characterized.
Resumen Ejecutivo
XXI
In the case of the Base Scenario, efforts were made to reproduce business strategies as closely as
possible in the context of the development expected in the Argentine socio-economic system,
resorting to the experience acquired since energy deregulation. To formulate the Mitigation Scenario
the options available in the industry, transport and energy industries themselves were analyzed,
selecting first those considered easier to implement although the objective was to include enough
industries so that the country's mitigation potential could be assessed.
Based on these hypotheses, the energy system's detailed operation is analyzed in both Scenarios
controlling energy flows' consistency, from reserves to consumption, using the LEAP model (Long-
range Energy Alternatives Planning System) developed by the Stockholm Environment Institute
Boston Center at the Tellus Institute.
LEAP is a simulation model that contains 6 modules and an environmental data base used to
calculate environmental impacts associated to the energy system's expected evolution. The purpose
of the 6 modules is to analyze: Demand, Biomass, Environment, Scenario Assessment, Results'
Aggregation.
On the basis of a data base generated specifically on the basis of emission coefficients adopted in
the Report on GHG Emission Inventory in Argentina, the LEAP supplied the GHG emissions
compatible with those calculated in the Inventory Study for 1990 and 1994.
4. Developing scenarios
The International Context
In the face of a growing globalization process, the Argentine situation evolution will largely depend
on the international context. Such dependence becomes evident at different levels, of which the
economic, technologic and energy-environmental are the ones relevant to this study.
Economic aspect
The globalization process shall require central economies to further adjust, especially in Europe.
However, after the adjustments made since the beginning of the eighties, global growth is expected to
be slow albeit steady in the long term, although more moderate consumption patterns shall be
adopted.
The geographic displacement of production towards less developed countries, geared by
globalization, will not necessarily cause recession in the central economies due to the development of
other activities in the service area, the existence of positive financial flows and the control of
technology resulting from the corporate ownership structure at international level. However,
unemployment may generate substantial changes in consumption and labour patterns that could
impact other regions as well.
Industrialized countries shall gradually eliminate subsidies and tariff barriers imposed on certain
raw materials originating in developing countries, especially Latin America. However, the greater
potential for trading agricultural products shall derive from global economic growth.
It is assumed that the international financial market shall be more stable, leading to more
advantageous funding rates and terms. Conditions for foreign debt repayment shall also improve.
The following are the long-term economic growth hypotheses:
XXII
Estudio de Mitigación de Gases de Efecto Invernadero
Rate Period 1995/2030
Region
1995/2005
2005/2030
1995/2030
Africa
3.0%
2.2%
2.4%
Asia (PVD)
6.5%
5.6%
5.9%
E. Europe
4.3%
3.7%
3.9%
M. East
2.5%
3.2%
3.0%
L.America
3.8%
3.9%
3.9%
Japan
2.5%
1.9%
2.1%
Europe
2.5%
2.0%
2.1%
USA+Canada
2,5%
2.2%
2.3%
TOTAL
3.0%
2.8%
2.8%
Technological aspect
Future technological development is part of the international context in which developing countries
(PVD) act as "technology takers". The PVD will only differ on the basis of the advantages and
obstacles posed to the penetration of new energy technologies and to the production of goods and
services, as a function of their strategies to join international markets.
Based on the Workshop "Technological Innovation in the use of energy", attempts were made at
establishing a clearer framework on future technological expectations. The results were extremely useful
to elucidate international efforts in the development and introduction of new technologies. The conclusion
drawn was that the international research dynamics and the introduction of new technologies evidence
a fast development and are fuelled by economic factors and environmental concerns.
It has been assumed that the technologies available in the international field in the next 30 years
shall not be notoriously affected by the position of industrialized countries' governments with respect
to climate change.
Energy-environmental aspects
International energy markets perspectives shall strongly depend on the international attitude vis-a-
vis environmental concerns.
Although the international community is rapidly becoming aware of the fragility of the environment
and the dangers of its ongoing degradation, effective environmental protection involves very deep
changes in consumption patterns and in present economic organization standards, difficult to
implement in the current political and economic context. A proof of this is the obvious difficulty to reach
an agreement on governments commitments to abate GHG emissions.
In spite of the uncertainty on GHG reduction margins and the terms that will finally be agreed to
attain such levels, the PVD will be strongly affected by such process. Regardless of the commitments
industrialized countries may locally undertake, pressure shall be exerted on the PVD for them to
contribute to climate change mitigation. In such sense restrictions shall be imposed on their products
in both industrialized countries' and financial markets, based on environmental considerations.
As regards the evolution of energy products' international markets and in spite of the fact that oil's
share in primary energy supply has decreased, its price still is a benchmark for energy, given its
relative importance compared to primary energy sources, the fact that it is a tradable good and also a
fuel substituting for other sources.
Resumen Ejecutivo
XXIII
In the context of OPEC's loss of power, the European Union's steady import percentages and
increased levels by the U.S. and China, Russia's production upkeep and increases in Great Britain's
and Norway's supply, a certain stability is forecast for the price of crude oil with a slightly upward trend,
especially after 2010. Crude oil international prices act as benchmark to define the evolution of
petroleum products and gas' domestic prices.
Domestic socio-economic context
The socio-economic scenario assumes as a starting point that the growth of regional blocks shall
basically depend on a greater opening of Northern developed countries' markets to PVD products.
At a regional level, the agreements signed within the MERCOSUR shall help stabilize national
economies and lead to a search for more coordinated solutions among countries. In turn, countries'
stability shall become a key issue for the success of MERCOSUR. The integration process will not
only increase exchange but also result in greater sectoral complementation and increased
competitiveness.
Argentina will mostly be geared to agroindustries and mining, which involve activities that rely on
and impact different chains. Significant impact will result from investments in the Agro-industries,
Mining and complementary investments in these sectors, many of which have a strong environmental
impact.
Growing specialization is seen in sectors devoted to the processing of natural resources, be they
traditional or industrial commodities (non-mineral oils, iron and steel industry, petrochemicals, natural
gas, aluminum, fish flour, etc) whose plants have undergone strong restructuring to approach
international efficiency levels, although in some cases, with noticeably lower production scales.
As for the exporting profile, all indicators seem to prove that major items will closely relate to the
production of gas, minerals, fuels and commodities in general, with a low added value.
Long-term growth of the GDP
Interannual growth rates and GDP values by sector in 10⁶ USS of 1994
GDP
a. rate
GDP
a. rate
GDP
a. rate
GDP
a. rate
GDP
1995
1995-05
2005
2005-10
2010
2010-20
2020
2020-30
2030
Agro-industries
21975
4.4%
33729
7.5%
48410
5.5%
82713
5.5%
141288
Mining
6953
3.1%
9434
8.0%
13863
7.0%
27261
6.0%
48831
Industry
71874
3.8%
104597
5.0%
133493
5.2%
221609
4.5%
344162
EE, GD & Water
5705
3.8%
8261
4.8%
10453
4.0%
15458
4.0%
22876
Construction
15155
4.1%
22722
4.5%
28324
3.8%
41124
4.5%
63845
Commerce
46535
5.2%
77158
4.8%
97528
3.8%
141620
4.2%
213703
Trans. y Comm.
13907
5.1%
22921
5.4%
29808
4.5%
46306
5.0%
75427
Finances
41877
4.1%
62386
4.2%
76623
4.0%
113429
3.8%
164718
Services
45108
2.9%
59773
4.0%
72726
3.2%
99654
3.5%
140557
TOTAL
269089
4.1%
400981
5.0%
511228
4.4%
789174
4.4%
1215407
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Estudio de Mitigación de Gases de Efecto Invernadero
As a result of the assumptions relating to the long term growth path, the production structure would
tend to concentrate in goods producing sectors, while service sectors would decrease in relative
terms.
From the production standpoint the most salient feature shall be a relative reprimarization of the
economy. However, such trend would be offset by the industry's relative consolidation. Argentina
would thus grow above the region's average, at rates however close to those forecast for the region.
On the other hand, trade would benefit in the long term from a favorable ratio in the prices of
primary export products and the high added value of agroindustrial exports.
5. Results expected in the Base Scenario
The evolution of energy consumption
This scenario assumes that government intervention in future energy markets shall not place
barriers to private businesses, devoting only to the implementation of policies aimed at: controlling
competition levels in domestic energy markets, promoting the creation of regional energy markets on
competitive bases, guarantying future energy supply, enhancing energy efficiency.
It is assumed that energy supply follows the trend in which energy efficiency exhibits a dynamic
behavior, where improvements occur "naturally" without specific intervention.
Total final energy consumption
SOURCES
1995
1995
2005
2005
2010
2010
2020
2020
10⁶ Gj
%
106 Gj
%
106 Gj
%
106G
%
Hydrogen
16.59
0.4
Biomass & O. Prim.
94.05
5.2
129.93
5.4
162.03
5.3
250.11
5.4
Coals
3.58
0.2
4.80
0.2
5.88
0.2
9.09
0.2
Petroleum Products
700.90
38.9
805.14
33.4
978.11
32.2
1475.11
31.9
Electricity
200.92
11.1
324.03
13.4
416.40
13.7
634.25
13.7
Distributed Gas
660.75
36.7
956.21
39.7
1246.10
41.1
1924.19
41.6
GLP
59.24
3.3
69.18
2.9
75.86
2.5
91.84
2.0
Other Gases
26.77
1.5
41.67
1.7
50.63
1.7
69.46
1.5
Non-Energy
56.52
3.1
78.53
3.3
100.16
3.3
158.85
3.4
TOTAL
1802.73
100.0
2409.49
100.0
3035.17
100.0
4629.49
100.0
The annual cumulative growth rate between end years (1995/2020) reaches 3.8%.
Energy productivity evolves, measured on final consumption (GDP/Final Consumption), increasing
by 14% for 2020 compared to 1995 values.
Resumen Ejecutivo
XXV
Total final consumption increases by the following percentages compared to base year figures:
1995
2005
2010
2020
Base
+34%
+68%
+157%
There is a penetration of distributed gas which becomes the most important source, while
Petroleum Products, PLG and Other Gases lose ground and Electricity grows.
As for the share of various sectors, it should be pointed out that:
The most dynamic sector is Agriculture, Silviculture and Fishing, whose share increases 1.63 points
(27%) in 2020 with respect to the base year.
The industrial sector's relative importance increases 1.16 points (4.5%) in 2020.
The Residential, Commercial and Institutional and Own Consumption sectors' share drops.
The Transport sector's share slightly decreases, with a percentage above 28% it still remains a
higher final consumption sector.
Including supply-related data, considering that trends will remain stable in the electricity, gas and
oil industries, the following should be pointed out:
The major role of electricity generation, based on combined cycle thermal power plants (90% of
thermal generation).
The need to undertake very significant exploration efforts to meet the scenario's natural gas
requirements. Discoveries shall be kept at a pace implying the addition of 70000 million cubic meter
of gas a year to keep an adequate reserve horizon (8/9 years).
Crude oil's domestic production is assumed to plateau in 52 million cubic meter a year by the year
2002, a level that could be maintained until 2005. From such date, production would decline to reach
35 million cubic meter in the year 2020. Such crude oil production would be insufficient to meet the
needs of refineries which would then have to import one third of their requirements.
Primary energy consumption evolution implies an increase in natural gas' share, a drop in coal and
nuclear and a substantial loss in oil and petroleum products.
An increase in energy efficiency is also expected as a result of technological progress and the
growing need to sustain market competitiveness.
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Estudio de Mitigación de Gases de Efecto Invernadero
Energy intensity and per capita consumption
140
10000
9000
120
8000
100
7000
6000
GJ/inhab.
80
5000
60
4000
GJ/Millon U$S 1994
40
3000
2000
20
1000
0
0
1995
2005
2010
2020
Primary energy shab
Primary energy intensity
GHG Emissions
According to the GHG Emissions Inventory results, nitrous oxide (N₂O) emissions from the
Argentine energy system are clearly negligible, 0.2% of CO₂ emission, even considering that their
warming potential is equivalent to 320 fold that of CO₂. (1) Given that such ranges fall within
assessment errors, it has been decided not to measure future N₂O emission and restrict the analysis
to CO₂, CH₄, NOₓ and CO emissions for both scenarios.
Gas Type
Unit
Inventory
Mitigation study
1990
1994
1995
2005
2010
2020
CO₂
Gg
97402
109001
118190
143900
182620
281660
CH₄
Gg
371.8
474.9
35.0
61.1
108.4
203.1
NO,
Gg
535.9
619.2
684.1
839.3
1083.8
1731.5
CO
Gg
1510.7
1735.7
1752.9
1624.5
1813.1
2052.0
CO₂ Equiv.
132479
150611
151671
183842
234067
362052
(1) In order to compare various GHG volumes the following factors were adopted for heating potential
CH₄: 24.5 (Source UNEP-RISO)
N₂O: 320 (Source: UNEP-RISO)
NO₂: 40 (Source: IPCC)
CO: 3 (Source: IPCC)
Resumen Ejecutivo
XXVII
The most substantial energy system's emissions originate in carbon dioxide, although the growth of
methane emission shall be faster in future. In spite of its different growth pace, direct CO₂ emission
accounts for 78% of the total throughout the period, whereas methane would barely exceed 1% in the
horizon year.
The "environmental efficiency" of energy used by the whole energy system and various
coefficient. consumption sectors and/or energy supply-related activities can be measured by emission's specific
CO2 specific emission
75
70
65
60
CO₂PJ ga
55
50
45
40
35
30
1995
2000
2005
2010
2015
2020
Final sector C
Supply
As shown in the graph total specific emission would remain relatively stable throughout the whole
period under analysis. Such total specific emission's long term stability implies interrupting the historic
trend prevailing in the last 25 years affected by a 25% drop.
As for methane emissions, in spite of the expansive context of gas production and consumption, the
gas industry as a whole would increase its total methane emission by 12% throughout the period.
The evolution of NO emission will fundamentally rely on three sectors: transport, agriculture and
cattle breeding and electricity generation. The increase of conventional thermal generation, even
burning natural gas, would increase NOₓ emissions from electricity power plants at a pace higher than
that of the whole energy system.
As for CO, practically 99% of CO emission originates in final consumption sectors, although the
growth in emission from power plants will prompt a rise in energy supply-related activities' share which
will anyhow account for under 2% of the total in the horizon year.
XXVIII
Estudio de Mitigación de Gases de Efecto Invernadero
6. The Mitigation Scenario
From this study's perspective, the Argentine Mitigation Scenario only differs from the Base Scenario
to the extent it implies the implementation of options and actions to abate GHG emissions within its
territory. The electricity industries' organization and the operators' interest shall remain unchanged,
although development strategies should adapt to the new context outlined by official policies to
mitigate climate change.
The mitigation options
As it is the aim of this Scenario to take the best opportunities to decrease energy consumption and
therefore GHG emissions, it has been considered that regarding final consumption efforts should be
oriented to the transport and industrial sectors.
The Mitigation Scenario involves substantial changes in the transport policies, affecting the share
of various modes and means of transportation. As regards passenger transport, for instance, the
impact of new traffic measures has been evaluated, as well as the substitution of modes, sources, and
the enhancement of vehicle technology.
In such sense, traffic organization measures involve extending and improving the highway system,
expanding the railway and underground network, limiting private vehicles in certain city areas, among
others.
Mode substitution focuses in the increase of mass public transport to replace cars and the
substitution of trucks for trains as regards cargo transport.
Additionally, less emitting sources should also be promoted (CNG) and a decrease in the age of the
car fleet as a way to improve its mean specific consumption.
In the case of industry, actions focus on heating and mechanic uses, while the role of cogeneration
is also being considered. As for heating and mechanic uses, changes in processes are assumed, as
well as the partial replacement of equipment and general preservation measures.
As for supply-related activities special attention was given to electricity generation as it involves the
highest fuel consumption within the energy sector. In this case mitigation options cannot be based on
improving energy efficiency, considering the high future performance of conventional thermal stations.
Therefore the search aims at GHG emission-free technologies.
The effects of mitigation measures
The Industrial Sector
The hypotheses assumed on the possibility of undertaking mitigation actions in the industrial sector
by improving present equipments' efficiency, sources' substitution, incorporation of more efficient
technologies and processes brings about an impact that might be considered spectacular. The
difference between both scenarios is 24.7% in 2020. Of such savings, distributed gas accounts for
55% and electricity for 20%. The energy-intensive industry drops its consumption by 21.2% whereas
non-energy intensive industry decreases consumption by 29.5%, in both instances compared to base
scenario figures.
Resumen Ejecutivo
XXIX
Effects are illustrated in the following graph, which shows that the responsibility for lower
consumptions lies in distributed gas, electricity and other primary sources.
Accumulated Savings by Source
3000
2500
2000
10⁶ Gj
1500
1000
500
0
Coals
Other
Primary
Electricity
Distributed
Gas
Petroleum
Products
Other
Gases
Non-Energy
Products
Total
The Transport Sector
"Savings" accumulated as a result of greater efficiency amount to 1476 million Gj, i.e. 1.35 fold the
annual consumption projected for 2020, and close to three fold the base year consumption. The lower
consumption concentrates in diesel oil and gasolines, and to a lower degree in kerosene/JP.
Annual difference in fuel consumption
50
0
-50
10⁶ Gj
-100
-150
-200
-250
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
H
EE
GD
GASO
KE/JP
DO
FO
Considering highly emitting sources' lower consumption, the penetration of zero emission sources
such as electricity and hydrogen is achieved (at least at consumption level). Hydrogen's accrued
differential consumption is 113 10⁶ Gj and that of electricity 32 10⁶ Gj. Distributed gas (CNG) accounts
for 42 10⁶ Gj additionally accrued and fuel oil 8.61.
XXX
Estudio de Mitigación de Gases de Efecto Invernadero
The electricity supply sector
In spite of the lower growth rate of electricity requirements in this Scenario compared to the Base
Scenario, in coming years the pace of new power plants' incorporation is kept up, considering that the
decision to install most of them has already been made and they are already under construction. As
for the remaining ones, they represent operators' need to improve their market competitiveness.
In such situation it is possible to install about 5000 MW less than in the Base Scenario. The search
of GHG emission-free generation technologies implies not only savings in installed capacity but also
a radical change in the structure of added power plants.
Both Scenarios differ as regards the size and type of energy sources consumed in power plants. As
for structure, fossil fuels would progressively decrease their share and reach 54% of power plants'
total consumption in the year 2020, compared to 82% forecast in the Base Scenario.
Primary energy consumption
Considering the functioning conditions of the Mitigation Scenario, primary energy consumption
growth in the next 25 years would be equal to 2.9% accrued annual rate, becoming faster after the
year 2005 (3.5%).
The mitigation actions selected, especially in the electricity sector, imply greater diversification than
in the Base Scenario regarding primary sources' consumption.
Primary energy consumption
6000
5000
2010
4000
2005
PJ
3000
2000
1000
0
1995
Base
Mitigation
Base
Mitigation
Base
Mitigation
Oil &Petroleum Products
Natural Gas
Coal
Nuclear
Renewables
Biomass
In this case oil and petroleum products' loss of share (7% in the next 25 years, just like in the Base
Scenario) would be captured at the same pace by natural gas and renewable sources (3% each) and
to a lesser extent by nuclear fuel (1%). Although renewable sources include both hydro and wind
electricity and hydrogen, the strongest impact in terms of primary energy consumption lies in
hydroelectric power plants construction. Anyhow, natural gas shall still be the major primary source as
regards consumption, with a maximum 52% penetration in the horizon year.
Resumen Ejecutivo
XXXI
Mitigation actions' impact on the Argentine economy's energy intensity are clearly observed when
comparing the growth expected in both Scenarios. Primary energy consumption per GDP unit shall
decrease 30% by the end of the period, compared to present figures. This implies a 10 point reduction
above Base Scenario's forecasts.
It is interesting to point out that considering equal "energy service" supply in both Scenarios, per
capita primary energy consumption after mitigation actions shall be about 14% lower than the Base
Scenario forecasts for the year 2020. However, the fast growth rate assumed, together with
Argentina's low demographic growth rate would result in a clearly upward trend in the country's per
capita primary energy consumption.
GHG emissions
The expected evolution of the four gases under analysis in the Mitigation Scenario appears in the
next Chart, where values corresponding to the base year and the horizon year in the Base Scenario
were also included to facilitate the comparison between both Scenarios.
GHG Emissions in the Mitigation Scenario
(in Gg)
Gas Type
Units
Base
Mitigation Scenario
Base Scenario
Year
2005
2010
2020
2020
CO₂
Gg
118190
138440
161860
223780
281660
CH₄
Gg
35.0
61.1
113.4
199.6
203.1
NOₓ
Gg
684.1
824.1
1001.6
1463.4
1731.5
CO
Gg
1752.9
1622.9
1538.9
1437.5
2052.0
CO₂ Equiv.
151671
177767
209319
291517
362052
Compane
2010 BAU: 234067
Even if mitigation actions are implemented the true differences between both Scenarios shall
become more clearly evident after the year 2005. CO₂ total emission savings shall amount to 20700
Gg in the year 2010, rising to 58000 Gg in the horizon year. In terms of annual emissions expected in
the Base Scenario, such savings would imply 11% reduction in the year 2010 and almost 21% in 2020.
Total specific emissions would persist along a downward trend throughout the period under analysis,
with a 7% decrease compared to present values.
To overcome the analytic constraints posed by specific emission per energy unit used as an
indicator of environmental efficiency in the use of energy, the energy pathways and CO₂ emission
were calculated for both Scenarios.
The energy pathway graphically represents the variations in domestic economic activity's energy
intensity (energy offered per GDP unit) as a function of the economic system's evolution, measured
by the per capita GDP. A similar curve can be drawn for CO₂ emissions, i.e. the emissions pathway,
which represents the emissions' evolution per GDP unit as a result of changes recorded in the per
capita product.
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Estudio de Mitigación de Gases de Efecto Invernadero
Energy and CO₂ emission pathways
105
100
95
90
85
%
80
75
70
65
60
55
5000
7000
9000
11000
13000
15000
17000
GDP/inhab (U$S 1994)
Base Energy Intensity
-Base Emission Intensity
Mitigation Energy Intensity
Miligation Emission Intensity
Mitigation measures as a whole, would permit a reduction in the Argentine economy's energy
intensity in the next ten years, 3% above the 16% considered in the Base Scenario. It is important to
point out that such trends would materialize in an openly expansive economic activity, resulting in 30%
increase in present per capita product.
In the longer term their impact on energy intensity would increase, adding a reduction of over 10
points to the drop considered in the Base Scenario. Compared to present values, energy intensity in
the Mitigation Scenario would drop over 30% as a result of the combined effect of technological
innovation, structural adjustment and the promotion of a higher energy efficiency.
As for total methane emissions, same shall originate mainly in final energy consumption sectors. In
effect, future growth of CH₄ emissions shall be driven by the transport sector, whose share would
persistently grow, to reach slightly over 97% in the horizon year, compared to the present 95%, values
similar to those expected in the Base Scenario.
Differing from figures expected in the Base Scenario, the future evolution of NOₓ emission shall be defined
by two major sectors: transport and agriculture and cattle breeding, as the decrease in electricity generation
by thermal power stations would largely reduce the share of electricity power plants in NOₓ total emission.
The simultaneous decrease of NOₓ emission in electricity power plants and in transport as a result
of the decrease in the use of petroleum products, highlights the relevance of agriculture and cattle
breeding in NOx total emission in the Mitigation Scenario.
As for CO, mitigation measures in the transport sector shall result in a 34% reduction of the sectoral
emission expected in the Base Scenario for the year 2020. Given transport's high participation in CO
total emission, the global effect of such measures would be a persistent reduction of total CO volumes
emitted by the energy system, which in the horizon year shall reach only 82% of present volumes.