Country In Focus: Argentina

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Manning & Napier

Argentina is a country with plentiful natural resources, a well-educated labor force, and some of the highest income levels in Latin America. It has a rich, diverse culture and heritage, as well as a very turbulent past. Argentina's story essentially centers on the questions of "what" and "why." The former is less contentious, while the latter remains quite vexing. In terms of the "what," we know that from an economic standpoint, Argentina provides a rare example for the world's intellectuals of a country that has, over the course of a century, gone from being considered among the most developed to being categorized as a developing or emerging country. The investment community largely categorizes this as a frontier market, and it is also sometimes referred to as a pre-emerging market, along with the likes of Bangladesh, Pakistan, Nigeria, and Vietnam. It is probably safe to say that this group is not the company with which Argentines of 100 years ago would have aspired to be categorized.

The "why" part of Argentina's story is more hotly debated. Many in the academic world have spilled a great deal of ink attempting to explain the country's relative decline in living standards. Reasons offered include political instability and military coups, populism by successive governments, corruption, weak institutions, and inequality. The reality is that all of these factors most likely played a part in Argentina's relative stagnation and institutional weakness in recent decades. Identifying the cause and effect of the above factors is difficult, given the chicken-and-egg issues that arise and the confusion between correlation and causation. For example, did inequality lead to political instability, or was it the other way around? The waters only get muddier, and the tendency to conflate socioeconomic issues only increases as those with skin in the game attempt to weave a narrative that confirms their various agendas. Moreover, any relative analysis between countries over such a long period

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Manning & Napier (NYSE: MN) provides a broad range of investment solutions through separately managed accounts, mutual funds, and collective investment trust funds, as well as a variety of consultative services that complement our investment process. Founded in 1970, we offer equity and fixed income portfolios as well as a range of blended asset portfolios, such as life cycle funds, that use a mix of stocks and bonds. We serve a diversified client base of high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, endowments and foundations. For many of these clients, our relationship goes beyond investment management and includes customized solutions that address key issues and solve client-specific problems.

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