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Country profile - Argentina

argentina

Argentina, the second largest country in South America and eighth largest in the world, has a wealth of natural resources, a diversified industrial base and, with a highly literate population, it should be a country blessed with good fortune. But huge external debts, high inflation and decades of corruption have led the country to the point of economic collapse and almost half of its population is estimated to be below the poverty line.

Restrictions on withdrawing cash from banks have, for the first time in a year, been recently lifted. But it is feared that a rush to convert currency to dollars would further undermine the peso, which has lost about two-thirds of its value in less than a year, and exacerbate the already sharp increase in inflation. A debt payment of $805m to the World Bank was recently in default and negotiations with the IMF have still to be finalised. During 2002, Argentina's economy shrunk by 14% and the official unemployment rate is now over 20% but these figures fail to reveal the full impact of rising poverty and deprivation that has affected the country during the last year.

Argentina can be divided into four major regions: The rugged Andes along the western border with arid basins, glacial mountains and the Lake District. The sub-Andean region consists of a series of irrigated enclaves where sugarcane, citrus fruits (in the North) and grapes (central) are grown. The Chaco plain - fertile lowland north with subtropical rainforests and cotton farms. The central Pampas - flat, fertile plains (a mix of humid and semi-arid areas) which provide much of Argentina's agriculture including raising of sheep and cattle, and wheat, corn, soybean and fodder crops. Patagonian plateau - a combination of low, arid, pastoral steppes and glacial regions. Large flocks of sheep are extensively raised on the steppe vegetation and fruit and vegetable farms found in the mountain valleys. In addition, Argentina shares half of the island territory of Tierra del Feugo with Chile and twenty years after the conflict in the Falklands, Argentina continues to claim sovereignty over the islands, known to Argentineans as the Malvinas.

The new poor

Despite being considered the breadbasket of South America, recent national headlines have highlighted the plight of more than 200,000 children suffering from severe malnutrition in the impoverished province of Tucumán in the north. Yet, Argentina is the world's fifth largest exporter of agricultural products, including soybeans and lemons, which Tucumán produces in large quantities. Ironically the current economic crisis has made exporters wealthier as exports are priced in dollars and, despite export taxes, farmers are finding it more profitable to export than to sell to domestic markets. As a result, local food prices have soared, by over two-thirds in twelve months, and much of the food produced is now beyond the reach of the poor.

Many Argentineans feel that the country has sunk as low as it can go with little prospect of recovery in the near future. 90% of Argentina's population live in and around urban areas and the poorest, a growing number of 'cartoneros', struggle to make a living. Their only option is to scavenge through the rubbish to sort out recyclable waste, as even this has increased in value since the collapse of the peso. Prices for waste cardboard, for example, are twenty times higher than last year and incomes for a successful cartonero can be up to 600 pesos ($169) a month, one and a half times more than the average wage. Nationwide, around 300,000 families are currently reliant on this growing 'industry'. Others have become streetsellers in already crowded city centres. But poverty is inevitably linked to crime and the capital is afflicted with increasing thefts, of anything from manhole covers to ornamental decorations, and victims taken for ransom for as little as $100.

Rural respite?

In the rural areas of Argentina, farming and ranching continues to be a way of life but many smaller farmers have already gone out of business and, without subsidies, others struggle to survive. Although mechanization is now more common, many farmers still use no chemical products and livestock continue to roam freely on the wide, rich plains of the Pampas. As a result, Argentina is the world's third largest producer of organic products, mostly plant products. These include cereals, fruits, vegetables, oils, aromatic herbs, sugar, juices and wines although increasing numbers of livestock now have certified organic status. 90% of all organic products are exported, mainly to the EU but with growing demand from the US.

As Argentina stretches from the tropics to Antarctica and the country is self-sufficient in energy, almost any crop can be grown in the varied climates that exist within the region. However, in contrast to the positive move towards organic agriculture, there is increasing concern over the number of farmers growing GM-soya. Since 1996 an increasing number of farmers have cultivated soya; Argentina now accounts for over 20% of total global acreage of GM crops, second only to the US. But with increased global production, soya prices have dropped and export earnings could be further affected if more countries reject GM consignments. The ecological damage is also of concern as native woodlands have given way to soya cultivation and GM varieties are grown all the year round with increasing herbicide resistance being observed in weeds. However, under the current economic climate it is likely that more farmers will switch from corn to lower-input soya, although not necessarily GM-soya, as most corn growers rely on high-cost hybrid seed and intensive use of agricultural inputs.

Agriculture remains an important part of Argentina's GDP but with farmers, like the rest of the population find their debts increasing, Argentina's climb out of its economic abyss is likely to be long and difficult.

Statistical information
  • Country: Argentine Republic
  • Capital: Buenos Aires
  • Area: 2,776,890 sq km
  • Population: 37,812,817 (July 2002 est.)
  • Ethnic groups: White (mostly Spanish and Italian) 97%, mestizo (Amerindian-Spanish), Amerindian and other minorities 3%
  • Languages: American Spanish, plus 17 indigenous languages
  • Population growth: 1.13% (2002 est.)
  • Labour force:agriculture 20%, industry 24%, services 56% (1998)
  • GDP: $453 billion (2001 est.)
  • GDP per capita: $12,000 (2001 est.)
  • GDP composition by sector: agriculture 6%; industry 28%; services 66% (2001)
  • Population below poverty line: 37% (2001 est.)
  • Major industries: Food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel and agribusiness
  • Land use: arable land 9%; permanent crops1%; other 90% (1993 est.)
  • Irrigated land: 15,610 sq km (1998 est.)
  • Natural resources: fertile plains of the Pampas, lead, zinc, tin, copper, iron ore, manganese, petroleum, uranium
  • Agricultural products: sunflower seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat and livestock
  • Export commodities: edible oils, fuels and energy, cereals, feed, motor vehicles
  • Major Export Partners: Brazil 26.5%, US 11.8%, Chile 10.6%, Spain (3.5%) (2000 est.)
  • Environmental issues: Contamination of rivers by untreated domestic waste and soil erosion through overgrazing, particularly in the damp, northern Pampas.

Date published: January 2003

 

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