Argentina is one of the largest economies in South America. In recent years, the government has focused in promoting economic development along with social inclusion with the support of the World Bank. Read More »
With a Gross Domestic Product (GDP) of more than US$475 billion (2012) Argentina is one of the largest economies in South America. In recent years, President Cristina Fernandez has focused on promoting economic development with social inclusion.
On the international front, Argentina enjoys good relations with most of the countries in the region, particularly Brazil and Venezuela. The country also has a leading role in advocating the region's policy stance, as it represents Latin America at the G-20, jointly with Mexico and Brazil.
Education and health: Argentina has a strong tradition in advancing public education and health. Currently 6% of the GDP is invested in education and culture, and 9.5% of the GDP is invested in health services.
Commerce and industry: in recent years, the country has experienced a record growth of its national industry, in particular automobile, textile and power. The main commodities exported are wheat, soy pellets and meal, soybeans, crude oil, gasoline, and meat. The opening up of China's markets has been a boost to support exports.
Environment: Currently, 7.7% of the territory is under protected areas. There are 36 national parks and 400 provincial natural reserves. In the last 7 years, national protected areas increased by 24% and recently new marine reserves have been created. In 2009, the National Administration regulated the Forest Law, which aims to preserve the conservation of native forests. As part of its commitment to the environment, the Matanza-Riachuelo basin, one of the most polluted in South America, is being cleaned.
Economy: Following a sharp slowdown in 2012, the economy is recovering this year. Consecutive years of rapid and pro-poor economic growth enabled poverty and unemployment to be cut to levels experienced prior to the country's 2001-2002 economic crisis. President Cristina Fernández seeks to support economic growth and stability after 10 years of continued GDP increase.
During the first half of 2013, the economy expanded by 5.1%, thanks to an increase in industrial production of 1.4% between January and July this year. In the second quarter of 2013, unemployment stood at 7.2%, after rising during the first three months of the year.
The external sector of the economy faces significant challenges. The trade surplus has shrunk by 32% in the first seven months of the year. The fiscal accounts remain under pressure while expenses grow at a faster rate than income. On the other hand, there has been a significant increase in the value of imports of energy and fuels.
Social spending continues as priority. Thanks to the fiscal effort made, there were increases in the amounts of pensions and the Universal Child Allowances that benefit 3.7 millions of children and teenagers up to 18 years, 9.3% of total population.
The World Bank is currently working with the Argentinean government in developing a new Country Partnership Strategy (CPS). Currently, active projects address three key areas:
Sustainable growth with equity
In a nutshell, the portfolio is focused on the following goals:
Upgrade infrastructure to address potential bottlenecks to competitiveness and to underpin medium-term growth and poverty alleviation.
Improve competitiveness, quality, and exports of agriculture and livestock production.
Address a growing problem of natural resource degradation.
Consolidate and expand progress in reducing poverty by increasing household incomes and integrating marginalized groups into the productive marketplace.
Consolidate improvements in health indicators.
Strengthen the effectiveness, efficiency, transparency and accountability of the public sector.
Expand performance management and improve the quality of public expenditure
Enhance service delivery outcomes and trust in institutions.
Argentina currently has a portfolio of 35 projects totaling US$6.200 billion in credits and five important GEF donations of US$29.4 million. The World Bank's involvement includes a wide array of projects in areas such as environment, health, education, infrastructure, social protection and labor, among others.
The provinces of Catamarca, Chaco, Corrientes, Formosa, Jujuy, Salta, Tucumán and Santiago del Estero, which as a group are home to 7.5 million people, receive the support of the Norte Grande National Development Program, including World Bank financing of US$800 million for a Water Project and a Road Project.
Social safety nets are the focus of a financing of US$480 million for the Basic Protection Project, which aims to increase the effectiveness of Argentina's income transfer programs for the unemployed and families with children, including the Universal Child Allowance.
The Provincial Public Health Insurance Development Project (US$400 million) will improve access to health coverage for 70% of people without health insurance. This initiative complements Plan Nacer, which emphasizes performance based transfers in Argentina's health system, with immediate attention to the health needs of poor mothers and children. Finally, the Essential Public Health Functions project (U$461 million) focuses on seven health programs including chronic diseases, safe blood, HIV and others.
In the City of Buenos Aires, the Bank supports the main hydraulic works, through the Urban Flood Prevention and Drainage Project (US$130 million), which has improved the ability of Arroyo Maldonado drainage system to prevent flooding in several neighborhoods of the city.
The Program to Promote Productive Innovation seeks to improve Argentina's knowledge industry by supporting highly skilled human capital and new knowledge-based enterprises.
Around 70,000 small and medium producers —over one third of the total number— are benefiting from initiatives such as the Second Provincial Agricultural Development Project (PROSAP), which provides US$300 million in assistance to support new public infrastructure and services investment in rural areas.
Road systems feature prominently in the World Bank's Argentina portfolio. A US$150 million plan dubbed Provincial Road Infratructure supports road investment programs at the provincial level in Chubut, Corrientes, Cordoba, Entre Ríos, Neuquén and Santa Fe. The project will rehabilitate and maintain some 2,200 km of road through CREMA contracts; rehabilitate and/or pave 270 km through traditional admeasurements contracts; and develop a routine maintenance program for some 9,400 km.
Additionally, the US$30 million Road Safety Project has reduced the rate of injuries and fatalities in traffic accidents by strengthening the country's institutional framework and management capacity of road safety.