Argentina: Economic and Political Outline

Economic Overview

After the severe recession, which lead to the Argentinian bankruptcy in 2001-2002, the economy saw a rapid and stable growth of 8% on average. Hit by the global financial cirisis of 2009 (0.9% growth), the Argentinian economy experienced fast and dynamic growth in 2010, together with the rest of the South-American continent. In 2011, the growth (8%) was driven by good performance of the exports, benefiting from a surge in grain prices.

President Cristina Fernandez de Kirchner was re-elected in the first round in October 2011, for a four-year term. She will pursue expansionary economic policy, which contributed to a rapid GDP growth, but also led to growing imbalances, inflationary pressures and a deteriorating public finance management. The government responded to this situation by a resurgence of protectionism (price controls and trade), by offering a 45% reduction in imports by 2020 to promote local industries. This would also ensure a trade surplus, the only way for Argentina to obtain foreign exchange, while the country still has a debt with the Paris Club (8 billion USD). The main challenges are the fight against inflation and capital flight. Moreover, the financial system remains fragile and the country faces an energy crisis due to lack of investment in this sector.

The social situation of the country is sensitive: unemployment  (7%) and malnutrition persist, with25% of the population living under the poverty line. 30% of workers are employed by the informal economy. According to the official numbers, 2 million are living in poverty - according to private studies, the real number is five times higher.

Main Sectors of Industry

Having lost the position of a superpower it occupied at the beginning of the 20th century, Argentina remains an important world economy, namely due to its agricultural production. The agricultural sector, which is based livestock farming, cultivation of cereals (wheat, corn, soy) and citrus fruit, represents around 10% of the country’s GDP. On the global level, Argentina is the largest exporter of soy-derived products and the third largest producer.

Rich in energy resources, Argentina is the world’s fourth largest oil producer and first largest natural gas producer in Latin America.

The industry sector has vastly expanded over these last few years. It contributes to more than one third of the GDP. Food packaging (in particular meat packing, flour grinding, and canning) and flour-milling are the country's main industries.

The services sector followed the same trend as the industry sector. Today, it contributes to more than half of the GDP. Argentina has specialized in areas of high-tech services and offers excellent value for money specifically in software development, call centers and nuclear energy.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

51.7/100

Position:

Mostly unfree

World Rank:

132/179

Regional Rank:

21/26

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

State Portal
Ministry of the Economy
Secretariat of Agriculture, breeding, fishing and food (Sagpya)
Ministry of Foreign Relations, International Trade and Religion

Statistical Office

Instituto Nacional de Estadística y Censos (INDEC)

Central Bank

Banco Central de la República Argentina

Stock Exchange

Bolsa de Comercio de Buenos Aires

Other Useful Resources

Asociación de Importadores y Exportadores de la República Argentina (AIERA)

Main Online Newspapers

La Nación
Clarin
Infobae Profesional
Cronista

Economic Portals

Portal of Argentina, Economic Section

Political Outline

Type of State

The official name of Argentina is the Republic of Argentina. It is a federal republic based on parliamentary democracy.

Executive Power

Executive power is held by the President of the Argentine nation. It is his/her responsibility to respond to national interests.
The President is the supreme head of the country, head of government, the politician responsible for the general administration of the country and commander-in-chief of the armed forces. The president is elected by universal suffrage for four years and can be re-elected for two consecutive terms of office. The vice-president is elected with him/her. The president appoints the Council of Ministers.
Argentina has 23 provinces and 1 autonomous federal district, which have retained some powers which do not belong to the federal government. They elect their own legislators and provincial governors.

Legislative Power

The legislative power is composed of a two-chamber parliament: a lower chamber, the Chamber of Deputies elected for 4 years by direct universal suffrage, and an upper chamber, the Senate elected for 6 years also by direct universal suffrage.
The parliament is called Congreso Nacional (National Congress).

Main Political Parties

The country has two large political parties: the PJ (Partido Justicialista, also called the Peronist Party) and the UCR (Civic Radical Union). Traditionally, the UCR has a more middle class, urban electorate, and the PJ an electorate of workers. But today both parties have a wider electoral base. The smaller parties, like the center-right PRO (Republican Initiative for Alliance) occupy different positions in the political spectrum, and some are only active in a few provinces.

Current Political Leaders

President : Cristina FERNANDEZ de KIRCHNER (since 2007)
Vice President: Amado BOUDOU (since 10 December 2011)

Next Election Dates

Presidential elections:october  2011
Chamber of Deputies and Senate:october 2011

Indicator of Freedom of the Press

World Rank:

48/179

Evolution:

7 places up compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).