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ARGENTINA began the 20th century as one of the world's 10 richest countries. It ended it as a byword for economic meltdown, with two-thirds of its population living in poverty. The country remains the most developed in Latin America according to the UN, but has seen the standard of living of the majority of the population drop since the late 1990s - and dramatically so since 2001. Poverty has gone hand in hand with unemployment, which in 2002 reached over 20 per cent despite historically never having surpassed 5 per cent.

How did such a devastating regression in development come about? The answer lies in the extreme form of neoliberal policies implemented in the 1990s, which at that point made Argentina the darling of investors and the IMF. After two decades of inflation and insecurity, Argentineans were willing to pay for stability, and drastic neoliberal measures were proposed by then President Carlos Menem as the solution to hyperinflation. But people did not know just how steep the costs would be. Everything of value was privatized, including the state oil company; privatization deals were corrupt and opaque, with little or inactive regulation. The overvalued currency made imports so cheap that national industries collapsed. The prosperity of the early 1990s was built on ever-increasing debt and benefited the very rich most; the middle classes made the most of credit to consume ostentatiously and enjoyed the psychological boost of having a peso worth the same as a dollar.

But increasing numbers of people were falling by the wayside. The thousands collecting cardboard on the streets of Buenos Aires are a new sight - these cartoneros had jobs and social security only a decade ago, and now can barely feed themselves.

Up to the 1970s Argentina had experienced 40 years of prosperity and social inclusion based on import substitution and industrialization. A strong labour movement ensured that workers shared in the wealth of the country and upward social mobility was taken for granted. Poor Italian immigrants could count on their grandchildren attending good quality state education all the way up to university and becoming professionals.

The dictatorship that began in 1976 and murdered or disappeared up to 30,000 people had explicit economic aims: to reduce the power of the working class and reinstate agricultural exports and financial markets as the 'motors' of the economy. The result was the vertiginous growth of inequality. A lasting legacy of the dictatorship was debt, contracted by private business in the main, and taken on by the state. Debt has kept the country dependent on IMF loans and refinancing, made economic instability worse and served as an excuse to reduce social spending.

The terror of the dirty war spurred the creation of a strong human rights movement, and other sectors of civil society have also mushroomed. Many new citizens' organizations were created in the 1990s, including an independent trade union confederation, a new Left political party and scores of charities and campaigning NGOs. The renewed vigour of society and the rejection of politics-as-usual was evident in a popular uprising in December 2001, in protest against economic measures and state repression. Since then Argentina has become more alive to the possibility of social change, particularly as the economic situation improves very slowly for the poor majority seeking work.

Although President Kirchner has said the era of neoliberalism is over, it is not clear what is supposed to be taking its place. Argentina has entered the new millennium with a lot of ground lost in human development, but with a society more assertive in demanding its rights and a more responsive political system.

Marcela López Levy

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Map of Argentina

At a glance

Leader: President Néstor Kirchner.
Economy: Gross national income (GNI) per capita in 2003, $3,650 - under half of what it was in 1999 (Chile $4,390, United States $37,610).
Monetary unit: Argentinean peso.
Main exports: edible oils, animal feed, oil and gas, soya, cereals, motor vehicles. Roughly one-third manufactured goods, two-thirds primary commodities.
Once known as the 'breadbasket of the world', Argentina now imports foodstuffs as more land is given over to GMO soya.
People: 38.4 million. Some 40% of the population can be found in the capital Buenos Aires and the surrounding province. Urban population, 89.9%. People per square kilometre: 13.
Health: Infant mortality, 17 per 1,000 live births (Chile 8, US 7).
Environment: GMO soya has been extensively planted in Argentina, displacing staple crops and leading to deforestation; related concerns include the heavy use of herbicides in aerial fumigation.
Culture: A backwater of the Spanish empire, Argentina was sparsely populated, mostly by indigenous peoples. Mass immigration took place in the late 19th and early 20th centuries - the second largest influx of Europeans after the US. The majority were Italian, then Spanish, but there were also many Eastern European Jews, Lebanese and others. Indigenous people now account for around 3% of the population.
Religion: 90% Catholic, but the majority are non-practising.
Language: Spanish, but many European and indigenous languages are also spoken.

Sources: World Guide, State of the World's Children 2005, UNDP.

Last profiled January 1992

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star ratings

income distribution

INCOME DISTRIBUTION [image, unknown] [image, unknown] [image, unknown]
Inequality has grown dramatically since the late 1980s, although Argentina retains the largest middle class in Latin America; its inequality rating has gone from best in the region to average.
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LITERACY [image, unknown] [image, unknown] [image, unknown] [image, unknown] [image, unknown]
97%, the result of a long-standing emphasis on the importance of education and state provision; the latter is being eroded by cuts in social spending and growing numbers living in poverty.
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life expectancy LIFE EXPECTANCY [image, unknown] [image, unknown] [image, unknown] [image, unknown] [image, unknown]
74 years (Chile 76, US 77). However, Argentina's overall Human Development Index rating declined between 2000 and 2002. 1992 [image, unknown] [image, unknown] [image, unknown] [image, unknown] [image, unknown]

POSITION OF WOMEN [image, unknown] [image, unknown] [image, unknown]
A third of parliamentarians are women, and over 50% of professional and technical workers. But abortion is taboo, while domestic violence is widespread and not tackled by police or judiciary.
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position of women
FREEDOM [image, unknown] [image, unknown] [image, unknown] [image, unknown] [image, unknown]
There is no censorship or political violence, although 'trigger happy' police violence is a serious problem. The protests of 2001 have seen an explosion of alternative media and critical publications.
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SEXUAL MINORITIES [image, unknown] [image, unknown] [image, unknown]
Homosexuality: Legal, though lesbians and gay men are banned from the armed forces. Gay marriages are legal in Buenos Aires. Gender reassignment performed without prosecution. But still a deeply homophobic culture.

life expectancy


NI Assessment [image, unknown] [image, unknown] [image, unknown] [image, unknown]
The Kirchner Administration is Left-Peronist, the first Government openly to criticize the neoliberal model first implanted in 1976 and its social consequences. But there is no radical programme, rather a gradual process of reform of privatizations and social policies. Kirchner has attracted international attention for keeping the country in default and negotiating hard to reduce the value of debt owed. The combination of progressive policies, particularly in relation to human rights, and economic growth keeps his popularity very high.

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