Financial dependency: capital flight and external indebtedness in the periphery. Argentina's case

This study investigates, with preliminary insights, the process of Argentina's financial valorization in the 2015-2019 period, which led to a (new) sovereign debt restructuring between 2020/22 in Argentina. The paper draws a comparison with the previous indebtedness cycle (1976-2001), as well as with the Kirchner governments (2003-2015). Results indicate that approximately USD 321 billion were extracted from the national financial system from 1976-2015, while in the 1976-2001 period, foreign currencies originated from external indebtedness (both private and public). In 2002-2015, this role was played by trade surplus. Since 2016, the relationship between public external indebtedness and capital flight was reestablished, and there was a wealth externalization amounting to approximately USD 100 billion, in what was the accelerated implementation of the second financial valorization experience, which concluded with a rapid sovereign debt crisis. Its subsequent restructuring marks the limit of debt-led growth models for peripheral economies, such as the Argentine one, where the capital flight constitutes a major obstacle to recreate growth processes with income redistribution.