Credit Management October 2022

MESSI and Maradona,
gauchos, the tango,
wine, steak, Patagonia,
and Evita (Eva Perón).
These are just some of
the things that Argentina,
the world’s eighth largest country, is
known for.
There is more, however. Historically
speaking, Argentina witnessed three
centuries of Spanish colonisation before
the country declared independence in
1816. Remarkably, its nationalists helped
revolutionary movements elsewhere. As
Britannica noted, ‘20th-century writer
Jorge Luis Borges observed that, “South
America’s independence was, to a great
extent, an Argentine enterprise.”’
More recently, ‘strong leaders’ such
as Juan Perón (who served three terms
in three decades) and the military
dictatorships of the 1970s and the early
1980s ran the country. But this all ended,
and democracy was reinstated following
Argentina losing a dispute over a set of
islands in the South Atlantic.
The net effect of its recent history, as
summarised by HSBC in an international
business guide on the country, is that ‘a
century ago, Argentina was a prosperous
global power, based on exports of beef and
wheat. However, isolationism and military
rule helped trigger recurring economic
turmoil through most of the 20th century.
This culminated in the major currency
crisis of 2001, leading to international debt
default, austerity, and political chaos.’
A sign of this is the inflation rate that
bubbled around the mid-teens between
2007 and 2014 but which has now risen
above 60 percent. Another sign is the
country’s weakening currency. Divisions in
the Government over economic policy saw
an economy minister resign at the start
of July; the replacement suggests that the
Government may try to spend its way out of
poverty. MoneyWeek reckons that inflation
could hit 73 percent by the end of 2022.
THE COUNTRY
Argentina, whose name is derived from the
Latin word for silver, argentum, is a rich
COUNTRY FOCUS
Argentina derives its
name from the Latin
for Silver. But are there
rich pickings for UK
businesses?
SILVER LINING
AUTHOR – Adam Bernstein
.Floralis Genérica is a sculpture made
of steel and aluminum located in Plaza
de las Naciones Unidas, Avenida Figueroa
Alcorta, Buenos Aires, a gift to the city by the
Argentine architect Eduardo Catalano.
Brave | Curious | Resilient / www.cicm.com / October 2022 / PAGE 16
source of minerals. However, Argentina's
production of cattle and crops, for which
it previously ranked among the richest
countries in the world, has been more
significant. The World Bank, in 2022, stated
that ‘with a GDP of approximately $490bn,
Argentina is one of the largest economies
in Latin America.’ A Deloitte document
from May 2021 cites total exports in 2020 of
$58.88bn and imports of $42.35bn.
As noted earlier, Argentina is the world’s
eighth largest country by landmass (the
second largest in South America), with
some 2.78m sq. km. It sits behind India
with 3.28m sq. km. In comparison, the US
has 9.32m sq. km, Russia some 17.09m sq.
km, and the UK occupies a paltry 242,900
sq. km.
The nation sits at the bottom of South
America on the Atlantic Ocean and is
bounded by Chile to the west, Bolivia and
Paraguay to the north, and Brazil along
with Uruguay to the east. It’s long and
stretches 2,360 miles from the subtropical
north to the subantarctic south, and
measuring 880 miles at its widest. As a
result, Argentina’s geography and climate
vary wildly. Countryreports.org detailed the
variation with ‘humid lowlands of eastern
Argentina, especially along the rivers of
the Rio de la Plata system,’ ‘savannas and
swamps’ in the north, and ‘humid pampa
(plain) and rangeland…that become drier
toward the west’. And there’s the Andes
which include the heavily glaciated and
ice-covered mountains of Patagonia.
As for the people, Argentina is the
world’s 30th most populous country with,
according to preliminary 2022 census
data, some 47.3m people. It’s a hair above
Spain which sits in 31st position and nine
places below the UK with around 67m. The
population density of Argentina is low; the
country is in 217th place with an average of
16 people per sq. km. For reference, Hong
Kong has 6,677 people per sq. km and the
UK has 277 people per sq. km.
Using 2010 data from Argentina’s INDEC
census (new data is likely soon), nearly one
third of the population lives in three cities
– Buenos Aires (13.5m), Córdoba (1.4m)
and Rosario (1.2m). More recent UN data
(2018) estimates those numbers as being in 2021,
15.25m, 1.58m and 1.55m, respectively.
There are 21 other cities with between 162,048
and 937,154 inhabitants and 99 towns with
between 45,077 and 133,602 residents (2010 data).
Overall, Argentina is highly urbanised with,
according to the UN in 2018, 92 percent living
in urban areas, albeit they’re spread around the
country in pockets. Patagonia is particularly
sparsely populated.
Most – 97.2 percent - of the people are of
European descent, according to the CIA World
Factbook. Of the rest, 2.4 percent are Amerindian,
and 0.4 percent are African. (2010 data). Study.
com reckons that two-thirds of the population
is of Italian descent – it also suggests that a
million Argentines are of Asian descent. Of the
languages spoken, Spanish is the official tongue,
but there’s also Italian, English, German, French
and indigenous languages. Argentina is clearly a
melting pot of cultures.
US Census Bureau International data estimates
that in 2019 the country is demographically young
since 87.8 percent of the population was aged 64
or under. Statista quotes the World Bank when
it said that in 2020 24.44 percent were under 14
or under, 64.2 percent were 15 to 64, and 11.37
percent were 65 or older.
MAIN SECTORS OF INDUSTRY
In business, Santander Trade Markets thinks that
despite Argentina’s troubled recent economic
history, the country still plays an important role
within the global economy.
Agriculture
This sector is mainly based on livestock farming,
cereals, citrus fruits, tobacco, tea, and grapes (for
wine). Santander considers Argentina to be the
world’s largest exporter of soy-derived products
and the world’s third largest producer of such
products. It adds that soy and sugar cane are
cultivated for bio-fuel production and Argentina
is the world’s largest exporter and sixth largest
producer of biodiesel. World Bank data suggests
that the agricultural sector represents 5.9 percent
of the country’s GDP while only employing 0.06
percent of the population.
Areco Tradicíon states that the main regions
for production are the provinces of Buenos Aires,
Córdoba, Santa Fe, and La Pampa.
Industry
Data from the World Bank reckons that the industrial
sector represented 23.3 percent of GDP
in 2020 and employed 21.8 percent of the population
in 2019. Given Argentina’s strength in food
production, it’s logical to see why food processing
and packaging – in particular meat packing,
flour grinding and canning, and flour-milling –
are such important drivers in the economy. But
beyond this, there is capability in motor vehicles
and parts, consumer durables, textiles, chemicals
and petrochemicals, pharmaceuticals, printing,
metallurgy and steel, industrial and farm
machinery, electronics, and home appliances.
COUNTRY FOCUS
AUTHOR – Adam Bernstein
Buenos Aires is the capital and most
populous city of Argentina. The city is
located on the western shore of the estuary
of the Río de la Plata, on the South American
continent's southeastern coast.
El Chalten, Santa Cruz, Argentina
Brave | Curious | Resilient / www.cicm.com / October 2022 / PAGE 17
Argentina
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