the biophysical performance of argentina (1970-2009)

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RESEARCH AND ANALYSIS The Biophysical Performance of Argentina (1970–2009) Pedro Luis Perez Manrique, Julien Brun, Ana Citlalic Gonz´ alez-Mart´ ınez, Mariana Walter, and Joan Mart´ ınez-Alier Summary The biophysical features of the Argentinean economy are examined using a social metabolism approach. A material flow analysis (MFA) for this economy was conducted for the period 1970–2009. Results show that Argentina follows a resource-intensive and export-oriented development model with a persistent physical trade deficit. Also, Argentina’s terms of trade (the average weight in tonnes of imports that can be purchased through the sale of 1 tonne of exports) show a declining trend in the period of study. Argentina’s economy shows a pattern typical of countries whose economies are based pri- marily on exports. Comparisons between Argentina’s metabolic profile and the metabolic profile of other countries in Latin America and of Australia and Spain show that the Argen- tinean economy presents the same pattern as other Latin American exporting economies, and its terms of trade are opposite to those of industrialized economies. Keywords: Argentina ecologically unequal exchange extractive economies industrial ecology material flow analysis (MFA) social metabolism Introduction World economic growth and trade liberalization in Latin America (which includes all of Central America and South America, from Mexico to Argentina) have generated a surge of commodity flows from this region to the rest of the world over the last 30 years. Argentina is one of the major South American economies. The country has increased its interna- tional trade based on a strong agricultural sector and a growing mining industry. In 2008 it was the fourth largest gold and fifth largest copper producer in Latin America in terms of mass out- put (USGS 2011), third largest producer of soybeans, and fifth largest producer of maize in the world (FAO 2010). Such eco- nomic performance has direct impacts on the environment. An increasing number of resource extraction conflicts have been reported (Binimelis et al. 2009; Svampa and Antonelli 2009). By using a social metabolism approach (Ayres and Si- monis 1994; Fischer-Kowalski 1998), biophysical patterns of Address correspondence to: Pedro Luis Perez Manrique, Institut de Ci` encies i Tecnologia Ambientals (ICTA), Universitat Aut` onoma de Barcelona, Edificio C, Campus de la UAB, 08193 Bellaterra, Barcelona, Spain. Email: [email protected] © 2013 by Yale University DOI: 10.1111/jiec.12027 Volume 00, Number 0 economies can be quantified. Social metabolism refers to the overall material and energy exchanges that occur between a society and its environment in order for the society to sustain itself or to grow. This article presents the metabolic profile of the Argen- tinean economy between 1970 and 2009 by means of an economy-wide material flow analysis (EW-MFA). EW-MFA is defined as “a consistent compilation of the overall mate- rial inputs into national economies, the material accumulation within the economic system and the material outputs to other economies or to the environment” (EUROSTAT 2001, 17) and provides a physical description of an economic system. This methodology includes accounting for input flows (biomass, fos- sil fuels, construction minerals, etc.) and output flows (exports, waste, pollutant emissions). A similar study based on international data sources was car- ried out by the Sustainable Europe Research Institute for the period 1980–2008 (SERI 2012). The results of that study and the study described in this article are consistent, with a small www.wileyonlinelibrary.com/journal/jie Journal of Industrial Ecology 1

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R E S E A R C H A N D A N A LYS I S

The Biophysical Performance of Argentina(1970–2009)Pedro Luis Perez Manrique, Julien Brun, Ana Citlalic Gonzalez-Martınez, Mariana Walter,and Joan Martınez-Alier

Summary

The biophysical features of the Argentinean economy are examined using a socialmetabolism approach. A material flow analysis (MFA) for this economy was conductedfor the period 1970–2009. Results show that Argentina follows a resource-intensiveand export-oriented development model with a persistent physical trade deficit. Also,Argentina’s terms of trade (the average weight in tonnes of imports that can be purchasedthrough the sale of 1 tonne of exports) show a declining trend in the period of study.Argentina’s economy shows a pattern typical of countries whose economies are based pri-marily on exports. Comparisons between Argentina’s metabolic profile and the metabolicprofile of other countries in Latin America and of Australia and Spain show that the Argen-tinean economy presents the same pattern as other Latin American exporting economies,and its terms of trade are opposite to those of industrialized economies.

Keywords:

Argentinaecologically unequal exchangeextractive economiesindustrial ecologymaterial flow analysis (MFA)social metabolism

Introduction

World economic growth and trade liberalization in LatinAmerica (which includes all of Central America and SouthAmerica, from Mexico to Argentina) have generated a surgeof commodity flows from this region to the rest of the worldover the last 30 years. Argentina is one of the major SouthAmerican economies. The country has increased its interna-tional trade based on a strong agricultural sector and a growingmining industry. In 2008 it was the fourth largest gold and fifthlargest copper producer in Latin America in terms of mass out-put (USGS 2011), third largest producer of soybeans, and fifthlargest producer of maize in the world (FAO 2010). Such eco-nomic performance has direct impacts on the environment. Anincreasing number of resource extraction conflicts have beenreported (Binimelis et al. 2009; Svampa and Antonelli 2009).

By using a social metabolism approach (Ayres and Si-monis 1994; Fischer-Kowalski 1998), biophysical patterns of

Address correspondence to: Pedro Luis Perez Manrique, Institut de Ciencies i Tecnologia Ambientals (ICTA), Universitat Autonoma de Barcelona, Edificio C, Campus dela UAB, 08193 Bellaterra, Barcelona, Spain. Email: [email protected]

© 2013 by Yale UniversityDOI: 10.1111/jiec.12027

Volume 00, Number 0

economies can be quantified. Social metabolism refers to theoverall material and energy exchanges that occur between asociety and its environment in order for the society to sustainitself or to grow.

This article presents the metabolic profile of the Argen-tinean economy between 1970 and 2009 by means of aneconomy-wide material flow analysis (EW-MFA). EW-MFAis defined as “a consistent compilation of the overall mate-rial inputs into national economies, the material accumulationwithin the economic system and the material outputs to othereconomies or to the environment” (EUROSTAT 2001, 17)and provides a physical description of an economic system. Thismethodology includes accounting for input flows (biomass, fos-sil fuels, construction minerals, etc.) and output flows (exports,waste, pollutant emissions).

A similar study based on international data sources was car-ried out by the Sustainable Europe Research Institute for theperiod 1980–2008 (SERI 2012). The results of that study andthe study described in this article are consistent, with a small

www.wileyonlinelibrary.com/journal/jie Journal of Industrial Ecology 1

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average difference in total domestic extraction of 13% per year.The novelty of our research lies in the length of the period ofstudy, 40 years, and the use of data sources from Argentina’snational government.

EW-MFA has been widely applied to most of the coun-tries that are members of the Organisation for EconomicCo-operation and Development (OECD), including Mexico(Gonzalez-Martınez and Schandl 2008) and Chile (Giljum2004). Recent studies have also been conducted for Peru,Ecuador, Colombia, and Brazil (Eisenmenger et al. 2007; Russiet al. 2008; Vallejo 2010; Vallejo et al. 2011). These analysesdescribe the metabolic profile of peripheral economies over longperiods and help to explain the socioecological implications oftheir trade patterns.

Argentina is the third largest Latin American economy (af-ter Brazil and Mexico), and has a long history of natural resourceexploitation. In addition, this country has experienced severalcrises and structural changes during the past 40 years, with ef-fects on the biophysical structure of its economy. In the currentinternational economic turmoil, it is one of the countries thatis experiencing economic growth.

This article is structured in six sections, beginning with thisintroduction, which is followed by a description of the MFAmethodology that was used and the economic history of Ar-gentina over the past 4 decades. The results from an analysisof main material flow indicators such as domestic extraction(DE), physical imports (M), and exports (X) and their derivedindicators are described in the fourth section, along with a com-parison to similar studies carried out for Spain, Australia, andother Latin American countries. Following this, the question ofthe consequences of terms of trade on the integration of LatinAmerican countries into the global economy is addressed, andconclusions are presented.

The comparison with Spain is motivated by two factors.First, in the past these two countries shared the same level ofwealth. For instance, in 1970 gross domestic product (GDP)per capita (constant U.S. dollars [$US], base year 2000) in Ar-gentina was 11.7% higher than in Spain. However, in 2009,the per capita GDP of Spain was three times higher thanthat in Argentina, although at present Argentina’s GDP isgrowing fast while Spain stagnates (following the end of thebuilding boom). Second, their strategies for integrating intothe world economy have diverged. Spain is a typical Europeannet importer of natural resources, in physical terms, whereasArgentina is a large net exporter. Their populations are alsosimilar in size. The population of Spain was 33.8 million in-habitants in 1970 and 46 million in 2009, while Argentinaincreased from 24 million to 40.1 million over the same time(INDEC 2011a; INE 2011). Spain’s population density, how-ever, is five times higher than that of Argentina. In conclusion,Spain was quite similar to Argentina in some respects in 1970,but their development has diverged since then. It is thereforeinteresting to compare whether the metabolic profiles of thesetwo countries have diverged as well, and in which respects theydiffer.

Methodology and Sources

This biophysical analysis of Argentina’s economy as pre-sented in this article takes a social metabolism approach, as usedto analyze the physical base of socioeconomic systems in thefields of ecological economics and industrial ecology (Schandland Schulz 2002). Based on the material balance principle, allmaterials that enter into the economic system must be equal tomaterial outputs plus material accumulation in the system. Theflow of materials into the system allows the construction andmaintenance of “the system’s material compartments” (stocks).In this sense, all the materials required to maintain these ma-terial compartments are considered essential for the system’sperformance (Fischer-Kowalski et al. 2011).

This article focuses on the input side of EW-MFA by tak-ing all the materials that enter into the national economy intoaccount, except for water and air. Only direct flows—the partof domestic extraction that was put to use and the total massof imported and exported commodities via foreign trade—wereconsidered (Fischer-Kowalski et al. 2011). We also provide in-formation about the physical dimension of foreign trade. Wedefine terms of trade as the average weight of imports (intonnes) that can be purchased through the sale of one tonne ofexports.1

Three basic flows are measured: domestic extraction (DE),which is the weight of harvested or extracted materials in thenational territory that enter the production process, physicalimports (M), and exports (X). These three basic flows are usedto construct three main macro indicators, as defined by EURO-STAT (2001):

Direct material input (DMI = DE + M) accounts for totalinputs flowing into a national economy.

Domestic material consumption (DMC = DMI – X) ac-counts for all materials used domestically (EUROSTAT2001, 38). DMC includes the accumulation of materialin the nation’s stocks, but does not include consumptionof materials recycled within Argentina.

Physical trade balance (PTB = M – X) represents the netphysical flow through national borders. It is the physicalequivalent of the monetary trade balance (MTB = exportvalue – import value).

Money and goods move in opposite directions in economies,which is the reason for the inverse order of imports and exportsin the above equations.

Table 1 presents the main material groups analyzed (i.e.,biomass, minerals, and fossil fuels) and the sources of data usedto analyze domestic extraction. For each flow we calculated theannual amount in tonnes of raw materials extracted from thenational territory to be used as material factors in the economicsystem. Official national statistics were used where possible,otherwise international sources were used.

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Table 1 Domestic extraction categories and sources

Category Subcategory Description Data sources

Biomass (biologicalmaterial used by humansand livestock)

Primary crops Cereals, roots and tubers, pulses, oil crops,vegetables, fruits, tree nuts, and other crops(stimulants, sugar cane, spices, and flowers)

FAO (2010), MAGyP (2011)

Forage Crops destined to produce forage and silage forlivestock feeding

FAO (2010), MAGyP (2011)

Grazed biomass Demand for forage of livestock units Annual livestock and permanentpasture data: FAO (2010)

Permanent pasture or grassesproductivity: FAO (2010)

Organic matter demandestimation: Weisz et al. (2007)

By-products of Crop residues of sugar cane and cereals used as FAO (2010), MAGyP (2011)harvest forage for livestock Straw coefficients: Wirsenius

(2000)Fishing Captures of fish, crustaceans, mollusks, and

aquatic invertebratesFAO (2010)

Forestry Wood harvested from forests, plantations, oragricultural lands: fuel wood, roundwood andwood roughly prepared

FAO (2010)

Minerals Metal ores Metal ores production measured as gross ore SMRA (1993, 2011), USGS(2011)

Industrialminerals

Minerals for industrial use SMRA (1993, 2011)

Construction Sand and gravel used for concrete and other SMRA (1993, 2011)minerals building materials Cement production statistics:

USGS (2011)Fossil fuels Production of coal, oil, natural gas and other

fossil fuelsIEA (2010), SERA (2000,

2011), SMRA (1993, 2011)

Source: Adapted from Gonzalez-Martınez (2008).

Methodology and Sources for Material Flow Analysisof Biomass

Fodder for livestock, which is a major flow in Argentina,is not fully accounted for in official statistics. This flow con-sists of three subcategories: forage, by-products, and grazing.Forage comprises the primary crops used for feeding animals.By-products are the by-products of crop harvest used as fodder,such as fodder beet leaves or sugar beet leaves. Grazing is thegrass uptake from pastures. Forage data were taken from theUnited Nations Food and Agriculture Organization database(FAO 2010) and national sources (MAGyP 2011). By-productswere calculated by applying conversion factors developed forLatin America by Wirsenius (2000) to agricultural harvest datafrom FAO (2010) and national sources (MAGyP 2011).

To estimate grazing, we calculated potential supply and de-mand for animal fodder from permanent pastures, using thelower value as suggested by EUROSTAT (2002). This proce-dure avoids the overestimation of grazing. Potential supply wasestimated by multiplying areas of permanent pasture by the an-nual yield coefficients provided by the FAO (2010). Potentialdemand was calculated as average feed demand (measured inmass unit) by type of livestock (Weisz et al. 2007), multipliedby annual livestock figures (FAO 2010) and deducting previ-

ously estimated amounts of forage and by-products. Calculateddemand was lower than estimated biomass supply from graz-ing land, hence we calculated grazed biomass as the differencebetween calculated roughage demand and available feed fromcrop residues and forage.

For animal DE (i.e., hunting, fishing), only biomass extrac-tion from fishing was considered since data on hunting were notavailable. However, hunting is expected to be a relatively smallfraction of the total biomass flow.

Methodology and Sources for Material Flow Analysisof Minerals

Concerning metal ores, national statistics provide the mosthomogeneous data in terms of the mass of the metallic content(SMRA 1993, 2011). However, EW-MFA accounts for themass of extracted ores (or run of mine), hence we estimatedthis figure by using the average metallic contents of major localdeposits based on the annual reports prepared by the mainmining companies, the U.S. Geological Survey (USGS) annualcommodity report, and USGS mineral commodity profiles.

Extraction of sand and gravel, which represent the mainflows in the category of construction materials, are not well

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Figure 1 Argentina population, gross domestic product (GDP), and GDP per capita (1970–2009). GDP is in U.S. dollars (constant, base2000).Source: Own elaboration based on World Bank (2011).

reported (Bringezu and Schutz 2001; EUROSTAT 2002), re-quiring indirect estimations. We applied a method that cor-relates the extraction of sand and gravel with the productionof cement. According to Krausmann and colleagues (2009),6.5 tonnes of sand, gravel, and filling material are needed for1 tonne of domestically produced cement. Long-term cementproduction figures were sourced from the USGS mineral year-book (USGS 2011). National extraction accounts were avail-able for other construction minerals.

Methodology and Sources for Material Flow Analysisof Foreign Trade

For monetary and physical trade figures we used the com-modity trade database (COMTRADE) of the United NationsStatistics Division, following the SITC revised 2 classification(UNSD 2009).

Argentina’s Economic Overview

Changes in Argentina’s GDP fell into four different stagesduring the period of study (see figure 1). The first period, labeledA in figure 1, lasted from 1970 to 1990, and was a turbulentperiod marked by political and economic instability with GDPand per capita GDP annual growth rates averaging 0.82% and–0.7%, respectively. The period labeled B in figure 1, whichlasted from 1991 to 1998, was a period of GDP growth driven byliberalization policies. During these years the average GDP andper capita GDP growth rates were 6.3% and 5%, respectively.During period C, which lasted from 1998 to 2002, Argentinaexperienced a social and economic crisis that led to devaluationof the national currency. Finally, during period D, which lastedfrom 2003 to 2009, a strong GDP growth phase was fostered bythe expansion of commodity exports. During this period averageannual growth rates for GDP and per capita GDP were 7.3%and 6.3%, respectively. Each of these periods is discussed inmore detail below.

1970–1990: A Period of Political Instability

1970–1975: Import Substitution IndustrializationPoliciesBetween 1930 and 1975, macroeconomic policies were based

on the development of industries that would make substitutesfor the goods that Argentina imported (import substitution in-dustrialization [ISI] policies). Industry development focused onthe domestic market and a strong protectionist scheme wasadopted with strict import restrictions and high tariff levels.The government played a key role via subsidies, loans, andservice provision.

During the period 1970–1975 (labeled A1 in figure 1),ISI policies fostered economic growth; however, the structuralproblem of restricted access to capital persisted, resulting in adomestic industry based on the production of low value-addedproducts. Moreover, ISI measures fostered inflation and a neg-ative monetary trade balance, as the model initially requiredforeign capital and imports of intermediate goods. Furthermore,the government discouraged the export sector by taxing agricul-tural exports, widening the monetary trade imbalance–whichultimately was solved through inflation. In 1972 the inflationrate was 90% and in 1975 a new inflation crisis occurred withan annual inflation rate of 566% (Gorosito et al. 1998).

1976–1983: Neoliberal PoliciesIn March 1976, armed forces took power. The dictator-

ship implemented neoliberal economic policies, as already inpractice by force in Chile and Uruguay. The main economicmeasures implemented were the abolition of ISI policies, theopening of trade, and economic liberalization. Ramos (1986)and Treber (1987) underline that although neoliberal policiesreduced inflation and boosted exports, they were unsuccessfulregarding growth. As shown in section A2 of figure 1, the aver-age GDP growth rate was 0.5% between 1976 and 1983.

1983–1990: The Democratic TransitionThe military government collapsed in 1982 after losing the

Malvinas War (also known as the Falklands War) against the

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United Kingdom. In 1983 Raul Alfonsın won free elections,initiating the democratic transition. He promoted new importsubstitution measures as an alternative to the failed economicliberalization experience (ECLAC 1984). However, economiccrisis reappeared in 1989. Inflation reached its peak in July 1989(197% monthly rate), generating economic chaos and a newcollapse of the closed-economy approach. This stage is labeledA3 in figure 1.

1991–1998: Economic Growth (the Age ofConvertibility)

The arrival of Carlos Menem to the presidency in May 1989and approval of the Convertibility Law, which took effect on1 April 1991, marked a new stage in Argentina’s economichistory. This stage is labeled B in figure 1.

The “convertibility plan” led to a change in relative pricesin the economy. The monetary policy was defined by a peso–dollar fixed parity that subordinated the national economy tothe monetary policy of the U.S. Federal Reserve (Giletta 2005).The new strength of the peso allowed the payment of dollarizeddebts, in particular those of the heavily indebted agriculturalsector, which was able to restore its profitability, overcoming aperiod characterized by low international prices (Peretti 2006).

The key word of this period was “re-primarization,” mean-ing an emphasis on the extractive industries, mainly biomassextraction. Specialization of the Argentinean production sys-tem was based mainly on the use of “old” (agricultural re-sources) and “new” natural advantages (hydrocarbon and metalresources), and also in the development of consumer-orientedhigh-income services (property, commercial, financial, educa-tion, and health) (Heymann 2006).

The increased international prices of exported goods im-proved the general economic conditions. The supply ofexportable goods grew, with a significant boost in grainproduction—between 1997 and 1998 the harvest increased by70%. Measured in monetary terms, exports more than doubledbetween 1993 and 1998 (Heymann 2006). Moreover, in 1996Argentina approved the use of genetically modified soybeans,encouraging the expansion of this crop onto newly cultivatedland.

1998–2002: Financial Crisis

In this period, Argentina’s economy went into recession,with a deep financial crisis and a shortage of foreign currency(JEC 2003). In December 2001 the national currency was de-valued. This was caused by the removal of external financingmechanisms for the convertible peso. From 1991 to 2003 ex-ternal debt rose from US$61 billion to US$145 billion dollars.Moreover, during these years international prices for the mainexported products fell, the dollar appreciated, and one maintrading partner of Argentina–Brazil–faced strong currency de-valuation. These years were also characterized by increasingsocial unrest and high unemployment rates (Giletta 2005). Asshown in section C of figure 1, GDP declined more than 8% per

year between 1998 and 2001, mainly due to a domestic demandcontraction of –12% (Bugna and Porta 2007).

2003–2009: A New Growth Phase

This period, labeled D in figure 1, was marked by pronouncedgrowth in primary commodity exports. Indeed, improvement ininternational commodity prices (Giletta 2005) and devalua-tion of the peso boosted the agricultural and mining sectors. Inthis period Argentina’s economy experienced rapid growth. Be-tween 2003 and 2008, average annual GDP growth was 8.4%.In 2009 the economy grew by only 0.9%, affected by the inter-national financial crisis (INDEC 2011b).

Results and Discussion

The metabolic profile of Argentina is analyzed here on thebasis of three material flow indicators: direct material input(DMI), domestic material consumption (DMC), and physicaltrade balance (PTB). In addition, terms of trade describes theposition of a country regarding international trade relations.Dematerialization trends can be compared by using indicatorsof material intensity, which relate material use to populationand income (GDP/capita/year) (Fischer-Kowalski and Haberl1997; Krausmann et al. 2007).

Metabolic profiles are defined by patterns and levels of ma-terial use. This concept can be useful in understanding so-cioecological transitions from agrarian to industrial regimeswith different energy and materials use (Fischer-Kowalski andHaberl 2007, 1997; de Vries and Goudsblom 2002). Argentina’smetabolic profile is very different from that of industrializedcountries, although in terms of income per capita the countryrates quite well—it is an upper middle income country (grossnational income [GNI] for 2010 US$10,443) according to theWorld Bank (2011).

Extraction of Materials in Argentina

DE considers the materials extracted from the environ-ment within the borders of an economy, providing a pictureof the intensity of natural resources extraction. With a terri-tory of 2,736,690 square kilometers (km2),2 Argentina is thesecond largest country in South America, more than five timeslarger than Spain, with a large agricultural region (the Pam-pas) with fertile soils and a favorable climate, and has one ofthe lowest population densities in the region (on average, 12inhabitants/km2 between 1970 and 2009) (World Bank 2011).

Figure 2 shows DE from 1970 to 2009 by material compo-nent. During the period studied, DE grew at an annual averagerate of 1.46%, going from 386 million tonnes in 1970 to 660 mil-lion tonnes in 2009. This growth rate was barely faster than thepopulation growth rate (1.33%) and not as fast as GDP (2.56%,in constant U.S. dollars, base year 2000). The driving forcebehind this increase in DE was not population growth, but theincrease in agricultural and mining exports.

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Figure 2 Domestic extraction of Argentina (1970–2009).Source: Own elaboration based on data from FAO (2010), IEA (2010), MAGyP (2011), SERA (2000, 2011), SMRA (1993, 2011), and USGS(2011).

In per capita terms, DE increased from 16.14 tonnes/capitain 1970 to 16.46 tonnes/capita in 2009. Argentina presentshigher values of DE per capita than most other economies inthe region. For instance, from 1970 to 2007 Colombia had anaverage DE of 8.3 tonnes/capita (Vallejo et al. 2011) and whileEcuador’s was 7.4 tonnes/capita (Vallejo 2010). Spain, withan economy based on construction activities, had an averageDE of 11 tonnes/capita for the period 1980–2004 (Gonzalez-Martınez et al. 2010), reaching 20 tonnes/capita at the peak ofthe building bubble in 2007 (Gonzalez-Martınez et al. 2012).

Extraction of BiomassBiomass is the predominant DE flow with a 70% average

share. Figure 3 shows that the DE flow of biomass is composedof 71% fodder for livestock (forage, silage, grazing, and by-products), 2% fishing and forestry biomass, and 27% crops.

From 1997 to 2009, biomass extraction from primary cropsincreased from 50 million tonnes to 137 million tonnes. In thisperiod the annual growth rate of primary crops in per capitaterms was 2%, higher than the population growth rate. In con-trast, per capita biomass DE showed a decreasing trend of –0.46% on average during the period of study. The decline in percapita biomass extraction was due to a reduction in the amountof biomass grazed by livestock, while primary crop productionper capita increased.

Soybeans comprise the predominant flow in primary crops.According to Pengue (2001), soybeans have displaced otherdomestically produced crops such as cereals, roots, tubers, veg-etables, and melons. Indeed, during the period of study, thesecrops decreased in primary crops extraction from 44% to 25%for cereals, from 6% to 2% for roots and tubers, and from 5% to2% for vegetables and melons.

From 1970 to 2009 soybean production increased from26,000 tonnes to 30.9 million tonnes. This growth was driven

by high international prices for this commodity from the 1990sonward and by technological factors such as agricultural mecha-nization, the introduction of transgenic soybeans, and chemicalweeding with glyphosate (Teubal 2006). Since the introduc-tion of genetically modified soybeans in 1996 in Argentina,this crop has represented an average of 26% of all primarycrops.

The increase in crop production led to expansion of theagricultural frontier, clearing land and forest, as well as thedisplacement of indigenous and rural communities. Sincethe 1990s, Argentina has experienced one of the largest pro-cesses of deforestation in the history of the country (UMSEF2007). This entails new issues such as the weakening of foodsecurity, as crops are mainly exported and the production oflocally consumed crops is decreasing. The increasing use ofagrochemicals produces water, air, and soil pollution as well ashealth impacts on the surrounding populations (Binimelis et al.2009). The harvested area of soybeans increased from 38,000hectares (ha) in 1970 to 18 million ha in 2009,3 accounting formore than half of the total agricultural land (MAGyP 2011).

The predominant biomass flow in Argentina’s economy isstill grazing, forage, silage, and by-products. Nevertheless, a de-creasing annual average trend of –1.15% was observed duringthe period of study. The expansion of soybean crops decreasedthe land available for cattle grazing. Millions of hectares thatwere in agricultural–cattle rotation have been allocated to per-manent agriculture, while livestock increasingly depends onfeed crops (cereal, soymeal) (PEA2 2010; Santarcangelo andFal 2009).

Extraction of Metal OresBetween 1970 and 2009 the DE of ores increased in mass

by a factor of 27. This increase was mainly driven by improv-ing international prices, the approval of laws and regulations

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Figure 3 Biomass domestic extraction of Argentina (1970–2009).Source: Own elaboration based on data from FAO (2010) and MAGyP (2011).

aimed at facilitating mining activities and foreign investmentsduring the 1990s, and the availability of new technologies mak-ing the exploitation of deposits of lower ore quality and metalconcentration feasible.

Between 1997 and 1998 the DE of ores increased from9.6 million tonnes to 34.4 million tonnes. Between 1997 and2009 the main ores mined were gold, copper, silver, and in-creasingly lithium. The growth in metal ore extraction has beendriven by the opening of three mining projects since 1997: Bajola Alumbrera, Cerro de la Vanguardia, and Salar de HombreMuerto. Between 1970 and 1997 the per capita DE of oresrepresented, on average, 0.74% of total DE. Since 1998 it hasrepresented, on average, 9% of DE. The export value of metalores increased from US$150 million in 1990 to US$1,200 in1999 (Prado 2005). Mining conflicts have become a permanentfeature of Argentinean politics since the 2000s (Svampa andAntonelli 2009; Walter and Martinez-Alier 2010).

Extraction of Fossil FuelsThe DE of fossil fuels increased by a factor of three between

1970 and 2009. In 1992–1993 major regulatory reforms werepromoted, such as approval of a foreign investment law and theprivatization of Yacimientos Petrolıferos Fiscales (YPF), the na-tional petroleum company. Licenses to explore and eventuallyexploit 140 oil concessions for 25 years were released. Naturalgas exploitation increased by a factor of 6.31 (ECLAC 1997)during the period studied, showing annual growth rates of 9.9%in 1995 and 13.8% in 1996. Fossil fuels are one of the maininputs of economic activities, and maintained a 10% share ofper capita DE.

Extraction of Construction MaterialsThe per capita DE of construction minerals was, on aver-

age, 3 tonnes/capita/year, representing 17% of per capita DE. InSpain this flow represented 58% of the total DE between 1980and 2004 (Gonzalez-Martınez et al. 2010), and it increased even

more until the end of the building boom. In fact, between 1980and 2009, the sum of construction minerals and industrial min-erals related to construction activities in Argentina increasedby a factor of 1.39 (in absolute terms).

Material flow studies show a close relationship betweenbuilding materials extraction and economic growth cycles(Behrens et al. 2007; Weisz et al. 2006). The case of Argentinaconfirms this hypothesis. The deep economic downturns of 1990and 2001 coincided with the lowest DE of construction miner-als. Likewise, economic recovery from 2002 onward led to anincrease in construction activities.

Extraction of Industrial MineralsThe extraction of industrial minerals remained relatively

low during the period of study. From 1970 to 2009 the flowfluctuated between 3,000 and 12,000 tonnes, more than 90%of which comprised clays and salt.

Imports and Exports

Figure 4 presents the evolution of exports and imports inphysical terms and their monetary equivalents. Growth inphysical exports has occurred particularly since the mid-1990s,driven by external demand. Between 1970 and 2008, exportsgrew more than sixfold. Imports remained constant due to im-port substitution during the 1970s, then physically stagnated inthe 1980s due to the economic downturn. Imports grew in the1990s, but fell drastically during the crisis and devaluation of2001, to grow again rapidly until 2008, when they were threetimes greater than in 1970.

There is a tight link between trade and monetary policiesand the physical response of the economic system. Prior to1976, trade was characterized by stable features both in terms ofweight and value. This pattern ended with the first neoliberalpolicy package, implemented by the military government oncethey came to power in 1976.

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Figures 5 and 6 present the composition of exports and im-ports in tonnes by main material groups. Notice the differentvertical scales.

As shown in figure 5, biomass-based products have alwaysbeen the main exports. From 1993 to 2009, the so-called soycomplex (beans, oil, flour, and pellets) comprised, on average,41% of the total biomass weight exported, and manufacturedagricultural products represented an important component ofthis group. It is important to mention that these manufacturedproducts have a low value added (e.g., vegetable oils) (Giletta2005).

From the early 1990s, petroleum started to be another ma-jor export commodity. In 1989 the government privatized thenational petroleum company and liberalized the market, autho-rizing oil imports and exports (Kozulj 2002). Fossil fuel-basedproducts represented about 30% of exports by weight from 1994to 2004. They are now in relative decline due to the fact thatArgentina reached its peak oil extraction in 1998. However,

further investment could expand known reserves (Araoz et al.2008).

Concerning imports (figure 6), fossil fuels and ores have beenthe predominant flows. Argentina has been very dependent onforeign iron and steel, which represented 30% of the cumulativephysical imports during 1970–2009 despite an attempt by thegovernment to reduce dependence on foreign iron by openingan iron mine in 1978 (USGS 2011).

Since the early 1990s, refining capacity in Argentina hasnot been enough to meet increasing domestic demand (Araozet al. 2008). The remarkable increase in fossil fuels extractiongenerated a considerable decline in the country’s oil reserves, asnew reserves were not added at the rate they were consumed. By2008, Argentina became a net importer of oil and its derivatives.This picture could change with the extraction of shale gas inthe future.

Due to the import and export patterns described above, Ar-gentina was a net exporter in terms of weight during the whole

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Figure 7 Domestic material consumption in tonnes per capita for Argentina (1970–2009).Source: Own estimations based on data from FAO (2010), IEA (2010), MAGyP (2011), SERA (2000, 2011), SMRA (1993, 2011), and USGS(2011).

period. An increasingly negative PTB (imports minus exports)is observed, −4.4 million tonnes in 1970 and −67 milliontonnes in 2008. Argentina’s per capita PTB deficit is one of thehighest in Latin America. In 2000 it reached 1.65 tonnes/capita,higher than in Ecuador and Colombia, which both had PTBdeficits of 1.3 tonnes/capita (Vallejo 2010; Vallejo et al.2011).

Material Input

From 1970 to 2009, direct material input increased from 15tonnes/capita/year to 19 tonnes/capita/year. Imports grew withthe fixed parity plan after 1990. DE has been the main sourceof material inputs. Per capita imported materials representedonly 2.3% of DMI in 1970 and 3% in 2009. A completelyopposite pattern regarding imports is presented by Spain, whereper capita imported materials accounted for 23% of the DMIin 1980, increasing to 31% in 2009 (Gonzalez-Martınez et al.2012).

Domestic Material Consumption

DMC is a crucial indicator of a nation’s social metabolism,providing a good measure—in physical terms—of the in-termediate and final consumption of materials in aneconomy.

Between 1970 and 2009, in Argentina, DMC increased from382 million tonnes to 600 million tonnes, with an averageannual growth rate of 1.24%. In relation to the population,DMC decreased from 16 tonnes to 15 tonnes between 1970 and2009. Despite this decline, a per capita DMC of 15 tonnes is oneof the highest in the region, exceeded only by Chile (Giljum2004) and Peru (Silva-Macher 2007), countries characterizedby strong and old mining industries.

Figure 7 shows two trends in DMC, an initial decline from1970 to 1990, followed by overall growth. The overall growthactually occurred in three consecutive cycles of growth and de-cline. The initial decline must be understood as correspondingwith the economic stagnation and deterioration in GDP per

Perez Manrique et al., Biophysical Performance of Argentina 9

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capita during this period due to political and macroeconomicinstability. The cycles of growth and decline resulting in overallgrowth correspond to the economic growth between 1991 and1998, the economic decline until 2002, and the rapid growthphase until the 2008 financial crisis.

Consumption of BiomassAs shown in figure 7, biomass is the main resource base of

this economy, followed by minerals and fossil fuels. Between1970 and 2009 the share of biomass DMC per capita decreasedfrom 70% to 54%. This could be explained by the increase insoybeans in the DE share, which are mostly exported.

Consumption of Metal OresIn contrast, the share of metal ores consumption per capita

has increased since 1997. Between 1970 and 1996 this share was,on average, 1.46%, and between 1997 and 2009 it was 10%.

Despite the fact that the production of ores has been ori-ented toward export since 1993 (Prado 2005), the significantincrease in metal ores consumption per capita since 1997 canbe understood by examining the processing steps involved inthe mining industry. Once such steps are performed, the quan-tities traded are much smaller than the quantities extracted,generating significant differences between apparent and finalconsumption (Steinberger et al. 2010). Thus ore and metal ex-porting countries such as Argentina tend to have proportionallyhigh levels of apparent consumption of these materials withoutactually consuming them.

Consumption of Construction MineralsBetween 1970 and 2009 the per capita share of construc-

tion materials increased from 20% to 23%. In the 1970s theconstruction sector was dominated by public sector projects(Coremberg 2000). During this decade the annual growth rateof per capita consumption of construction materials was 1.2%.

Between 1980 and 1990 a significant decline of the construc-tion sector occurred, with a negative annual growth rate of percapita consumption of construction materials of –6.7%. Witha sustained decline in public investments, this sector dependedexclusively on private sector demand. From the early 1990s,in a context of macroeconomic stability, demand in the con-struction sector recovered, with an average per capita growthrate of building materials of 6.3%. However, given the low con-struction activity of the previous decade, it was not until 1998that the mass flow of building materials reached its previousmaximum level (Ruggirello 2011).

After the 1998–2002 crisis period there was again a rapidincrease involving participation of the public sector in housing,road construction, and energy infrastructure (Ruggirello 2011).The annual growth rate in per capita DMC of constructionminerals was 16% between 2003 and 2009, when it reached3.4 tonnes/capita/year.

Consumption of Fossil FuelsThe DMC per capita of fossil fuels, like that for building

materials, has remained closely tied to economic cycles. The

share of fossil fuel consumption in total DMC increased from8% in 1970 to 11% in 2009. Between 1970 and 1990, dur-ing the economic stagnation and deterioration of GDP percapita, consumption per capita of fossil fuels remained moreor less stable (average annual growth rates of 0.06%). Duringthe economic revival of the 1990s, consumption increased atan average annual rate of 4%. The economic decline that oc-curred from 1999 to 2002 fostered a 4% decrease in consump-tion. Between 2003 and 2009 there was 3% annual growth onaverage.

If we compare the DMC of Argentina with a European coun-try such as Spain, which had 3.1 tonnes DMC/capita in 2000(Weisz et al. 2006), Argentinean fossil fuels’ DMC per capitapresents relatively low values, 1.5 tonnes/capita/year on aver-age for the period 1970–2009, peaking at 1.8 tonnes/capita in2008. Argentina’s energy matrix (excluding biomass) relies in-creasingly on natural gas (an efficient energy carrier), whichcomprised up to 50% of the total supply in 2004 (SERA 2004).

Sociometabolic Regimes in Domestic MaterialConsumption

According to Krausmann and colleagues (2008), societiescan present different sociometabolic regimes that correspond toa set of impacts on the environment. Krausmann and colleagues(2008) recognize two main metabolic regimes: agrarian andindustrial.

A slow transition from an agrarian to an industrial regime hasbeen observed for different Latin American countries (Eisen-menger et al. 2007). In Argentina we observe a slow transi-tion toward an industrial regime characterized by a high ex-port surplus in material terms, yet still with a high relativeimportance of biomass. During the period studied, Argentinasustained high per capita energy consumption when comparedwith other countries in Latin America. For instance, in 2009Argentineans consumed 78 gigajoules (GJ)/capita, comparedto the overall Latin American average of 52 GJ/capita.4 How-ever, these figures are about half the European Union per capitaaverage (138 GJ/capita in 2009) (World Bank 2011).

The metabolism of Argentina’s economy shows a large shareof biomass production, but the significance of this is very dif-ferent from some countries with a similar share, such as In-dia or poorer Latin American countries. For instance, between1980 and 2009 the average agriculture value added per workerin Argentina was US$8,257 (base year 2000) (World Bank2011), higher than the Latin American average of US$3,385(World Bank 2011) and much higher than India’s. In addition,Argentina’s small percentage of agricultural population is a fea-ture of an industrial regime.

Argentina’s metabolism is also different from that of denselypopulated industrial countries (Krausmann et al. 2008). As aprimary exporting country, Argentina has had a large physicaltrade balance deficit and has suffered from unfavorable terms oftrade during long periods of its history. This is in contrast to thephysical trade balance surpluses of industrial countries (such asSpain, other European countries, and Japan). Countries with

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similar DMCs per capita thus can have very different economicstructures and trade patterns.

In many ways Argentina is a persistent follower of the (of-ten interrupted) “staple growth path” (we refer here to HaroldInnis’s “staple theory of growth” for Canada). Innis argued thatCanada developed as it did because of the nature of its staplecommodities, such as fish, fur, lumber, agricultural products,and minerals (Buckley 1958; Innis 1999). He was appreciativebut also critical of this pattern of economic growth.

The so-called staple theory of growth states that export ofraw materials can trigger economic growth. Its critics argue thatreliance on commodity exports can lead to a trap because ofdeclining terms of trade and natural resources depletion, theso-called ecological Prebisch thesis (Perez-Rincon 1999).

With regard to public policies, one pertinent question iswhether Argentina will choose industrialization for the internalmarket or follow a trade and material consumption patternlike that of other staple-exporting economies such as Australia.Comparing the Argentinean metabolic profile in per capitaterms to that of Australia, Schandl and West (2012) found thatboth countries have large physical trade deficits, low populationdensity, and a very high degree of urbanization. Argentina has alower GDP per capita (although rapidly growing in the 2000s).The high levels of biomass DE (grazing in both countries, butalso crops in Argentina) and also the moderate levels of DEand DMC of building materials per capita are roughly similarin both countries, but Australia achieves much higher levels ofper capita DE of fossil fuels and metal ores.

Dematerialization Trends

One of the objectives of an MFA is to analyze dematerial-ization trends. Economies are dematerializing if there is down-shifting in the amount of extracted materials and generatedwaste. Authors distinguish between strong and weak demate-rialization, also referred to as absolute and relative decoupling.The first concerns an absolute reduction of extraction and con-sumption; the second refers to a decrease in extraction andconsumption per unit of economic output (Cleveland and Ruth1999).

As far as weak dematerialization is concerned, there was adecline in material intensity (DMC/GDP) in Argentina, from2.8 tonne/$US to 1.6 tonne/$US (base year 2000), in the 40years of the study. Regarding strong dematerialization, between1976 and 1990 absolute DMC decreased at an average annualrate of –0.67% during the first economic cycle of recession andmacroeconomic instability and the same happened between1999 and 2002 during the economic decline, when absoluteDMC decreased at an average annual rate of –0.46%. However,there was an overall increase in DMC from 1970 to 2009, from382 million tonnes to 600 million tonnes.

The results obtained for Argentina confirm that there is noevidence of dematerialization regarding overall material use.The only periods of overall absolute dematerialization and rela-

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Figure 8 Argentina terms of trade (TOT) (1970–2009) and SpainTOT (1980–2009), measured relative to the base year 2000.Source: Own estimations based on data from UNSD (2009) andGonzalez-Martınez et al. 2012).

tive dematerialization for minerals and fossil fuels were periodsof economic recession or decline.

Terms of Trade and Integration into theGlobal Economy

About 6 decades ago the Latin American “structuralistschool” introduced a theory about the causes of underdevelop-ment. One such cause was the trend toward deterioration in theterms of trade of primary export products. This approach, no-tably defended by Argentinean economist Raul Prebisch, restson the recognition of center–periphery polarization. Accordingto this theory, the periphery supplies cheap raw materials incompetitive markets. Prebisch (1950) observed that the termsof trade for peripheral countries tend to deteriorate because inindustrial countries salaries increase in line with productivity.

Comparing Argentina and Spain, we calculate the averagevalue per tonne of imports that can be purchased through thesale of 1 tonne of exports. In figure 8, for instance, the valueof 0.75 means that 1 tonne of exports buys only 0.75 tonnesof imports. In this sense, terms of trade for Argentina are fourtimes lower than those for Spain.

Terms of trade are said to deteriorate if the index decreases,that is, if the price of exported products tends to decrease com-pared to that of imported products. Terms of trade for Argentinaexhibit a downward trend during the period of study, decliningfrom 0.75 to 0.37.

This is because the technological changes in manufacturedgoods tend to reduce not only labor inputs, but also material in-tensity. This does not mean, however, that the total demand forraw materials decreases in general, because of rebound effectsand increased social metabolic flows. While technical inno-vation and increased productivity generate higher profits andwages in the case of manufactured goods, technical progresslowers prices for primary products because these are sold incompetitive markets (Prebisch 1950). One exception is the Or-ganization of the Petroleum Exporting Countries (OPEC), anintergovernmental organization of a dozen countries that arethought to hold about 80% of the world’s crude oil reserves and

Perez Manrique et al., Biophysical Performance of Argentina 11

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that influences world production and prices of crude oil. Yetthere is no copper cartel, or soybean cartel, or even natural gascartel.

Moreover, the low price of primary exports does not com-pensate for the social and environmental costs involved in theirextraction and trading (Jorgenson 2009; Rice 2007). There aremany complaints about the environmental liabilities of soy-bean, oil, and minerals extraction (Binimelis et al. 2009; Pengue2001; Svampa and Antonelli 2009; Walter and Martinez-Alier2010). In this sense, an ecologically unequal exchange arises(Giljum and Eisenmenger 2004; Hornborg 1998; Muradian andMartinez-Alier 2001). There is intensified exploitation of nat-ural resources in order to purchase the same basket of importedgoods, while environmental liabilities and social costs are notincorporated into the final prices of export goods (Roberts andParks 2009). As Hornborg wrote in 1998, world metropolitanareas rely structurally on relatively cheap imports of energy andmaterials.

Despite the fact that export prices increased notably in thelast 10 years, from US$297/tonne in 1999 to US$660/tonnein 2009 (at constant prices, base year 2000), Argentina has topay even larger unit prices for imports. For instance, in 2009Argentina was paying US$1,808/tonne for imports (constantprices, base year 2000).

Conclusions

This study presents information about biophysical aspects ofthe Argentinean economy using MFA methodology and com-pares the results to those of Spain (Gonzalez-Martınez et al.2012) and other countries. The quantity of materials domesti-cally extracted and consumed in Argentina grew by 77% and77.2%, respectively, during the 40 years covered by this study.

Over the last 4 decades, external demand was the maindriving force for the increasing material extraction of naturalresources, as indicated by a near-constant DMC per capita andgrowing DE and exports per capita. Export growth since 1970was mainly based on biomass products. From the late 1990s on-ward this pattern changed as fossil fuels (briefly) and metal oresgained importance. Mining projects only consider the produc-tion of concentrates and products without refining, so the addedvalue in the extraction of minerals is low. Additionally, despitethe fact that manufactured products of agricultural origin haveincreased, their added value remains low as well.

Therefore the Argentinean economy presents the same pat-tern as other Latin American economies. Its terms of trade aretotally opposite to those of industrialized economies (such asSpain). Argentina has a large physical trade deficit. Its depen-dence on exports of commodities increased during the periodanalyzed. Additionally, it is an economy based on agriculturalactivities that go hand in hand with deforestation, loss of bio-diversity, and intensive use of agrochemicals (Binimelis et al.2009; Pengue 2001). Likewise, open-pit mining is also a sourceof hazardous wastes that threaten human health and the en-vironment. Such evidence seems to reinforce the ecologicalPrebisch thesis.

Krausmann’s typology for analyzing sociometabolic transi-tions (Krausmann et al. 2008) is too general to fit the featuresand trends of economies like Argentina. Is Argentina agrarianor industrial? It has gone through a transition from an agrar-ian regime to become an industrial economy with an urbanizedpopulation, but its economy relies on high levels of biomassproduction and other primary exports. We might conclude thatArgentina presents a resource use pattern similar to that ofcountries with an abundance of natural resources, large territo-ries, and low population densities, such as Australia, but it isfar behind Australia in extraction of raw materials per capita.Argentina is highly urbanized and has a relatively high level ofenergy consumption per capita, but its current GDP per capita isonly US$7,665 (base year 2009) (World Bank 2011), certainlyone of the largest in Latin America, but far lower than Australia.Its industrial economy is still based on low value-added prod-ucts. It has good prospects for mining, but this attracts stronglocal opposition for environmental reasons.

Acknowledgments

This article contributes to the ENGOV FP7 (Environmen-tal Governance in Latin America and the Caribbean Sev-enth Framework Programme) Project (266710) and to theSpanish MICINN (Ministerio de Economıa y Competitividad.Secretaria de de Estado de Investigacion, Desarrollo e Inno-vacion [Ministry of Economy and Competitiveness. Secretaryof State for Research, Development and Innovation]) Project(CSO2010-21979). We would also like to thank the threeanonymous reviewers for their useful comments.

Notes

1. One tonne (t) = 103 kilograms (kg, SI) ≈ 1.102 short tons.2. One square kilometer (km2, SI) = 100 hectares (ha) ≈ 0.386 square

miles ≈ 247 acres.3. One hectare (ha) = 0.01 square kilometers (km2, SI) ≈ 0.00386

square miles ≈ 2.47 acres.4. One gigajoule (GJ) = 109 joules (J, SI) ≈ 2.39 × 105 kilocalories

(kcal) ≈ 9.48 × 105 British Thermal Units (BTU).

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About the Authors

Pedro L. Perez Manrique, Julien Brun, Ana C. Gonzalez-Martinez, Mariana Walter, and Joan Martinez Alier are re-searchers at the Institut de Ciencies i Tecnologia Ambientals ofthe Universitat Autonoma de Barcelona in Barcelona, Spain.

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