Córdoba's diversified economy generates opportunities

Located in the centre of the country and imbued with a rich history and the benefits of a productive climate and soil, the province of Córdoba has developed a multi-pronged economy that is resilient to external shocks. This includes an agriculture sector undergoing modernisation, a value-added food industry and an automotive manufacturing segment that significantly contributes to economic growth and local employment. Posting a GDP per capita of $9288 in 2017, Córdoba is among the top provincial contributors to national GDP, at 7.9%.

Cultural Wealth & Diversity

In terms of area, Córdoba is the fifth-largest province in Argentina, encompassing 165,321 sq km of land, and is the second-most populated with nearly 3.3m inhabitants. Around 40% of its population is concentrated in and around the capital city of Córdoba where 1.33m citizens reside, making it the largest urban agglomeration in the country, second only to the Greater Buenos Aires area.

Argentines have long known the Province of Córdoba by its nickname, La Docta (the Learned One), since the National University of Córdoba is the oldest university in the country, founded by the Jesuits in 1613. To date, the province has had 160,000 students enrolled in the 13 universities across its territory, including the recently opened Provincial University of Córdoba, founded in 2007.

A notable influence that helped to develop Có rdoba’s identity – and that of Argentina as a whole – is the rich history of immigration from countries such as Spain, Italy, Poland and Germany, among others, forming what is now a heterogeneous population. In recognition of the origins of the province’s populace, the Ministry of Education of Córdoba offers schools a cultural programme called La Historia de Nuestros Abuelos (The Story of Our Grandparents) so that students may learn more about their personal heritage as well as the history of the region.

Productive Landscape

A combination of fertile soil and a subtropical Mediterranean climate has allowed Córdoba to become a top-ranked region in a number of agricultural statistics. In the growing season of 2015/16 Córdoba was the top maize producer in the country, at 30.8% of national production, and the second-largest soybean producer, at 30.5%. Có rdoba also played an important role in the production and preparation of 90.1% of the peanut harvest of Argentina during the same growing season.

Local Governance

Córdoba has a unique administrative and organisational structure. Like other provinces, it is autonomous from the federal government. Since 1999 Unión por Córdoba has been the ruling party, with alternating governors: Juan Schiaretti and José Manuel de la Sota. This has allowed the province to implement long-term financial and industrial policies that have formed the basis for sustainable growth. For example, in 2004 the legislature passed an investment promotion policy, forming what would become the province’s technological cluster – a development that now includes 177 companies that together make a crucial contribution to the sector at the national level. The province has a one-chamber legislature.

Economy

The province has a highly diversified economy, along with a balanced participation of productive activities. “Between 2003 and 2008 the province of Córdoba experienced a sustained GDP growth rate, averaging more than 6% per year,” the OECD noted, while between 2011 and 2015 Córdoba reached 4.9% annual real GDP growth, compared to Argentina’s average of 1.5% during the same period.

The province’s GDP is spread across sectors and is distributed as follows: the productive sectors at 24%, real estate at 18%, the primary sector at 13%, the industrial sector at 13%, financial services at 11%, trade at 11%, and transport, storage and communications at 10%. In an interview with OBG, Roque Martín Spidalieri, Córdoba’s secretary of finance at the Ministry of Public Works and Finance, said that this equilibrium has encouraged continued resilience against potential crises, whereby any sector that experiences a contraction would be offset by the solid performance of others.

As a result of this economic matrix, the province has seen growth rates that outperform other provinces and the national average.

The provincial economy is also export-oriented, which has supported efforts to add value to production. In 2016 manufactured goods accounted for 64% of the province’s exports – divided between agricultural manufacturers (50%) and industrial manufacturers (14%) – while primary production accounted for the remaining 36%.

By value, exports reached $8.4bn. Córdoba’s share of Argentina’s total exports was 14.6%, placing the province within the top-three exporting regions in Argentina, together with Buenos Aires and Santa Fe. Córdoba products made their way to around 150 countries during 2017, with the following countries being the top-10 clients: Brazil (11%), China (10.6%), Vietnam (8.5%), the Netherlands (5.9%), Chile (4.4%), Algeria (4%), India (3.9%), Egypt (3.7%), Indonesia (3.4%) and the US (3.2%).

Financial records also show that Córdoba has fiscal sustainability, its solvency having been built up over 15 years of fiscal responsibility, with a low level of indebtedness, at 6.1% of provincial GDP for 2015, the most recent figures available.

Sustainable Planning

Córdoba’s public management model takes into account three key points: The province pays close attention to environmental, social and economic dimensions. Indeed, since 2008 local authorities have been working on a new management model, and unlike the federal government of Argentina, the province of Córdoba reached out directly to the OECD for their recommendations.

It was during 2008 that the Ministry of Finance of Córdoba became the first public institution in the world to have reported financial and social responsibility utilising the Global Reporting Initiative (GRI) G4 methodology, an international reporting guideline for sustainability and financial information. Córdoba’s government is the only public institution in Latin America to have their reporting confirmed multiple times at the G4 level.

Other local ministries followed piecemeal until, upon his return to the governorship in 2015, Schiaretti decided to unify these initiatives under the purview of the UN’s 17 Sustainable Development Goals (SDGs). The SDGs proposed by the UN also offer indicators for governments to measure progress. Notably, the province is the first subnational state in the world to integrate all of its management efforts under the GRI methodology.

The planning and control systems of the province are integrated into its budgeting process, and this has a strong impact on the implementation of public policies. The province’s strategic objectives have well-defined plans, and these plans and initiatives have a corresponding budget impact.

Transparency

The province’s commitment to transparency and sustainability has recently been recognised at the national level, with Córdoba receiving tops ranking on the following metrics: the “Index of Provincial Budget Transparency 2016,” issued by the Centre for the Implementation of Public Policies for Equality and Growth; the “Provinces Fiscal Visibility Report 2015,” issued by the Argentinian Institute for Fiscal Analysis; and the “Report on the Argentinian Fiscal Information: Fulfilment of the Law of Fiscal Responsibility 2015,” which was issued by the Argentinian Association of Budget and Public Financial Administration.

Tourism

Tourism is a growing contributor to the economy, with the province of Córdoba accounting for 1.8% of overnight stays by foreigners in the country during 2017, according to data from the Hotel Occupancy Survey of the National Institute of Statistics and Census (Instituto Nacional de Estadística y Censos, INDEC). This registered a slight improvement in the first five months of 2018 – an increase that can be attributed to improvements made in air connectivity throughout the country, with important developments in airport infrastructure made under the Aeroplane Revolution programme launched by the Ministry of Transport. According to the Survey of International Tourism, carried out by INDEC, during the first five months of 2018 foreigners arriving to Argentina by air grew by 5.8% year-on-year. When looking at the airport in Córdoba, specifically, this growth rate jumps up to 28%, albeit from a small base. The province’s airport welcomed 3% of all arrivals to the country by air in the first five months of 2018, while the Ministro Pistarini International Airport in Buenos Aires accounted for 90.7% of the total. This suggests significant opportunities for further investment and development of the tourism industry, particularly given growing interest in Có rdoba’s wine tourism routes and other rural tourism offers (see Tourism chapter).

Outlook

Despite the aforementioned achievements, Córdoba has the challenge of remaining one of the most competitive regions in South America. Doing so will necessitate developing infrastructure for further expansion, sustaining business conditions so companies can thrive, empowering the workforce to support future growth and providing good social conditions for inhabitants of the province. These goals explain its continued commitment to develop gas, electric, rail, road and connectivity infrastructure, as well as its focus on drinking water infrastructure, social initiatives, sewage plants, aqueduct development and similar programmes.