Argentina is the eighth largest country in the world, with a land area slightly larger than Western Australia. It is dominated geographically by the Andes mountain range in the west, the fertile Pampas region in the centre, the hot and dry Chaco in the north, the riverine provinces to the east and Patagonia to the south. The name Argentina derives from the Latin word for silver. The capital of Argentina is Buenos Aires.
Argentina’s population is approximately 42 million (2014), composed mostly of the descendants of European immigrants. The Argentine indigenous population is estimated at just below two per cent of the total. Catholicism is the main religion and Spanish is the official language.
Australia and Argentina have a mutually beneficial relationship based on many shared interests. We are both large Southern Hemisphere nations with relatively small populations and strong resource bases. Australia and Argentina agreed in principle to exchange diplomatic missions in December 1959, with Argentina opening its first post in Sydney in 1962 (moving to Canberra in 1963).
Australia sent its first ambassador to Buenos Aires in 1964, and we currently maintain resident embassies in each other's capitals.
Australia's principal engagement with Argentina is through the Cairns Group, the WTO, the G20, the UN, the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR), the Antarctic Treaty and the International Whaling Commission (IWC). We also share common interests in international peacekeeping, the prevention of WMD proliferation, disarmament, human rights, international environment policy, agricultural trade liberalisation and economic cooperation policies.
The Spanish established a permanent colony on the site of Buenos Aires in 1580 following sporadic settlement overland from Peru. Argentina declared independence from Spain in 1816. Despite a prosperous start to the 20th Century, political and economic turmoil resulted in a military coup in 1943 led, among others, by Juan Domingo Perón. Elected President in 1946, Perón undertook radical industrial and labour reforms. Despite winning re-election in 1953, he was exiled by the military in 1955. This was followed by a period of political instability and diminished economic growth, paving the way for Perón's return to the presidency in 1973. Perón died in 1974 and was succeeded by his third wife, Maria Estela “Isabel” Martínez de Perón, but she was ousted in another military coup in 1976. The ensuing period of repression under the military junta, known as the 'Dirty War', resulted in over 9,000 recorded political murders and disappearances.
Argentina returned to civilian government in 1983. Since that time, the country's democratic institutions have been consolidated. This has not, however, been matched by similarly enduring financial and economic stability. In 2001, a profound economic crisis provoked serious civil unrest and resulted in the resignation of then President De la Rúa in December. After a period of transition under a caretaker administration, presidential elections were held in 2003 in which Néstor Kirchner came to power. With high public approval ratings, Kirchner's government focused on restructuring Argentina's foreign debt and promoting economic growth.
Kirchner was succeeded in 2007 by his wife, Cristina Fernández de Kirchner (née Fernández), a seasoned politician in her own right. Fernández continued and stepped up her husband’s unorthodox economic programme, with mixed results. In 2011, on the back of record-high approval ratings, Fernández was re-elected by a landslide for a second four-year term. In part, the outcome reflected a groundswell of public sympathy for Fernández after Néstor Kirchner’s untimely death of a heart attack in 2010.
In Fernández’s second term, her administration ran into increasing economic difficulties, with a less favourable external context and worsening energy bottlenecks and inflationary pressures at home. The government fared poorly in mid-term legislative elections held in 2013, losing in all the major districts and failing to gain the majority needed to amend the constitution and which would have allowed Fernández to seek a second re-election.
The 2015 presidential election was won, by a small but clear margin, by opposition candidate and former Buenos Aires city mayor Mauricio Macri of the centre-right Cambiemos (“Let’s Change”) coalition. Macri, whose government faces significant economic and political challenges, moved quickly to assert his authority, making a raft of major policy announcements very early on.
System of government
Argentina is a presidential democracy, with universal suffrage and compulsory voting. Under the current constitution (last reformed in 1994), the President is the head of state and government and the Congress is bicameral. Argentina is a federation of 23 provinces, plus Buenos Aires City, the self-governed capital.
The system of government (at both the federal and provincial levels) is based on the separation of powers between the Executive branch, the Legislative branch and the Judiciary. The President and Vice-President are chosen by direct popular vote for a four-year presidential term, and may run for one consecutive re-election. The President appoints the ministers, who cannot simultaneously serve in Congress.
President Mauricio Macri took office on 10 December 2015. His victory defied
pre-election predictions and upended Argentina's political establishment by defeating the dominant Perónist political movement which had ruled for three consecutive terms.
Macri tapped into the new reformist mood in his victory speech, appealing for unity and implying that he would not follow the precedent set by his predecessors of centralising power in the presidency. He also hinted that he would reposition Argentina internationally, after a series of damaging disputes with key trade partners in recent years.
On 25 November Macri announced his Cabinet. It was widely acknowledged as a strong line-up, particularly the new economic and foreign policy teams, which include Alfonso Prat-Gay as Finance Minister, and former City Bank President Federico Sturzenegger as Governor of the Central Bank. Ms Susana Malcorra was appointed Minister for Foreign Affairs. She has served a distinguished career in the United Nations, including as Chief-of-Staff to the United Nations Secretary-General since 2012.
Foreign policy and Bilateral Relations
Like Australia, Argentina is a member of the G20 and was elected to a non-permanent seat on the United Nations Security Council for 2013-14. Argentina is currently a member of the UN Economic and Social Council (2015-2017) and the UN Human Rights Council (2013-2016).
Argentina is a key member in the regional trade bloc Mercosur (Argentina, Brazil, Paraguay, Uruguay, Venezuela). It is also a member of the Union of South American Nations (UNASUR), the Community of Latin American and Caribbean States (CELAC) and the Organisation of American States (OAS), that seek to advance a variety of regional political and economic interests.
Australia has a long-standing bilateral relationship with Argentina through trade, cooperation, tourism and people-to-people links, including student exchanges.
Argentina also shares interests in international peacekeeping, the prevention of WMD proliferation, disarmament, environmental issues, agricultural trade liberalisation and economic cooperation. Argentina and Australia also work together on issues relating to the Antarctic, especially in efforts to address illegal fishing through the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR).
People to people links
Almost 12,000 Argentina-born persons live in Australia (2011 census), many of whom migrated to Australia in the 1970s during a period of economic and political turmoil in Argentina. Australia's Argentine community also includes a network of second and third generation Argentine Australians. More information can be found at the Department of Social Services’ Community Information Summary page.
There were 358 Argentines studying in Australia in 2014/15. Our reciprocal Work and Holiday Visa Arrangement (signed 2011) has proven very popular with Argentines. The annual cap increased on 1 July 2015 from 500 to 700 visas per year.
Air links were boosted by the December 2015 commencement of Buenos Aires-Auckland direct flights with Air New Zealand (connecting to Australian cities with Virgin). This will complement the existing Buenos Aires-Santiago-Sydney route operated by Qantas and LAN, and further enhance our business and tourism links.
In 2012 Argentina’s national Rugby Union team was permanently included in the Rugby Championship, which sees Australia and Argentina play each other twice a year, once at home and once away. From 2016 an Argentine team will play in the Super Rugby tournament which is currently contested between teams from South Africa, New Zealand and Australia.
Tourism, Culture and Education
In 2001, the Australian Government established the Council on Australia-Latin America Relations (COALAR) which aims to enhance commercial, political and cultural relations between Australia and Latin America. Since its inception, COALAR has been active in promoting business, education, tourism and cultural links between Australia and Latin America. For updates on COALAR activities and information on the annual grants program, follow COALAR on Facebook.
There is also strong two-way tourism trade between the two nations. Over 7,500 Argentines visited Australia in 2014-15 and over 30,000 Australians visited Argentina in 2015.
422 Argentine students were enrolled in Australian education institutions as at October 2015 (year to date). Australian expertise in distance education, vocational training, tele-medicine, English as a second language and postgraduate studies is also valued in Argentina. Over 7,800 Argentines have visited Australia each year since 2009 and tourism has the potential to be grown even further through appropriate marketing and increased air links.
From 2010 to 2014, Australia provided $100 million in development assistance to Latin America, including 250 Australia Awards scholarships. 45 Australia Awards fellowships and 16 Australia Awards scholarships were awarded to Argentine students under this program. The regional program has now closed, though some activities which have already been funded will continue until 2017.
At a glance
For latest economic data refer to Argentina Fact Sheet [PDF 35 KB].
Argentina’s economy is based on an abundance of natural resources, a highly literate population and an export-oriented agricultural sector. Although Argentina is an industrialised country, its exports continue to be dominated by agricultural products. In the last decade, soybeans have become the country's main commodity export. Exports of industrial goods have, however, also grown strongly in recent years.
After decades of economic stagnation, economic reforms in the 1990s opened the market to foreign competition. Privatisation and economic deregulation saw foreign investment soar and GDP grow, with large domestic conglomerates and multinationals dominating the industrial base and utilities. For a decade, economic policy was based on the Convertibility Law of 1991, which sought to end hyperinflation and attract investment by establishing a currency board system that maintained parity between the Argentine peso and the US dollar. However, the law, together with a lack of fiscal discipline, ultimately reduced Argentina's flexibility to deal with external shocks and led to a recession, with high unemployment and a swelling public debt
In December 2000, the De la Rúa government resorted to a US$39 billion IMF bail-out to address concerns that the country would default on its debt. This package afforded Argentina only a short respite. Subsequent government initiatives failed to cap public spending and Argentina eventually entered into a US$98 billion default with private creditors. This was followed by political and social conflict, the collapse of the financial system and the fall of the government in December 2001. A transitional government applied emergency measures to devalue the peso and set a floating exchange-rate regime.
After coming to power in May 2003, Néstor Kirchner's government made progress in stabilising inflation and maintaining the primary surplus, together with a strong trade surplus. This process was aided by favourable international prices for Argentina’s commodity exports. The government introduced policies that put the economy back on a firm footing and laid the foundation for growth, falling unemployment and poverty reduction. However, little progress was made on structural reform, including restructuring the banking system, implementing tax reform, and establishing a new fiscal relationship between the central government and provinces.
In its two terms in office, the Fernández government used its high popularity and majority in Congress to pass a number of controversial pieces of legislation, as well as the expansion of import and foreign exchange controls. In 2005 and 2010 Argentina successfully renegotiated its debt with the majority of private creditors (93 per cent), who agreed to receive partial repayment. Argentina compensated Spanish company Repsol for the seizure of its controlling stake in oil giant YPF in February 2014 and signed an agreement to fully repay its debt arrears with the Paris Club group of creditors in May 2014.
However, following many years of legal dispute in the US with a group of creditors who had not agreed to the 2005 and 2010 debt swap deals, in July 2014 Argentina entered into what has been described as a ‘selective default’ after a New York court ordered it to repay in full the amounts owed to the remaining seven per cent of ‘holdout’ creditors.
Economic and trade policy directions
Former President Fernández adhered broadly to the economic policies pursued by her husband and predecessor, the late Néstor Kirchner, including measures such as domestic price accords, export taxes and utility tariff freezes, and strong growth in public expenditure. The introduction of measures aimed at slowing the flow of manufactured imports met with criticism as being protectionist, and caused tensions within Mercosur and with major trading partners. Inflation has remained at high levels since 2010.
Argentina's most important trade agreement is Mercosur. Argentina, Brazil, Paraguay, Uruguay and Venezuela are full members of Mercosur, the Southern Cone Common Market, which also comprises associate members Chile, Colombia, Ecuador, Guyana, Peru and Suriname. Mexico is an Observer and Bolivia is in the process of becoming a full member. Mercosur is an imperfect customs union, with a common external tariff applied on most products. It represents a potential market of over 280 million people with an estimated combined GDP in 2014 of US$3.1 trillion.
In 2014, Argentina’s principal export destinations were Brazil (20.3 per cent), China (6.5 per cent) and the United States (5.9 per cent). Its major exports include agricultural products, motor vehicles and parts, chemicals and related products, crude oil and fuels and base metals. In 2014, Argentina’s principal import sources were Brazil (21.8 per cent), China (16.4 per cent) and the United States (13.5 per cent). Major imports include motor vehicles and parts, fuels and telecommunications equipment. Argentina’s exports to the United States totalled US$4.3 billion in 2013, while imports from the United States were US$8.1 billion.
Argentina's GDP in 2015 is estimated at US$563 billion, up slightly from US$540 billion in 2014. Economic growth in 2016 is expected to be around 1 per cent and inflation will remain high. Consumer demand, which had benefited from expansionary fiscal policies and credit growth, has slowed amid growing inflation, weakening confidence and faltering industrial production.
Macri’s administration has vowed to improve export competitiveness and encourage foreign investment. Following the elimination of export quotas, the reduction of export taxes and the simplification of import licensing, initial steps have also been taken to reform economic statistics, restart negotiations with creditors so Argentina can exit from default, and reach an incomes and prices accord with businesses and unions. Following years of maintaining an overvalued exchange rate and currency and trade controls, which damaged the country’s competitiveness, in December 2015 the new President eliminated the controls and allowed the currency to float freely. While the resulting 30 per cent correction in the value of the peso is expected to feed into inflation, a record soybean harvest and recent cuts to water and natural gas subsidies should help to reduce the fiscal deficit and alleviate some pressure.
Macri is also keen on developing Argentina’s services and infrastructure, including ports, railways, waterways and energy. Energy security is a key long-term economic challenge, but steps are being taken to remove subsidies, correct market incentives and seek investment to develop the country’s massive shale oil and gas reserves (the world’s second largest shale gas and fourth largest shale oil deposits).
More information can be found at the World Bank and International Monetary Fund websites.
Bilateral economic and trade relationship
Trade with Argentina is modest, with the balance in trade generally favouring Argentina since the onset of its economic crisis in 2001. Two-way merchandise trade exceeded the half-billion dollar mark for the first time in 2008, and was $907 million in 2014. Australian exports to Argentina totalled $136 million in 2014, and consisted mainly of coal. Australian imports from Argentina totalled $771 million in 2014, and included animal feed, goods vehicles, soft vegetable fats and oils, and leather. Two-way trade in services totalled $149 million.
Over 50 Australian companies operate in Argentina, including 10 ASX200 companies. Australian investment in Argentina is estimated at around
$771 million (2014). Sectors of interest include mining, agribusiness, entertainment, port management, freight equipment and workers' compensation insurance.
Australia and Argentina played an active role in the G20 forum in addressing the global financial crisis and continue to work closely together in identifying reforms to the global financial system. Argentina's role as an interlocutor on the WTO Doha Round negotiations and in the Cairns Group is important to Australia. As major wine-producing nations, the two countries also cooperate jointly through the World Wine Trade Group to improve conditions for international trade in wine.
Australia also participates in the CER-Mercosur Dialogue, bringing together Australia, New Zealand and the Mercosur member countries. The dialogue was established in 1996 as a mechanism to strengthen cooperation on global trade policy issues and to promote inter-regional trade and investment.
Australia and Argentina are both members of the Forum for East Asia-Latin America Cooperation (FEALAC), which aims to increase and improve mutual understanding, political dialogue and cooperation among member states of East Asia and Latin America.
Argentina and Australia have signed an Investment Protection Agreement (1997), which provides additional security to Australian investors by protecting against the possibility of expropriation of Australian investments and providing for an international dispute settlement mechanism. A Double Taxation Agreement entered into force in 2000. An Agreement on Cooperation in the peaceful uses of Nuclear Energy entered into force in January 2005. In November 2003, Australia signed a bilateral Memorandum of Understanding (MOU) on scientific and technological cooperation with Argentina. Australia and Argentina also have bilateral MOUs on education and training (2001), air services (2005); Work and Holiday visas (2011); development of rail infrastructure in Argentina (renewed in 2015), agriculture (2015); and exchange of information on migration matters (2015).
Export and, in particular, investment opportunities for Australia can be found in mining, oil and gas and most areas of primary production and agribusiness sectors. Opportunities also exist for Australia in the revitalisation of Argentine industry and in the communications, transport and public utilities sectors. Other sectors with promise are environmental management, water management, wine, construction and building equipment, high-tech machinery and services.
For information on doing business and opportunities in Argentina please see the Austrade website: Argentina Market Profile.
High level visits
May 2015: Natasha Stott Despoja, the Ambassador for Women and Girls, visited Buenos Aires, where she was declared an honoured guest of the Buenos Aires City Government.
January 2015: The Speaker of the House of Representatives, the Hon Bronwyn Bishop MP visited Argentina to further bilateral relations and to develop parliamentary links.
November 2014: Argentine Finance Minister Kicillof and Foreign Minister Timerman both visited Australia for the G20 Leaders’ Summit in Brisbane.
August 2014: Argentine Agriculture Secretary Gabriel Delgado visited Australia, where he met with the Department of Agriculture to discuss issues of bilateral interest and the MOU on cooperation in agriculture (concluded in 2015).
September 2013: an Argentine delegation including provincial and national government and business representatives, led by the Governor of San Luis, Claudio Poggi, visited Australia for meetings in relation to technical education, agriculture and water management.
October 2012: The Hon John Hogg, President of the Senate, visited Argentina and an Australian Parliamentary delegation visited in October 2012.
October 2010: a Congressional delegation from Argentina visited Australia and met with key government officials, academics and representatives from the business sector.
April 2010: Minister for Trade, the Hon Simon Crean visited Argentina for meetings with senior government members.