Argentina seeks to unlock natural resource potential

Argentina is a land of rich cultural and national heritage, and significant geographical diversity, which attracts visitors from around the world. The strategic importance of the country’s capital, Buenos Aires, whose port remains a significant trading centre both regionally and internationally, became the administrative centre of the Viceroyalty of Peru under Spanish rule in the late 18th and early 19th century.

Today, despite being one of the largest economies in Latin America, Argentina has suffered serious economic crises over the past two decades, which have stymied its growth, constricted foreign direct investment into its productive sectors and limited the country’s ability to harness its vast natural resources.

The country’s economy is driven by the oil and gas industry, boasting significant onshore, offshore and shale oil and gas reserves, alongside its agricultural and livestock industries. According to the World Bank, in 2017 the country’s GDP was $637.6bn, up 2.3% from the previous year. Argentina ranked 45th out of 188 countries in the UN’s 2016 “Human Development Report”, and second in Latin America behind Chile, in 38th place. Health care and education have seen significant investment over the past decade, and account for around 7% and 6% of GDP, respectively. On the regional and global stage Argentina has a high profile, where it currently chairs the G20 and is an observer member of the Pacific Alliance, while aspiring towards OECD membership. However, with the government having been granted a $50bn bailout from the IMF in June 2018, the spectre of economic crisis and indebtedness looks to have reappeared, just at a time when investors appeared to be showing renewed interest in the country following the election victory of pro-business President Mauricio Macri in October 2015.

History

Argentina has a rich heritage of human habitation and activity, and has 35 indigenous ethnicities, which include the Aonikenk, Kolla, Qom, Mapuche and Guarani peoples, who currently make up around 2.3% of the population. The native peoples suffered conquest by the Incas in the late 15th century, and then by the Spaniards the following century. Buenos Aires, the country’s capital, was founded in 1536 and was ruled under the Viceroyalty of Peru before becoming the Viceroyalty of the Río de la Plata in 1776. The country declared independence from Spain in 1810 as part of a wave of independence movements across Latin America that included Peru, Bolivia, Chile and Mexico. Following this, a federal state was founded in 1853, now known as the Republic of Argentina. Post-independence also saw Argentina receive successive waves of European immigrants, especially from Italy, evidenced by the large number of Italian surnames to be found in the country today. Before and after the Second World War immigration swelled once more.

Cultural Heritage

Argentina’s most famous cultural product is the traditional dance of tango, which was added to UNESCO’s list of Intangible Cultural Heritage in 2009. Tourism packages often include a visit to a tango show, and there is a proliferation of bars and theatres in which tango is performed, while Buenos Aires hosts the World Tango Festival each year in August. The city boasts unique museums, such as the Buenos Aires Museum of Latin American Art, known as MALBA, which showcases permanent and temporary exhibitions, and has a thriving theatre and live music scene. The capital also hosts the annual Buenos Aires International Book Fair in October, one of the largest in Latin America, reflecting both the importance of Argentina’s publishing industry and the huge influence of its authors, such as avant-garde writers Jorge Luis Borges (1899-1986) and Julio Cortázar (1914-84), and contemporary authors such as Andrés Neuman, Rodrigo Fresán and Alan Pauls, many of whose works are translated into English and offer important insights into the Argentine psyche. Many visitors to the capital also pay a visit to the legendary Boca Juniors football club, which local and national hero Diego Maradona helped to win the league title in 1981 before his move to Barcelona. In October 2018 sports fans will be descending on Buenos Aires for the Youth Olympic Games.

Outside of the capital, the country offers a wealth of sites to explore, with 10 national parks on offer including Iguazú Falls, the second-largest waterfall in the world; Península Valdés, home to the endangered southern right whale; the bordering desert parks of Ischigualasto and Talampaya; Los Glaciares, the site of the Perito Moreno glacier near Calafate; and the picturesque lakeside town of Bariloche in the south. Argentine cuisine is characterised by succulent cuts of prime beef and fine local wine, and food and drink lovers flock to the wine-growing region of Mendoza in the west of the country.

Languages & Religion

Spanish is the official language but indigenous languages, such as Mapudungun and Quechua, are still widely spoken. In terms of religious identification, which does not necessarily reflect those active in religious practice, the majority of Argentines are Catholic, at 70%. Other religions, include Protestantism, which makes up around 9% of the total; Islam, which makes up 1.5%, Judaism, with 0.8%; other religious groups at 2.5% and the remainder with no declared religion, according to figures from the US Department of State.

Demographics

In 2017 Argentina’s population was 44.3m, according to the World Bank, with the country’s population growth rate remaining relatively static over the past decade. Some 39% of the population is between the ages of 25 and 54, while 41.6% is under 25, a factor that should boost the country’s productivity over the coming years as that segment enters the jobs market. Average life expectancy in the country is 76.6 years. The capital city houses one-third of the country’s population, while the northern and central regions are home to the majority of the remaining inhabitants. Patagonia, with its vast expanse of pampas (plains) and rugged coastlines, is the country’s most sparsely populated region.

Geography & Climate

Given its size, Argentina is a land of vast geographical and climatic diversity, where temperatures vary widely. The cold, barren south that becomes sub-Antarctic at its south-western point, contrasts sharply with the warmer hinterlands of the north-east. The Andes form the natural border with Chile in the country’s west, while the country’s north borders Bolivia and Paraguay. The South Atlantic contains Argentinian islands, but ownership of the Falklands, or Malvinas, is still disputed with the UK. While Argentina’s southern portion is a flat plateau, the Aconcagua peak is the highest point in the country and the southern and western hemispheres, lying at 6959 metres above sea level. Laguna del Carbón, a salt lake in the province of Santa Cruz, is the country’s and the southern and western hemispheres’ lowest point, at 105 metres below sea level. Around 10.7% of the country is forested, with agricultural land occupying 53.9%. Temperatures range from between 1°C and 10°C in the extreme south of the country, 11°C-25°C in the centre, and from between 10°C and 21°C in the north, with rainfall across Argentina averaging 591 mm per year. January is the warmest month, falling in mid-summer, with temperatures at their lowest in June and July.

Natural Resources

Argentina boasts rich oil and gas, mineral and agricultural resources. The country’s state oil firm YPF has partnered with global majors to extract oil and gas, both offshore and onshore, and from the Vaca Muerta shale play in Neuquén province. Argentina has South America’s third-largest natural gas reserves, although historically Chile has been dependent on the country’s for its gas imports. Argentina also imports gas from Bolivia to meet its domestic needs, particularly in winter. In addition, the country has rich mineral deposits of lead, zinc, iron ore, uranium, manganese, tin, silver, copper and tungsten, as well as salt deposits, and a significant supply of marble, clay, limestone and granite throughout the country, which it supplies to the construction industry. With vast expanses of fertile land, Argentina is also a world leader in food production, and boasts major livestock and agricultural industries.

Political Framework

As a representative democracy, Argentina’s president sits for a maximum of two, four-year terms elected by popular vote, and although barred from running for a third term, can in theory seek to be elected at a later date. Current President Macri won the 2015 elections in the second round with 51.3% of the vote as leader of the Cambiemos party, which is also in control of Buenos Aires province, including the autonomous city of Buenos Aires, and Mendoza province.

Rival political parties include the Peronist Party and the Socialist Party. The forthcoming presidential election is scheduled to take place in October 2019.