Painful economic reforms have stimulated rapid economic growth, but economic and social stability remain elusive
To the west, Argentina is bounded by the southernmost section of the Andes, but most of the country is a vast plain that descends gradually eastwards to sea level. The north-eastern part of this plain includes semi-tropical forests and Argentina's section of the arid Gran Chaco region, while to the south lies the semi-desert tableland of Patagonia. But it is the rich agricultural area of the central plain, the pampas, that is home to two-thirds of the population.
Argentines are of European descent, predominantly Italian. The country was originally settled by the Spanish who optimistically named it ‘land of silver’. In fact, the territory had few precious metals though good prospects for agriculture. The largest wave of immigration, from the 1880s to the early years of the 20th century, brought people to work on the farms and ranches of the pampas. Around half were Italian, and most of the rest Spanish, though there were also Welsh who settled in Patagonia, as well as English investors and managers who developed many of the roads and railways. There are now few descendants of the original Indian inhabitants.
During its peak years of immigration Argentina was among the ten richest countries in the world, and a land of immense promise. But long decades of political upheaval and social stagnation have stifled development. As a result of a series of economic crises in the 1990s, many people left the country: more than half a million Argentines now live abroad.
In many ways Argentina still has great potential. It has rich agricultural resources. Cattle ranching, the basis of its early wealth, still provides substantial export income and beef remains a mainstay of the diet. Argentines eat 57 kilos each per year, three times as much as Europeans. In recent years the fertile soils of the pampas have also permitted a rapid increase in cereal and oilseed exports. However, agriculture now only employs around 8% of the workforce and has been subject to increasingly heavy taxation.
By the mid-1990s the major export was oil and the country is still a significant producer though largely for local use. Argentina is also an important source of natural gas which it exports to neighbouring countries, notably Brazil and Chile.
Argentina is also a major manufacturer. The opening up of the economy in the 1990s boosted productivity, and output has increased substantially. The food industry, for example, was previously the preserve of family firms but has gradually been penetrated by multinationals such as Nabisco and Cadbury.
This was accompanied by other free-market reforms, including privatizing banks and the national airline. This encouraged foreign investors and delivered growth but also exposed Argentina to international capital markets. By 2001 Argentina was again in crisis and defaulted on some of its international debt. Subsequently, helped by a boom in commodity exports, growth revived until the 2008 global economic crisis.
The legacy of Juan Peron and Evita
Historically Argentina's politics has been dominated by ‘caudillos’, strongmen. One of the most significant was General Juan Peron. Peron was a populist, who, with the support of his charismatic wife, Evita, took over as president in 1946. He worked closely with the strong labour unions and nationalized many industries, rising to semi-mythical status. The Peronist party is still a significant force.