Argentina is experiencing an export boom. How much are provinces benefitting?

Argentina's economy is currently experiencing a dual nature, with record-breaking exports in sectors such as oil, agriculture, and mining, but stagnant or decreasing growth in real economy sectors like industry, construction, and commerce. The libertarian government's strategy to capitalize on these export sectors to generate a "trickle-down" effect on less favored sectors has been evaluated in a recent report by orthodox think tank Fundación Mediterránea.

The report examines the impact of the export boom on various provinces, including Neuquén, San Juan, Salta, Jujuy, Catamarca, Santa Cruz, Córdoba, and Buenos Aires.

Neuquén, famous for the Vaca Muerta oil and gas field, is leading the export boom, with significant improvements in the wage bill for tradable goods outside of oil and gas, growing at a faster rate than the oil sector itself. This indicates that a strong export impulse can drive the entire provincial productive structure, going beyond the sector that initiates it.

In contrast, San Juan and Catamarca, two mining provinces, also show improved wage bills, but the increase is primarily driven by mining salaries, while the rest of the tradable goods grow at a slower pace. The overall private sector wage bill only increases minimally, suggesting a limited trickle-down effect in these provinces.

The agricultural provinces of Córdoba and Buenos Aires do not experience the same level of trickle-down benefits. While the agricultural sector exports more and pays better, its strong performance does little to drive the provincial economy as a whole. In real terms, total wages in these sectors have only increased by 7% and 5%, respectively, compared to declines of 4% and 5% in the rest of the tradable goods sector.

In Santa Cruz, the reality is mixed, as mining is performing well, but the oil sector is declining due to the closure of mature wells by the state-run oil company YPF. This shift negatively impacts other tradable goods, sectors, and the total wage bill.