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Argentina: Latin American Promise Land, or Another Mexico?
Argentina: Promise land, or Another Mexico?
A thriving republic in what was once known as “America's back yard”, Argentina emerged from the 20th century in near ruin. High inflation, a crippled economy, and trade deficits resulted in a parade of governmental turmoil that seemed to have no end. Plagued by corruption, military junta, and the “Dirty War”, Argentina has had more political figureheads than a deck of cards.
After some much deserved house-cleaning and several years of economic restructuring, Argentina looks to be on the verge of reclaiming it's former glory as one of the wealthiest nations in the world. Despite this progress, economic and political advisers fear the worst may not yet be over, as major challenges still remain. Will Argentina continue to be a leader in Latin America? Or will it's already shaky foundation finally give in to the tremors of world events and problems at home?
A Troubled Past
Founded as a Spanish colony, a localized government was established in 1861, after the drafting of a constitution in 1853. Since then, power has shifted back and forth from forms of democratic government to military rule, with the current Argentine Republic (at least in a democratic form) making a comeback in 1983. Swift reforms were made by then-President Raul Alfonsin to undo the damage left by the military junta, reorganizing and solidifying the power of democratic organizations within the governmental system.
High inflation and a weak economy were working against him, however, and another shift in political power replaced Alfonsin with Carlos Menem, who vowed to solve the countries crippling financial situation. In a way, Menem succeeded, overhauling the markets, simplifying legal procedures, and privatizing much of the economy.
Like his predecessor, Menem soon fell out of favor, this time as a result of corruption in his administration. Upon leaving office, Menem left huge trade deficits caused by his decision to peg the Argentine peso to the U.S. dollar, causing poverty and a sour political situation for those to follow him.
The Argentine Economy is in Recovery, but Unstable
In 2003, Nestor Kirchner became President, initiating a series of reforms aimed at restoring faith in government and lessening social tensions, raising the minimum wage, and boosting salaries. Kirchner received a massive popularity boost as the Argentine economy made a comeback, but his administration also contributed sharply to inflation.
The republic is currently led by President Cristina Fernandez de Kirchner, wife of former president, Nestor Kirchner, who opted to throw his support behind her political campaign instead of seeking re-election. Mrs. Kirchner largely based her campaign on the accomplishments of her husband, but had a strong political career as a senator before becoming president in 2007. She is Argentina's first female president, and secured the largest percentage of votes in any Argentine election since 1983.
Stretching over 4000 kilometers from north to south, Argentina boasts one of the most vibrant economies in Latin America, having rebounded dramatically from its money troubles in the past. Argentina is abundant in natural resources, and maintains a well-educated workforce of 16.7 million.
However, despite the recent turn around for the Argentine economy, problems still remain. 30% of the population in below the poverty line, and 7.2% are unemployed. The annual budget is $109 billion, but annual spending is $118 billion, creating a spending deficit. National debt is approximately $136 billion, and though the economy has recovered from the Great Recession, inflation rates and uncertainty could undo much of that progress.
Drugs, Territory, and Growing Corruption
Though the dark shadow of economic collapse is the main point of worry for Argentinians, there are other issues for the troubled republic to deal with. Transnational disputes with Britain over the Falkland Islands have led to war in the past, and recent oil discovery offshore may provoke further conflict. A war would certainly harm the current administration's approval, and with such a long history of upstaging political leaders, such disfavor would certainly lead to drastic reform.
In addition, Argentina is a major hub for illegal drug trafficking. Partly because of it's strategic geographic location, and partly because of it's relationships with Europe and the U.S., Argentina is the haven-of-choice for dealers.
From Argentina, mass quantities of cocaine are shipped off to Europe, ephedrine and pseudoephedrine to Mexico, and heroin to the United States. Corruption in the ranks of law enforcement and easy access to chemicals needed for drug manufacture only exacerbate this problem, and the potential for drug trading to strain Argentina's healthy relations with other nations is not to be taken lightly.