Occupying most of the southern half of South America, Argentina extends 3460 km (2150 miles) from Bolivia to Cape Horn. The Andes mountains in the west run north– south, forming a natural border with Chile. To the east they slope down to the fertile central pampas, the region known as Entre Ríos. Agriculture, especially beef, wheat, and fruit, and energy resources are Argentina's main sources of wealth. Politics in Argentina was characterized in the past by periods of military rule, but in 1983 Argentina returned to multiparty democracy.

Most Argentinians of European descent are from recent 20th-century migrations; over one-third are of Italian origin. Iindigenous peoples now form a tiny minority, living mainly in Andean regions or in the Gran Chaco. Argentina also has communities of Lebanese, Syrians, Armenians, Japanese, Koreans, and Welsh.

The vast majority of Argentinians live in cities, with some 40% living in Buenos Aires, one of the largest cities in Latin America.

Catholicism and the extended family remain strong in Argentina. In addition, the family forms the basis of many successful businesses.

Women have a higher profile than in most Latin American states, and were enfranchised in 1947. Today, many enter the professions and rise to positions of influence in service businesses such as the media. The exception is party politics. Eva Perón, who inspired the musical Evita, did help to push women into a more active political role in the 1940s and 1950s, but this trend was reversed under military rule.

Strengths

Rich and varied agricultural base. Powerful agribusiness (mainly beef, soya, wheat, fruit, and wine) and wealth of energy resources. Net exporter of oil.

Weaknesses

End of currency stability based on pegging of peso to dollar. Vulnerability to external shocks and downturns in Brazil (largest single export market). Investors scared by changes in assessment of country risk in emerging markets. Heavy debts, public and private, to refinance. Weak banking sector. Global fluctuations in prices of vital non-oil commodities. High unemployment and risk of unrest. Endemic tax evasion. Subsidies and trade barriers bar agricultural produce from USA and EU.

Profile

The "miracle" recovery of the 1990s was based on stabilizing the peso (by pegging it to the US dollar) and on a combination of neoliberal reforms accompanied by privatization. Argentina rode out the Mexican crisis of 1995, but was hit by damage to foreign investor confidence and a shrinking Brazilian market in 1998–1999. Regional recession in 2001 brought economic crisis, and the world’s largest default on international debt.

Argentina is a multiparty democracy; the president is head of state and government.

Profile

The Peronists dominated politics from the 1940s. The party, founded on mass working-class and left-wing intellectual support, was inimical to the military; coups were staged in 1955, 1966, and 1976. President Carlos Menem won elections in 1989 on a populist platform but steered the Peronists toward a right-wing free-market agenda. The UCR tended to stay in opposition, only winning when the electorate wished to register a protest vote, as in 1983. In 1999 it captured the presidency as part of a tenuous center-left alliance with FREPASO. However, President Fernando de la Rúa was brought down by the economic crisis of 2001 and the Peronists, the largest party in the legislature since the mid-term elections, got their candidate Eduardo Duhalde installed as interim president until 2003.

Main Political Issues

The legitimacy of the political system

A shaky coalition of the main parties charged the Duhalde caretaker administration in January 2002 with rescuing Argentina from the worst economic and social crisis in a generation before handing power to an elected successor in 2003. From the outset his stabilization project was threatened by the unprecedented rejection of the political system, manifested in the waves of protest that had deposed the de la Rúa government and resulted in three stopgap presidents prior to Duhalde's appointment. Public opinion pointed to a major shake-up to restore public confidence in politicians, the judiciary, and business.

Economic crisis

Keeping the peso pegged to the dollar was blamed for prolonging economic recession and was ditched by Duhalde. The severe effects of industrial collapse and fiscal austerity, coupled with hated restrictions on bank withdrawals to defend the peso and head off inflation, hit domestic consumption and reduced a near cashless population to bartering goods. The IMF, however, made the release of funds dependent on fiscal, debt, and exchange rate performance.

Argentina takes a pro-Western stance and has deployed its armed forces in a series of UN actions. Solid relations with potential aid donors and trade partners were made all the more essential following the collapse of the Argentine economy in 2001. Ties to the USA are strong, although US pressure for an open-skies agreement and demands for royalty payments on patented drugs create some tensions.

Friction with Brazil over trade rules complicates Argentina's membership of Mercosur. It wants Mercosur to be strengthened, and widened to include Chile as a full member.

The normalizing of relations with the UK in 1998 sidelined Argentina's claim to sovereignty over the Falklands Islands (known locally as Las Islas Malvinas), the focus of the 1982 war between the two countries.

In 2002, Argentina requested the extradition of former Bolivian president Hugo Banzer (who later died) in relation to Plan Cóndor which saw thousands kidnapped and murdered under military regimes in Argentina, Chile, and Bolivia in the 1970s.

The end of dictatorship led to trials and prison for the top brass, but subsequent immunity laws were meant to placate the military and close the chapter on the "dirty war" (1976–1983), during which some 15,000 to 30,000 were killed or "disappeared." The military made public admissions of guilt in 1995. A 2001 ruling in a kidnap and murder case, however, said that such immunity was unconstitutional and cleared the way for the trial of many more military personnel for human rights crimes. Former dictator Gen. Galtieri was arrested in 2002. The armed forces now see themselves as modernized, participating in UN peacekeeping and cooperating on defense within the framework of the Mercosur trade bloc (Brazil, Argentina, Uruguay, and Paraguay).

Known oil and gas reserves are still underexploited, and copper and gold mining are just taking off; only one-third of the country has been properly surveyed. Wheat, maize, and oilseeds drive exports rather than beef, trade in which has stagnated while its image has been weakened by foot-and-mouth disease.

Environmental protection has low governmental priority. Legislation is weak and largely ignored by states which retain a good deal of autonomy. Political parties typically shy away from the level of public spending needed to tackle major environmental problems, and a corrupt judiciary had meant poor enforcement of existing laws. Key problems are hazardous waste, poor urban water and air quality and inadequate sewers, pesticide contamination due to agribusiness, deforestation, and illegal hunting.

Air travel is expensive, and inadequate connections between provinces frustrate business and tourism. The national airline, Aerolineas Argentinas, was privatized in 1990 but in 2000 was the object of a rescue plan; the 37 airports are privately operated. The privatized railroad, one of the largest in the world, is primarily used for freight, but Buenos Aires' subway and commuter lines have attracted strong investment and heavy use. Some 9500 km (6000 miles) of roads are privatized, and tolls are among the highest worldwide. The six main terminals in the port of Buenos Aires are privately run. A $20 billion national infrastructure program announced in 2001 has been stalled due to economic crisis.

Buenos Aires has 33 hospitals, but free state provision suffers from underfunding, poorly paid staff, and long queues. Government-sponsored vaccination, mother-and-child schemes, feeding programs, and rural health projects barely tackle such problems in the poorest provinces as malnutrition, lack of decent water and sewers, and threadbare medical cover. A health care deregulation bill was decreed in 2001 to dismantle trade unions' monopoly of health insurance schemes.

Public schooling is free and compulsory to the age of 14. Huge numbers of poor students drop out of the education system near or after this age, and 60– 70% of middle-class students drop out by the close of five-year courses at cash-strapped free state universities. A fifth of government spending on education finds its way to private institutions.

Half of Buenos Aires households own a gun for fear of violent crime. Law enforcement in the interior is weak. The judiciary and the police command little respect. Overcrowded prisons lead to frequent riots and criminal cases can take over a year to reach court.

Members of the wealthy elite, who travel in private jets to estancias (country estates), vacation in Europe and the USA, and hold dollar accounts offshore to avoid tax, escaped the worst of the economic collapse in 2001–2002. Middle-income groups squeezed after years of free-market reforms lost out in the crisis which forced some 15 million below the poverty line, with four million in extreme poverty. Emergency government aid offered in 2002 to one million unemployed people with children under 18 was at a level below half the legal minimum salary. The precrisis figure of some 40% of workers in the low-wage black economy was set to balloon. Millions of cashless and poor people resorted to exchanging goods at barter clubs.

Tourism has been undersold, and the government, working with business, has launched a massive international marketing campaign. Visitors, still mostly from neighboring countries, are attracted by Buenos Aires' rich city life, the fashionable Atlantic coastal resort of Mar del Plata, ski stations such as Bariloche and Las Leñas in the Andes, and wineries around Mendoza. Other major attractions are the Iguazú National Park, Antarctic cruises, and the renowned whale-watching hot spot off Peninsula Valdés.

The Spanish first established settlements in the Andean foothills in 1543. The indigenous Amerindians, who had stopped any Inca advance into their territory, also prevented the Spaniards from settling in the east until the 1590s.

• 1816 United Provinces of Río de la Plata declare independence; 70 years of civil war follow.
• 1835–1852 Dictatorship of Juan Manuel Rosas.
• 1853 Federal system set up.
• 1857 Europeans start settling the pampas; six million by 1930.
• 1877 First refrigerated ship starts frozen beef trade to Europe.
• 1878–1883 War against pampas Amerindians (almost exterminated).
• 1916 Hipólito Yrigoyen wins first democratic presidential elections.
• 1930 Military coup.
• 1943 New military coup. Gen. Juan Perón organizes trade unions.
• 1946 Perón elected president, with military and labor backing.
• 1952 Eva Perón, charismatic wife of Juan Perón, dies of leukemia.
• 1955 Military coup ousts Perón. Inflation, strikes, unemployment.
• 1973 Perón returns from exile in Madrid and is reelected president.
• 1974 Perón dies; succeeded by his third wife "Isabelita," who is unable to exercise control.
• 1976 Military junta seizes power. Political parties are banned. Brutal repression during "dirty war" sees "disappearance" of over 15,000 "left-wing suspects."
• 1981 Gen. Galtieri president.
• 1982 Galtieri orders invasion of Falkland Islands. UK retakes them.
• 1983 Pro-human rights candidate Raúl Alfonsín (UCR) win presidency in free multiparty elections. Hyperinflation.
• 1989 Carlos Menem (Peronist) president.
• 1992 Iinflation down to 25%.
• 1995 Economy enters recession.
• 1998–1999 Argentina weathers financial crisis in Brazil.
• 1999 Fernando de la Rúa of UCR–FREPASO alliance elected president.
• 2001 Weakened by corruption scandals, government is brought down by economic crisis.
• 2002 January, Eduardo Duhalde appointed president by Peronist-dominated Congress.