Government And Political Conditions Of Argentina Economics Essay

Argentine is a country located in the south of America. It has an area of 2.8 million sq. km. (1.1 million sq. mi.); about the size of the U.S. east of the Mississippi River; second-largest country in South America. It climate is varied; predominantly temperate, with extremes ranging from subtropical in the north to arid/sub-Antarctic in far south.

People

Argentines are a fusion of diverse national and ethnic groups, with descendants of Italian and Spanish immigrants predominant. Waves of immigrants from many European countries arrived in the late 19th and early 20th centuries. Syrian, Lebanese, and other Middle Eastern immigrants number about 500,000 to 600,000, mainly in urban areas. Argentina’s population is overwhelmingly Catholic, but it also has the largest Jewish population in Latin America, estimated at between 280,000 and 300,000. In recent years, there has been a substantial influx of immigrants from neighboring countries, particularly Paraguay, Bolivia, and Peru. The indigenous population, estimated at 700,000, is concentrated in the provinces of the north, northwest, and south. The Argentine population has one of Latin America’s lowest growth rates. Eighty percent of the population resides in cities or towns of more than 2,000, and over one-third lives in the greater Buenos Aires area.

Nationality: Noun and adjective–Argentine(s).

Population (2010 est.): 41.029 million. 

Annual population growth rate (2010 est.): 1.053%.

Ethnic groups: European 97%, mostly of Spanish and Italian descent; mestizo, Amerindian, or other nonwhite groups 3%.

Religions: Roman Catholic 92%, Protestant 2%, Jewish 1%, other 5%. 

Language: Spanish.

Education: Compulsory until age 18. Adult literacy (2001)–97%. 

Health: Infant mortality rate–11.44/1,000. Life expectancy (2010 est.)–76.76 yrs. 

Work force: Industry and commerce–35.8%; agriculture–9.5%; services–54.7%.

Government and political conditions

Argentina’s constitution of 1853, as revised in 1994, mandates a separation of powers into executive, legislative, and judicial branches at the national and provincial level. Each province also has its own constitution, roughly mirroring the structure of the national constitution. The president and vice president are directly elected to 4-year terms. Both are limited to two consecutive terms; they are allowed to stand for a third term or more after an interval of at least one term. The president appoints cabinet ministers, and the constitution grants him considerable power, including authority to enact laws by presidential decree under conditions of “urgency and necessity” and the line-item veto.

The two largest traditional political parties are the Justicialist Party (PJ–also called Peronist), founded in 1945 by Juan Domingo Peron, and the Union Civica Radical (UCR), or Radical Civic Union, founded in 1891. Traditionally, the UCR has had more urban middle-class support and the PJ more labor support, but both parties have become more broadly based. Although both parties are currently undergoing a process of dramatic change and restructuring, they have maintained their nationwide structures. New political forces, like the Civic Coalition (CC) and the Republican Proposal (Propuesta Republicana, or PRO), are concentrated in the urban centers and are working to build national party structures. PRO is mostly based in the city of Buenos Aires, where its leader, Mauricio Macri, won the mayoral elections in June 2007.

Foreing relations

Argentina’s foreign policy priorities are focused on increasing regional partnerships, including expanding the MERCOSUR regional trade bloc by integrating Venezuela as a new full member, and institutionalizing the Union of South American Nations (UNASUR). Argentina is an active member of the United Nations system, and currently holds a seat on the UN Human Rights Council. Argentina currently has approximately 700 peacekeeping troops in Haiti in support of the UN peacekeeping operation (MINUSTAH), reflecting its traditionally strong support of UN peacekeeping operations. As a member of the Board of Governors of the International Atomic Energy Agency, Argentina has been a strong voice in support of nuclear non-proliferation efforts.

ECONOMY

GDP (2009): $306.7 billion. 

Annual real growth rate (2009 est.): +0.9%. 

Per capita GDP (2009): $7,472.

Natural resources: Fertile plains (pampas); minerals–lead, zinc, tin, copper, iron, manganese, oil, and uranium. 

Agriculture (7% of GDP; including agribusiness, about 58% of exports by value): Products–oilseeds and by-products, grains, livestock products. 

Industry (32% of GDP): Types–food processing, oil refining, machinery and equipment, textiles, chemicals and petrochemicals. 

Trade: Exports ($55.5 billion)–oilseed by-products, vegetable oils, cars, fuels, grains. Major markets–MERCOSUR 25%; EU 19%; NAFTA 9%. Imports ($38.8 billion)–machinery, vehicles and transport products, chemicals. Major suppliers–MERCOSUR 33%; EU 17%, NAFTA 17%. Imported goods from the United States totaled approx. 13.2% of Argentine imported goods.

Argentina benefits from rich natural resources, a highly educated population, a globally competitive agricultural sector, and a diversified industrial base. The move after the 2001-2002 crisis to a more flexible exchange rate regime, along with sustained global and regional growth, a boost in domestic aggregate demand via monetary, fiscal, and income distribution policies, and favorable international commodity prices and interest rate trends were catalytic factors in supporting 5 consecutive years of greater than 8% annual GDP growth between 2003 and 2007. The economic recovery enabled the government to accumulate substantial official reserves (over $51 billion as of late August 2010). The reserves, combined with the absence of fresh borrowing from the international capital markets, helped insulate the economy from external shocks. A higher tax burden, improved tax collection efforts, and the recovery’s strong impact on tax revenues supported the government’s successful efforts to maintain primary fiscal surpluses since 2003. 

Global financial turmoil and rapid declines in world commodity prices and economic growth during 2008 and 2009 resulted in diminished growth in 2008 and a mild recession in 2009. While the downtown was less severe in Argentina than elsewhere, the deterioration of both domestic and international demand complicated the fiscal situations of both the federal government and the provinces. The global economy’s current recovery during 2010 is helping to ameliorate some of those pressures. 

Official figures show that Argentine GDP reached U.S. $306.7 billion in 2009, approximately U.S. $7,472 per capita, with investment increasing an estimated 10% for the year and representing approximately 20.5% of GDP. Analysts expect 2010 GDP growth in the 7% to 8% range or higher. Government of Argentina statistics showed unemployment was 8.4% in 2009. Poverty dropped in the aftermath of the economic crisis of 2001-2002, after having reached a record high of over 50%. In 2009, the official poverty level was 13.2%. Some unofficial estimates suggest that unemployment and poverty levels may be higher.

Argentina had a $16.7 billion trade surplus in 2009. Foreign trade was approximately 31% of GDP in 2009 (up from only 10% in 1990) and played an increasingly important role in Argentina’s economic development. Exports totaled approximately 18% of GDP in 2009 (up from 15% in 2002), and key export markets included MERCOSUR (25% of exports), the EU (19%), and NAFTA countries (9%). Two-way trade in goods with the U.S. in 2009 totaled about $9.4 billion according to the U.S. International Trade Commission. Total two-way trade in services in 2009 was $5.1 billion (according to the Bureau of Economic Analysis, U.S. Department of Commerce). The production of grains, cattle, and other agricultural goods continues to be the backbone of Argentina’s export economy. High-technology goods and services are emerging as significant export sectors. Nearly 500 U.S. companies are currently operating in Argentina, employing over 155,000 Argentine workers. U.S. investment in Argentina is concentrated in the manufacturing, information, and financial sectors.