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Argentina Overview

    Context

    With a Gross Domestic Product (GDP) of more than US$510 billion, Argentina is one of the largest economies in Latin America. In recent years, President Cristina Fernandez’ administration 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.

    Argentina's economy is characterized by its valuable natural resources, leading the country to be one of the main producers of food, thanks to agriculture and cattle breeding. Argentina is one of the largest exporters of beef in the world and the top world producer of sunflower crops, yerba mate, lemons, and soybean oil. The opening of the Chinese market represents a boost in the consolidation of an export profile.

    In recent years, moreover, the country experienced record growth within the domestic industry, particularly in the automotive, textile, and appliances industries.

    The country has grown steadily during the past decade and has invested heavily in health and education, areas which account for 8% and 6% of GDP respectively. Between 2000 and 2011, the middle class increased from 34% to 53% of the population.

    It has prioritized social spending through various programs, including the creation of the Universal Child Allowance, which reaches approximately 3.7 million children and adolescents up to 18 years old, 9.3% of the population.

    The economy's external sector faces significant challenges. Estimates for the first 6 months of 2014 were 0.1% GDP growth compared with 2013 and the forecasts for the whole of 2014 range from -1% to -1.5%. For 2015, around 0.5% is expected.

    During the first 6 months, fiscal accounts had a primary surplus of 0.1% of GDP and an overall deficit of 0.9% of GDP. In the first six months of 2014, public sector revenues increased 43% (YOY) and spending by48% (YOY).

    Last Updated: Oct 09, 2014

    LENDING
    Argentina: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    The WBG strategy is built around three broad themes:

    • (a) sustained employment creation in farms and firms
    • (b) improving availability of assets for people and households
    • (c) reducing environmental risks and safeguarding natural resources

    These thematic areas were selected for their contribution to achieving sustained poverty reduction and shared prosperity.

    Some emblematic programs will contribute to reduce average transit time to city centers from poor neighborhoods in two metropolitan areas by 15%; or to increase by 12% the gross value of agricultural production ($/ha) of 80,000 small and medium-size farms in lower-income areas; and will support an increase in effective national healthcare coverage from 28% to 50%. 

    The new strategy focuses on working with the country’s poorest provinces and in large urban areas.  There will be support for programs designed to increase the employability of young people through training, apprentice programs and corporate partnerships. In large cities, the strategy will promote activities that include logistics solutions, urban transport, basic services, skills development and governance in communities and low-income municipalities.

    Last Updated: Oct 09, 2014

    LENDING
    Argentina: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    Argentina currently has a portfolio of 20 projects totaling US$4.9 billion in credits and four important GEF donations of US$28.6 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 environmental area, the Matanza-Riachuelo Basin Sustainable Development Project provides $840 million in assistance to clean up the notoriously polluted river basin by improving sewage services and expanding treatment capacity.

    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.

     

    Last Updated: Apr 09, 2014

    LENDING
    Argentina: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
Country Office Contacts
ARGENTINA +5411 4316-9700

Bouchard 547, piso 29 CP1106. Buenos Aires

ccrerar@worldbank.org
USA +1 202 473-1000

1818 H Street NW, Washington, DC 20433

ccrerar@worldbank.org