Global Development Institute Blog

By Miguel Kanai, University of SheffieldSeth Schindler, Global Development Institute and Javier Díaz Bay, Universidad Nacional de Luján

Argentina won its third FIFA World Cup last December in Qatar. This major sporting achievement fulfilled team captain Lionel Messi’s life-long ambition and consolidated the country’s status as a football powerhouse.

Now some in Argentina’s government hope to monetise sporting glory – literally. Plans are afoot to commemorate the World Cup victory by issuing a commemorative banknote, which officials hope will secure much-needed foreign currency and mitigate inflation. But after years of recession and decades of crises, this may not be enough to transform Argentina’s economic fortunes.

In 2018, the Argentine Peso (ARS) devalued 50% against the US dollar. It has continued losing value since, with inflation exceeding 70% in 2022. More worryingly, the economy has stagnated and shows no sign of recovery, with 40% of the population living under the poverty line.

Almost all Argentines have experienced an erosion in their quality of life as a result of the economic crisis. In this context the FIFA World Cup offered a rare opportunity to exult. Millions took to the streets after the national team’s thrilling victory over France in the tournament’s final. As days passed, massive street demonstrations turned to discussions on social media on how best to memorialise the historic occasion.

‘Messi tenner’

One of the most creative ideas came from graphic designer Bianca Ponzano. She proposed an ARS$10,000 note featuring Lionel Messi, also the number 10 in the squad, and her design went viral in a matter of minutes.

The highest denomination currently in circulation is ARS$1,000, or the equivalent of less than five Pounds. The Argentine Government plans to issue a new ARS$2,000 note and higher denominations are in preparation. Some government officials are giving even serious thought to the ‘Messi tenner.’ After initial rumours and denials, Silvina Batakis, head of the influential Banco Nación, recently acknowledged the plans and argued that such a tribute would touch the heart of every Argentine.

For supporters of the commemorative note, minting Messi is not merely a symbolic gesture. They anticipate that Messi’s global fandom would hold the commemorative note (rather than spend it). In Bangladesh alone, the albiceleste squad has tens of millions of fans who would potentially purchase the banknote.

Structural factors

The idea is that the banknote will help the Argentine government attract foreign currency and increase the money supply without accelerating inflation. However, this best-case scenario ignores the structural factors that have hamstrung the Argentine economy. While Argentina witnessed storied industrial growth in the late-19th and early-20th centuries, its economy has been in decline for decades. Since the 1970s, periods of rapid deindustrialisation under laissez-faire economics have alternated with ill-fated state-led efforts to re-invigorate the country’s industrial base.

In addition to long-standing industrial decline, Argentina’s economy is experiencing an ongoing shift from industrial production to agribusiness and resource extraction. In an attempt to take advantage of high-price commodities in the 2000s, the country adapted its logistics infrastructure to facilitate exports of soy, natural gas and more recently lithium. Availability of international funding for infrastructure-led development in the 2010s encouraged plans to promote export-oriented growth in poorly-connected regions that were historically ‘left behind.’

This model of development based on resource extraction carries with it negative social and environmental consequences. Furthermore, infrastructure provision alone does not reverse industrial decline while it risks reinforcing the country’s subordinate position in the global economy as a resource exporter. Tellingly, Argentine producers struggle to add and capture value within integrated supply chains.

Alternatives to economic decline

Is there a viable alternative to the country’s long-term economic decline and disadvantaged position in the international division of labour? Industrial districts in Greater Buenos Aires offer some answers to this question. In recent years, firms, workers groups, and local governments have engaged in innovative, if not always successful, efforts to adapt to prolonged decline. Rather than pursue growth at all costs, these efforts are geared towards maintaining living standards and well-being. For example, small and medium-sized enterprises (SMEs) stay afloat by relying on collaborative networks through which credit is provided on favourable terms and production can be scaled up rapidly. Whilst imports of machinery and technology were not eschewed, an ethos of ‘living within your means’ has discouraged indebtedness.

Some municipalities have prioritised support to SMEs by facilitating inter-firm collaboration. In some cases, municipalities promote local business interests across Argentina and help SMEs navigate complex domestic and international schemes that support energy transition. Finally, bottom-up initiatives retrain workers, and historic industrial spaces are re-invented for new forms of production.

To be clear, many municipalities in Greater Buenos Aires remain committed to business as usual and pursue orthodox growth-oriented policies. Truly innovative policies by the national government should augment existing local efforts to cushion the impacts of economic decline and instability whilst providing for social needs and developing the capacity of SMEs to sustainably serve local and regional markets. Football may have renewed optimism in Argentina but improving the country’s socio-economic fortunes will require more than monetizing Messi’s global popularity.


Photo credit: GCBA,CC BY-SA 2.5via Wikimedia Commons



Note:  This article gives the views of the author/academic featured and does not represent the views of the Global Development Institute as a whole.