The Argentine economy is marked by the discrepancy between the considerable availability of resources and the inadequacy of the technical-financial mechanisms, which dates back to the demagogic forcing imposed in the 1950s by Peronism on the structural growth of the country. Endowed with a remarkable and diversified industry, the Argentina it has often discounted the gap between the prices of agro-food products, of which it is an export, and those of raw materials and investment goods, which need them precisely to support the industry. Furthermore, domestic demand is limited and has been compressed by recent deflationary measures: thus, the tensions between the economic oligarchy and the lower-middle classes have increased, which have seen a reduction in the purchasing power of wages and salaries,
The liberal economic policy of the military regime (1977-83) favored investments (including foreign ones), suspended the nationalization of major companies and deregulated the export of cereals and meat: the results, harshly discounted by the weaker classes, were initially positive, having reduced the trade deficit and the inflation rate, which on the eve of the coup d’état was equal to 800% per annum. However, the subsequent democratic government inherited a disastrous economic situation, characterized by a virulent recovery in inflation (700% in 1984), a large public deficit, impressive foreign debt and widespread unemployment. The consolidation policy, undertaken under the pressure of international financial organizations, aimed at monetary adjustment, penalizing the already depressed standard of living,
In 1992 the national currency (austral) was replaced by the peso, for which a fixed exchange rate was established with the US dollar, while the issuing capacity of the central bank was limited, together with freeing it from government directives; Customs tariffs were reduced, public enterprises privatized and financial operations liberalized. Productive growth made some progress, but social conditions did not improve. The monetary speculation that produced the Mexican financial crisis (1995) also involved the Argentina, causing a haemorrhage of capital towards foreign countries; similar effects had the speculations on the Russian ruble and the Brazilian real (1998). The vulnerability to external factors led, in 2001, to abandon the fixed exchange rate with the dollar with consequent devaluation of the currency; between 2001 and 2002 the country’s economy plunged into a dramatic crisis. The monetary stability policy curbed hyperinflation, but, by hindering production growth and exacerbating social unrest (40% of the companies in the Bonaerense region went out of business), it led to the collapse of the entire economy, up to the insolvency of the State. A restructuring of the foreign debt was thus necessary which, negotiated with the major creditors, in 2005 led to a strong reduction of the debt itself, with the consequence of heavy repercussions on the international bond markets, but internally generated a very lively production recovery. although not yet sufficient to raise the average conditions of the population, seriously deteriorated since the privatization and the dismantling of social welfare have seriously regressed the average income. The renegotiation of the debt and the now sensitive effects of economic integration in this area MERCOSUR seem relevant prerequisites for stabilization.
According to smber, only 10% of the territorial surface is exploited by agriculture, which forms, with breeding, the fundamental economic activity. Just under 1,500,000 ha are irrigated (especially in the provinces of Mendoza, San Juan and Río Negro). Large property prevails. The land used for agriculture and livestock is divided into estancias ; medium-sized farms (about 500 ha), with fruit-growing and wine-growing areas, are called chacras and smaller ones, with varied crops and where poultry, granjas, are bred ; with the name of quintasthe vegetable gardens and small orchards are indicated. Cereals clearly prevail in terms of cultivated area (about 35%): first of all wheat (7 million ha and 16 million t in 2005), grown especially in the provinces of Buenos Aires and Córdoba; then corn (2 million ha and 19 million t), one of the basic products of the Argentine economy; recently enormous diffusion of soybeans (15 million ha, 38 million t). Some industrial crops are important: sugar cane, widespread above all in the province of Tucumán, which owns 3/4 of the Argentine sugar refineries; cotton, mainly grown in Chaco. The vine, in the federated provinces of Mendoza, San Juan, La Rioja and Catamarca, gives excellent table grapes and abundant wine production (16 million hl). THERE. is a major exporter of agricultural products (almost 30% of the value of exports). Numerous arboreal essences of the Argentine forests (12.7% of the surface); Quebracho is especially important, used for tannin extraction and construction.
Sheep farming dominates in Patagonia; the bovine one in the province of Buenos Aires. The zootechnical patrimony (2004) includes 51 million heads of cattle, 12 of sheep, 4 of horses, 3 of pigs.
The greatest wealth of the subsoil is given by oil (34.5 million tons in 2004), extracted from the wells of Comodoro Rivadavia (Chubut), Cerro Redondo (Santa Cruz), Plaza Huincul (Neuquén) and localities in the provinces of Salta and Mendoza. Refining is concentrated along the Río de la Plata, as well as in the extraction sites. The production of natural gas is moderate (46 billion m 3), forwarded to consumption centers via gas pipelines. Silver, gold and zinc are extracted in small quantities. Industries, with the exception of agro-food industries, are in the process of settling down: well equipped, but scarcely competitive with foreign countries in terms of production costs, they have also suffered from the lack of internal capital, which has left room for multinational companies. Further negative factors are represented by external dependence for industrial technologies, as well as for some raw materials, by the high costs incurred for the extraction of hydrocarbons and by the concentration of the manufacturing sector in coastal regions and in a few internal ‘strong’ areas; on the contrary, a positive element is constituted by energy self-sufficiency. The most developed branches are the steel and metallurgical, mechanical, chemical and textile, with main centers in Buenos Aires, Córdoba and Rosario. The significant hydroelectric assets, now only partially exploited, are set to constitute an element of strengthening the economic structure. About half of the energy production (28 million kW installed and 83.3 billion kWh produced in 2003) derives from thermal power plants and some nuclear plants that use local uranium. The contribution of the large hydroelectric plants on the Paraná and Uruguay rivers, with others under construction, is set to increase. 3 billion kWh produced in 2003) comes about half from thermal power plants and some nuclear plants that use local uranium. The contribution of the large hydroelectric plants on the Paraná and Uruguay rivers, with others under construction, is set to increase. 3 billion kWh produced in 2003) comes about half from thermal power plants and some nuclear plants that use local uranium. The contribution of the large hydroelectric plants on the Paraná and Uruguay rivers, with others under construction, is set to increase.
Almost all of Argentina’s exports are represented by agricultural products (wheat and wheat flour, corn, linseed) and livestock (meat, wool and skins); imports concern manufactured products (especially iron and steel and mechanical products). The most intense commercial relations take place with the United States and with Latin American (Brazil, Chile) and European (Germany, Spain, Italy, Netherlands) countries.
As far as communications are concerned,the railway structure (consisting of penetration lines poorly connected to each other and converging on Buenos Aires) and the port structure, functional for the export of agro-food products, are ancient and robust. The busiest ports are Buenos Aires and La Plata on the Río de la Plata (cereals); Bahía Blanca, Comodoro Rivadavia (petroleum); Rosario, Santa Fe, Quequén. Overall, the Argentina it has 35,750 km of railways and 230,000 km of roads (in addition to the 4,835 km of the Pan-American Carretera).