V.

Economy

Argentina was long one of the most prosperous nations in Latin America. Its prosperity originated with agriculture in the Pampas, the economic heartland of the country. Argentina is one of the world’s leading cattle- and grain-producing nations. Manufacturing grew substantially in the mid-20th century. Argentina’s economy in that period was based on the production and export of agricultural products and livestock, machinery and manufactured goods, fuels and chemicals, and minerals. Since the 1980s, however, nonindustrial activities such as financial services, tourism, commerce, and telecommunications have grown considerably.

At the beginning of the 21st century, Argentina faced considerable economic difficulties. In the 1990s the government changed the primarily state-controlled economy to one that was mostly privately controlled. Successive global and domestic crises battered the Argentine economy and contributed to its instability. In addition, declining domestic tax revenue from a global economic slowdown created a drag on the economy. In 2002 the economy collapsed as Argentina defaulted on its public debt, froze bank accounts, and devalued the peso by 30 percent.

Argentina’s national budget in 2004 had revenues of $27.8 billion and expenditures of $28 billion. Argentina’s gross domestic product (GDP) in 2005 was $183.2 billion.

A.

Labor

In 2005 the total labor force numbered 18.4 million. In 2005 services employed 75 percent of the workforce, while industry employed 24 percent and agriculture, forestry, and fishing employed less than one percent. The movement in the 1990s to privatize many public companies in Argentina changed the structure of Argentina's labor force. In 2000 approximately 1 million people were employed in the public sector (federal, provincial, and municipal levels), compared to 5.1 million in 1991. Employment in the private sector increased from about 8.1 million in 1991 to more than 12 million in 2000.

Most of Argentina’s 1,100 labor unions are affiliated with the Confederación General del Trabajo (General Confederation of Labor), known as the CGT. The government suspended the right to unionize in 1976, but restored it in 1982. The labor movement included nearly 4 million workers by the late 1990s, with the highest participation rates in the manufacturing sector. By the late 1990s privatization programs had resulted in the loss of hundreds of thousands of jobs and a national unemployment rate of 15 percent in 2000. Unemployment in Buenos Aires had risen to more than 25 percent by the end of 2002.

B.

Agriculture

Argentina’s agricultural output not only fills the nation’s domestic needs but also provides exports for foreign markets. Of Argentina’s land area of about 274 million hectares (about 676 million acres), 10 percent is cultivated, 12 percent forested, and about one-half is used for pasturing cattle and sheep. The most important agricultural zone of the country is the Pampas, where wheat and other cereal grains are grown. Irrigated areas, from the Río Negro north through Mendoza, San Juan, Tucumán, and San Salvador de Jujuy, are rich sources of fruit, vegetables, sugarcane, and wine grapes.

Livestock raising and slaughtering are major enterprises in Argentina, as are the refrigeration and processing of meat and animal products; total annual meat production is about 3 million metric tons, three-quarters of it from cattle. In 2005 there were some 50.8 million head of cattle, 12.4 million sheep, and 1.5 million pigs in Argentina. In addition, there were about 3.7 million horses; Argentine horses have won an international reputation as racehorses and polo ponies.

Livestock exports play an important role in foreign trade. Earnings from meat, hides, and live animal exports in the early 21st century were about $1.9 billion annually, or about 7 percent of total export earnings. Argentina has long ranked as a world leader in the export of raw meat. Cooked and canned meats are also increasingly important exports.

Argentina also produces and exports large quantities of wool; in 2005, 60,000 metric tons of wool were produced. The Patagonia region is home to about 40 percent of all sheep in Argentina.

Wheat is Argentina’s most important crop. The country is among the major producers of wheat in the world. In 2005, the wheat crop totaled 16 million metric tons. Other major cash crops were maize, soybeans, and sorghum. Other major field crops include barley, sunflower seeds, sugarcane, potatoes, rice, and tobacco, as well as grapes, oranges, apples, lemons, and grapefruit.

C.

Forestry and Fishing

Situated mainly in mountain areas distant from centers of population, Argentina’s 33 million hectares (81.6 million acres) of forest are relatively unused. Among the most harvested trees are elm and willow, for cellulose production; white quebracho, for fuel; red quebracho, for tannin (used for tanning leather); and cedar, for the manufacture of furniture. Other economically important trees are oak, araucaria, pine, eucalyptus, and cypress.

Argentina’s fisheries, potentially highly productive, have not been fully exploited, although production has increased steadily since the 1960s. In 2004 the catch was 953,260 metric tons. Argentine hake and squid are an important part of the catch.

D.

Mining

Although Argentina has a variety of mineral deposits, mining has historically been of only modest importance to the nation’s economy. Since the 1990s, however, production of petroleum and natural gas has increased significantly. In 2003 fuel products accounted for 17.3 percent of national exports. In addition to petroleum and natural gas, relatively small quantities of iron ore, gold, silver, lead, zinc, copper, and boron are also mined in Argentina.

In terms of value, the chief mineral product is petroleum. In 2004 production of crude petroleum was 271 million barrels, furnishing the country’s needs and allowing Argentina to become a net energy exporter. Major petroleum reserves are located in Patagonia and offshore near the Falkland Islands (Islas Malvinas). Natural gas production has doubled since the 1980s to about 41 billion cubic meters in 2003, with reserves located mainly in Patagonia and Tierra del Fuego.

E.

Manufacturing

Most industry in Argentina is centered along the Paraná River from Rosario to the city of Buenos Aires, and industry employs 24 percent of the national labor force. The country’s oldest industry is the processing and packaging of foodstuffs. By the early 1990s the production of petroleum products had exceeded food processing in value. Other important manufactured goods are motor vehicles; consumer goods such as refrigerators, washing machines, and television sets; pharmaceuticals and cosmetics; electronic equipment; and fibers.

F.

Energy

Although most rivers and falls with potential energy are located far from industrial centers, Argentina is developing its water resources at a rapid rate. Major hydroelectric projects include the Yacyretá Dam on the Paraná River (in cooperation with Paraguay) and the Salto Grande on the Uruguay River (in cooperation with Uruguay). The first of 20 generators at Yacyretá, one of the world’s largest hydroelectric facilities, was activated in 1994, but cost overruns, corruption, environmental problems, and construction delays slowed the completion of the project considerably. In early 2005 the governments of Argentina and Paraguay agreed to complete the Yacyretá hydroelectric project by 2008.

While most electricity is generated by hydroelectric or thermal power plants, Argentina has one of the most advanced nuclear energy programs in Latin America, providing 8 percent of the country’s electrical needs. Overall, Argentine power plants generated 83.3 billion kilowatt-hours of electricity in 2003.

G.

Currency and Banking

Argentina’s currency is the peso argentino, consisting of 100 centavos. The Central Bank, which was established in 1935 and came under government control in 1949, functions as the national bank and has the sole right to issue currency. After an economic collapse Argentina in 2002 abandoned a law that had pegged the peso to the U.S. dollar on a one-to-one basis. The peso was devalued by 30 percent and allowed to float freely.

H.

Commerce and Trade

The trade balance tends to be favorable to Argentina when world demand for food is high. The country’s exports were worth $29.6 billion in 2003. Exports are principally animals and animal products, including meat, hides, and wool; grains, including wheat and corn; oilseed; petroleum products; and automobiles. Imports are typically machinery and equipment, chemicals, metals, and airplanes and other vehicles; in 2003 imports cost $13.8 billion. Chief purchasers of exports are Brazil, the United States, Chile, China, Spain, Italy, Netherlands, and Uruguay; leading sources for imports are Brazil, the United States, China, Germany, Italy, Japan, and Spain.

Argentina is a member of the Latin American Integration Association (LAIA, known in Spanish as Asociación Latinoamericana de Integración, ALADI), which governs regional trade. It is also a member of the Southern Cone Common Market (also known by its Spanish acronym, MERCOSUR). Founded in 1991, MERCOSUR eliminates tariffs on many goods traded between Argentina, Brazil, Paraguay, and Uruguay. A large portion of Argentina’s imports and exports are with its MERCOSUR partners. Chile is also an important trading partner with Argentina and other members of MERCOSUR.

I.

Tourism

Argentina has a number of tourist attractions, but the country’s distance from Europe and the United States has limited the development of the tourism industry. Even so, several million tourists visit Argentina each year. The top destinations are Buenos Aires, the Andes and the lake district around Bariloche, and Patagonia. Buenos Aires is a vibrant, sophisticated city that offers many urban pleasures and has long prided itself on being the “Paris of South America.”

Adventuresome travelers may choose to travel through Patagonia on horseback, stopping to fish and camp out, or hike in the Andes Mountains. Skiers flock to resorts in the mountains to enjoy their sport during Argentina’s winter months of June, July, and August. The lake district and Atlantic beaches draw Argentineans as well as visitors from abroad. Iguaçu Falls, on the border with Brazil, is another popular tourist site. National parks preserve many of the country’s natural wonders.

J.

Transportation

The government of Argentina owned and operated the entire Argentine railroad system from 1948 until 1992, when it privatized most of the rail system. By 1994 the government had privatized most of the state-owned freight rail network and transferred several of the intercity passenger services to provincial control. The system has a total length of 35,753 km (22,216 mi). Only one functioning line crosses the Andes, providing a connection with northern Chile; railroad links also connect Argentina with Bolivia, Paraguay, Uruguay, and Brazil, although direct services are not possible because of differences in operating gauges. As a result of privatization, passenger service in many areas of the country is no longer available.

Aerolíneas Argentinas, once the national airline and now part of Spain’s Iberia Airlines, is Argentina’s largest air carrier. It operates flights within Argentina and to international destinations. There are also several smaller, domestic airlines. Argentina has about 11,000 km (about 6,800 mi) of waterways along navigable rivers, especially those in the Paraná region. The most important waterway development project in the region is the Hidrovía system, which links waterways in the Pantanal lowlands of Brazil with the Paraguay, Paraná, and Uruguay river systems.

The combined length of all roads and highways is 215,471 km (133,887 mi). A variety of private companies operate toll roads throughout Argentina, with freeways located primarily in and around the Buenos Aires metropolitan region. In 1998 there were 140 passenger cars for every 1,000 people in Argentina.

A network of private buses, subways, and suburban railroads serves the Buenos Aires metropolitan area. Both the subway and railroad systems have been privatized, and improvements in service frequency and quality have led increasing numbers of passengers to use public transportation. No other city in Argentina has a suburban rail or subway system.

K.

Communications

The government maintains a system of postal services throughout the country. In the early 1990s the number of telephone lines in service grew significantly when the government privatized the telecommunications sector. By 2005 there were 227 telephone mainlines in use for every 1,000 persons. There were 681 radios and 292 television sets in use per 1,000 people in 1998. Since 1990, use of the Internet has grown rapidly, as has cellular phone usage.

Argentina has more than 30 daily newspapers; the principal ones are published in Buenos Aires and circulate throughout the country. La Prensa and La Nación are famed internationally for their independent views and objectivity. Other leading Buenos Aires papers are Clarín, Crónica, Página 12, and La Razón. Argentina’s only English-language newspaper is the Buenos Aires Herald. The provincial capitals and other secondary centers all have daily papers with strong local followings. A number of magazines containing both news and features are published in Buenos Aires and circulate throughout the country.