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UNIVERSITY OF WARSAW

INSTITUTE OF INTERNATIONAL RELATIONS

ARGENTINA IN 2050

Accomplished by

Hanju Kim

Natalia Herrera

Polina Borshchevska

Yuet Mun Kwong

Nicole Ostrowska-Cobas

Developing Countries in International Relations

Academic year 2016

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TABLE OF CONTENTS

1. Introduction………………………………………………………………………...……...3

2. Political Situation……...…………………………………..………………………………4

3. Economic Situation…………………………………………………..……...………….....5

4. Relations with Neighboring Countries………………………..………..….……………....6

5. Regional and Global Influence.…….……………………………………………………...8

6. Population………………………………………………………..……………………….10

7. Conclusion…………………………………………..…………………………………....12

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1. Introduction

This report is devoted to discover the entire pattern of progress of Argentina until 2050

focusing on the different realms: political and economic growth, population, dynamics of relations

with neighboring countries and the regional and global influence. The main idea is to portrait a

general view of the country in 36 years based on predictions we derived from analyses that have

been published.

Nowadays Argentina is a country with a high level of development potential in comparison

with some of the countries in the region, nevertheless Argentina still has to overcome plenty of

obstacles in order to become a fully advanced state; for achieving this propose the government is

trying to bind relations with other countries inside and outside of the region to increase the

cooperation among them, relying on liberalistic IR theories this will allow the country to gain a more

international position that will eventually lead to a prosperous future.

To begin with, the political situation impresses with its progress in human development,

simultaneously significantly improving the quality of living of its citizens and advancing the level of

urban infrastructure. Although, in the economic field Argentina experiences steady growth, the

likelihood of considerable boost is very high leading to economic stabilization. The influence in the

regional and international arena is one of the most important aspects giving the fact it will

completely change the perception of Argentina as an international player. Concerning population the

odds are that the country will accomplish the maximum population in comparison with previous

years, simultaneously experiencing an ageing society issue and a moderate fall in growth rate. The

dynamics of relations with neighboring countries the main focus are countries adjacent to Argentina

borderline: Chile, Uruguay and Brazil in a bigger scale and Paraguay, Bolivia in a minor scale; also

the relations between Great Britain and Argentina was analyzed concerning the territorial conflict

they had back in 1980’s.

Through the analyses that we conducted, we derived to the possible outcome of Argentinian

society in 2050.

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2. Political Situation

In the past 13 years, Argentina made a symbolic amount of social and economic progress.

The Kirchners managed to reduce poverty by 70% and extreme poverty by 80%1. Unemployment

fell from more than 17.2% to 6.9%. Nevertheless, economic growth has been slow for the past 4

years (averaging at 1.1%), inflation has been high and a black market for the dollar has developed. In

light of this instability, newly elected president Mauricio Macri presented himself as a candidate for

a better future.2

He started a new way of governing by undoing the populist policies of his predecessor.

Export taxes on agricultural products such as wheat, beef and corn were scrapped and taxes on

soybeans (biggest export) were reduced in mid-December. Shortly after, the new finance minister

lifted currency controls thus allowing peso to float freely. In an attempt to end Argentina’s exclusion

from the international credit markets, the new government met with foreign bondholders through a

mediator. The changes seem to be working as the freed currency dropped by 30% - an improvement

for exporters. Consequently, it elevated the inflation rate by more than 25% since Mr. Macri took

office.

The government is keen on persuading businesses and trade-union leaders to control their

prices, however, those are little disposed to do so. The president is also demanding the resignation of

General Attorney Alejandra Gils Carbó - an independent officer appointed by the congress with life

tenure. The resignation is demanded on the grounds that she is a supporter of the former government

– critics emphasize his hypocrisy by stating the fact that he appointed a former councillor of his own

party as general attorney of the city of Buenos Aires. The Supreme Court is left with three members

and he can appoint his own candidates, hence ensuring a majority.

Having briefly explained the current political situation in the country, a rough projection can

be made for the near future. Even though the Senate is controlled by Peronists, many of them need

support from the central government to restructure their debts - this calls for a form of cooperation.

By undertaking rapid transformations and taking such extreme measures to achieve them makes the

future uncertain. If they manage to reduce inflation and create economic growth, the government will

most likely gain more support and it will secure closer ties with the West. By doing so it may also

alienate the neighbouring countries which have a different political and economic structure. It’ll be a

tough road, ergo failure is also likely and if it happens the political system may pull a tango

turnaround. There have been rumors in the media that Fernandez might try to return for a third term

as president in 2019.

1 SEDLAC, poverty. Data from 2003 to mid-2013, based on independent estimates of inflation

(http://sedlac.econo.unlp.edu.ar/eng/statistics-detalle.php?idE=34 – accessed 5.04.2016).

2 International Monetary Fund

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3. Economic Situation

In 2016, with a Gross Domestic Product (GDP) of more than US$ 540 billion, Argentina is

one of the largest economies in Latin America. In recent years, the country has focused on economic

development with social inclusion.

Argentinian economy enjoys valuable natural resources. It is a leading food producer with

large-scale agricultural and livestock industries. It is among the world’s largest beef and soybean

exporters and is the leading producer of sunflower seeds, yerba mate, lemons and soybean oil. The

opening of the Chinese market has helped boost the country’s export potential.3 The country is

pursuing an active foreign policy agenda and represents Latin America in the G-20, together with

Mexico and Brazil. The Argentinian economy enjoyed significant growth over the past decade.

Argentina invested heavily in health and education, areas which account for 7% and 6% of GDP,

respectively.4

First of all, from the performance of Argentina since the 1980’s, its very likely to become the

top 20 biggest economy in the world in 2050 due to the huge investments in the fishing industry and

fish processing equipment become modernized. The export will be highly expanded.

Secondly, Argentine government is developing the new crops and non-traditional product

development plans, especially in grain processing, grain ancillary products, processed foods, fruits,

flowers and other organically grown crops.5 Furthermore, the government succeeded in establishing

mechanisms for the vaccine, and the gradual improvement of health conditions in order to enhance

the confidence of trading partners, which is the strong contributing factor for current situation and

also for the future. Positive improvement of the Argentinian government and the technology will

successfully derive them to ease the trade restrictions form other countries on animal health problems

in Argentina.6

Lastly, if further tap the potential of agriculture, whether it is to meet the domestic needs or

for the increase in exports, will need to invest more in infrastructure (including frozen, processing

and transportation equipment); irrigation; fertilizers and pesticides; marketing; promotion and the

information system.7 Credit mechanisms are also necessary to improve conditions for agricultural

development potential in Argentina.8 According to the analysis that we have made, we can clearly

conclude that Argentina has a mighty potential to become the World Top 20 economy in 2050.

3 Chudnovsky, Daniel, and Andrés López. The elusive quest for growth in Argentina. Macmillan, 2007

4 Cimoli, Mario, Giovanni Dosi, and Joseph Stiglitz. Industrial policy and development: The political economy of

capabilities accumulation. Oxford University Press, 2009.

5 Cavallo, Domingo, and Yair Mundlak. Agriculture and economic growth in an open economy--the case of Argentina.

Vol. 36. Intl Food Policy Res Inst, 1982.

6 Bruno, Michael. Inflation Stabilization: The Experience of Israel, Argentina, Brazil, Bolivia, Mexico. Mit Press, 1988.

7 Delacroix, Jacques, and Glenn R. Carroll. "Organizational foundings: An ecological study of the newspaper industries

of Argentina and Ireland."Administrative Science Quarterly” (1983): 274-291.

8 Albornoz, Facundo, Darío Milesi, and Gabriel Yoguel. "New Economy in old sectors: some issues coming from two

production networks in Argentina."DRUID summer conference. 2002.

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4. Relation with Neighboring Countries

Argentinian borders are touching with five Latin American countries, and having one

territorial conflict with European country. Northern part of Argentinian border is contiguous with

Paraguay and Bolivia, while the Eastern part is touched with Brazil and Uruguay. 9 Western and

Southern border is adjacent with Chile. Argentina is currently having a minor territorial conflict with

Great Britain by insisting its dominance over

Falkland Islands and South Georgia and the South

Sandwich Islands which belong to Great Britain in

accordance with international concerns.10

Among five countries surrounding

Argentinian borders, Uruguay is considered as the

closest ally. Argentinian foreign relation with

Uruguay has been formed positively after the

Argentina-Brazil War (1825-1828). While Uruguay

was used to be a Brazilian province called

‘Cisplatina’, Argentina deeply supported the

independent procedure of the Cisplatina province.

The war eventually led to the independence of the

province and it became the country nowadays known

as Uruguay.11

Still we can find the evidence of close relationship between Argentina and Uruguay with

Uruguayan national flag. The newly-born Uruguayan government washed in ‘Sol de Mayo’ on its

flag to thank Argentinian government which literally fought against Brazilian dominance in the

territory of Uruguay, and supported its independence.12

Currently around 120,000 Uruguayan

nationals are residing in Argentinian territory.13

However, the first minor diplomatic tension has been

burst forth with the issue of building a large pulp mill along the riverside of the Uruguay River.14

Argentinian government is also retaining positive foreign relationship with Bolivian and

Paraguayan government.15

However Argentina and Paraguay were at war from 1864 to 1870 named

the War of Triple Alliance. After the incident, both countries never fought again and maintaining

positive relations without any military tensions.

9 Website 'World Atlas' «South America Outline Map - Outlibe Map Of South America»

10 “The World Fact Book” 『Central Intelligence Agency』. Retrieved 21 March 2016

11 “Bureau of Western Hemisphere Affairs,” “Background Note: Uruguay", US Department of State. 23 February 2011.

12 “Flag of Uruguay", Guide to Hispanic Heritage. Britannica.com. Retrieved 27 June 2007

13 "Uruguayans in Argentina" EL PAIS, 27 February 2012.

14 "Court allows Uruguay pulp mills", 『BBC News』. 13 July 2006

15 “Paraguayan Ministry of Foreign Relations about relations with Argentina” Website

Figure 1 Latin American Map

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However, Argentina was suffered by the foreign relationship with Brazil. After the

Argentina-Brazil War, Brazil lost the war, losing the territory which nowadays we call Uruguay.

However the democratisation of Latin American countries, both countries made a strong partnership,

signed MERCOSUR regional trade Agreement together. They accepted military détente against each

other, by lessening the tension around their borders.16

Argentinian government is still having difficulty regaining the positive relationship with

Chile. While Argentina fought with British army with the issue of the territorial dispute of South

Atlantic islands including Falkland Islands and South Georgia and the South Sandwich Islands,

Chilean government indirectly supported British army. Furthermore, Argentinian government had a

territorial dispute with Chile, dealing with the area called ‘Patagonia’, the most Southern part of the

Latin American continent. Though Argentina and Chile are sharing the third-longest border of the

world (over 5,300 kilometres), they are still in the negative contacts. However on June 2010, Chile

officially has supported the Argentine position at the UN, about the Falkland Islands dispute.17

The

relations between them have been changed positive quite dramatically for a decade; currently there

are a lot longer ways to go.18

Lastly, the mighty anti-Britain animosity is rampant around Argentinian political keynotes.

After the Falklands/Malvinas War (2nd

April 1982 – 14th

June 1982), Argentina completely lost the

war, with total 649 soldiers been deceased, over 10,000 Argentinians been captured by British

army.1920

In 1990, cut off diplomatic relations were re-established. Reinstated diplomatic ties led

both governments installing an embassy in London and Buenos-Aires respectively.21

Currently Argentina is taking care of the South American regional cooperative community

named ‘MERCOSUR’ (Mercado Común del Sur, in Spanish).22

Also Argentina is leading the group

with Brazil. This MERCOSUR is consisted of 5 official members including Argentina, Brazil,

Paraguay, Uruguay and Venezuela with 5 associated members Chile, Bolivia, Peru, Colombia and

Ecuador. By actively communicating with other member states in the Common Market Council,

Argentinian Minister of Foreign Affairs is shepherding the Latin American cooperative society with

the peaceful foreign affairs issues among the neighbouring states. Furthermore, Argentina’s foreign

policy is aiming for the formation of the Latin American collaborative community based on the

peaceful economic cooperation and lessening military conflicts around the borders.23

16

“Useful Guide for Brazilians Argentina - Official Promotion Portal for Argentina” Retrieved 28 November 2010

17 "Special committee on decolonization reiterates call on Argentina, United Kingdom to resume negotiations on

Falklands/Malvinas issue”. 2 April 2016

18 “Research Project on the History of the Relations between Argentina and Chile,” (1978-2000)

19 Tulchin, Joseph S. "The Malvinas War Of 1982: An Inevitable Conflict That Never Should Have Occurred," Latin

American Research Review, 1987, Page 123–141

20 "Falklands 25: Background Briefing". Ministry of Defense, Retrieved 1 November 2009.

21 “British embassy in Buenos Aires”, “Argentine embassy in London” Websites

22 MERCOSUR Official Website “http://www.mercosur.int/”

23 Samuel A. Arieti, The Role of MERCOSUR as a Vehicle for Latin American Integration, 『Chicago Journal of

International Law』 Volume 6, Page 761-773 (2005-2006)

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5. Regional and Global Influence

Argentina has played a very important role in the regional community within the last years,

even though as a developing country hasn't reached fully potential in a global arena, it has definitely

evolved in a remarkable way mostly because of the influence it has along with some of the countries

in South America like Brazil, Chile and Colombia.

Regional influence

If we look at the regional situation Argentina will have we can see clearly a situation of

power in comparison with the countries outside of MERCOSUR which means that Argentina will

focus its relations mainly in the countries within this union because it facilitates its own situation, as

we projected in the economic relations Brazil will still continue to be the most important actor of the

country.24

Nevertheless Argentina is sometimes seen as a country in the middle of the game25

, meaning

its not seen as a fully regional power but is also never part of the lowest rankings, this situation will

eventually evolve within the next decades and Argentina will regain the regional respect it had years

ago before the crisis of the 30’s changed its entire economic, social and political situation.

This regional influence will be represented in different areas, in most of them Argentina

already has a “stable” place but with the projection the ranking its supposed to increase.

In armaments Argentina once had the most powerful army in South America and even though

in numbers it won’t be able to reach other countries it will definitely provide pilots among the best of

the world and with quality training; the economic influence in the regional area will be major and it

will only fall behind Brazil but this position of power will allow the country to be considered as a

major actor in the region. Argentina will have the best position among the countries in the region in

urban infrastructure with cities as Buenos Aires positioned in very good rankings.26

So in general the regional influence of Argentina will definitely grow and it will take one of

the most important places in the region of South America and neighbouring countries.

Global Influence

In the global atmosphere Argentina will increase its relationships with global superpowers

like China, India and the United States, nevertheless this increase will no be as fast as it might be

expected giving the instability Argentina is currently facing. The position of power it has as one of

the most important members of MERCOSUR will allow it to be considers as a major growing power.

24

La Argentina y sus relaciones con las distintas regiones económicas del mundo. (n.d.). Retrieved April 05, 2016

25 C. V. (2013, November 20). La idea de una Argentina potencia es irrealizable. Retrieved April 5, 2016

26 F. (2012). Argentina Pais Emergente. Retrieved April 05, 2016

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According to the world bank Argentina is considered nowadays as one of the most solid

emergent powers and that its a situation that will be extremely exploited, the country will gain major

influence mainly because of its improvements in human development and quality of life. South

America’s third-largest economy has expanded at an average annual rate of 7%27

and the growth is

increasing, definitely the three most important aspects that will shape the future of this country in the

international arena will be the achieving of energy independence, the increasing of the speed of

industrialization in order to reduce imports, boost exports and achieve a new framework that allows

for the creation of more jobs and even better salaries and the macroeconomic stability based on

integrated infrastructure, to strengthen competitiveness and attain real, long-term income gains.28

The goal of the Fernández de Kirchner government has always been to create an international

competitiveness where Argentina can play an important role and a place where it can fully develop

its potential.

According to the words of Axel Kicillof, Argentine Ministry of Economy and Production,

“There are American companies, from the industrial and financial sectors, who have business

interests in the country. It is a myth that Argentina is isolated from the world and that it doesn’t have

any foreign participation in its economy, we are open to all those who want to take chances in

Argentina and make genuine and productive investments.”

And that is the statement that will be significantly important in the development of this nation

in the coming years, Argentina has a very strong foundation and if the direction continues in the right

path we could be seeing at one of the most powerful powers in the region of South America and a

very important player in the global environment that could shape completely the international

atmosphere.

27

Oviedo, E. D. (2015, August 4). Página/12 :: Economa :: La influencia de la potencia emergente. Retrieved April 05,

2016

28 Future growth prospects: Robust, sustainable, diversified. (n.d.). Retrieved April 05, 2016

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6. Population

Nowadays Argentina has one of the lowest population growth rates in the whole Latin

America. Its population is growing very slowly at a rate of virtually 1% per year. However, the odds

are that Argentina’s population is likely to approach 55,444,775 people by 2050, which puts it on the

36th

place of the most populous countries in the world.29

For this reason, current predictions of this

very sizeable country show the gradual growth in density, account for 20 people per square kilometer

in 34 years with the growth rate 0,4 %. Approximately 87,2 % of the population is likely to live in

urban areas. Current scientific researches point out four important demographic evidences inherent to

the future of the state.30

Firstly, Argentina is going to experience advanced demographic transition in relation to the

rest territories of Latin America. However, it is not so progressive in comparison with European and

OECD member states.

Secondly, the rate of mortality and fertility is more likely to experience notable decline rather

than in other countries of South America. Overall, the total fertility rate per woman is presumed to

decrease substantially to 2.1 over the next 34 years’ time span from 2016 to 2050.31

As a result, the

proportion of elderly population will constitute nearly 19 % of the whole population. The problem

with aging population may interrupt further economic growth and produce more pressure on

institutions responsible for dealing with changing demands and needs.32

Thirdly, drastic changes in the population age structure are expected to follow. The future

progression for Argentina is called “from pyramid-to-pillar” which is different from the standard

narrow-top population pyramids with youngsters on the bottom.33

Moreover, to run the forecast for

2050, life expectancy at birth is assumed to reach its whopping 80 years old in total (84 years for

females and 76 years for males). In addition to that, feminization aging is foreseen, which makes

women more prone to stay survive their partners, stay in widowhood and frailty without support.

Finally, the period from 2015 to 2040 is defined as the most favorable age structure time for

economic prosperity. It means that Argentina experiences its demographic bonus, when the

proportion of working age productive people accomplishes its height. In turn, productivity of labor

force and economic boost will take place. After 2041, beneficial period for growth will be over.34

29

Gragnolati, Michele, Rafael Rofman, Ignacio Apella, and Sara Troiano. “ As Time Goes By in Argentina: Economic

Opportunities and Challenges of the Demographic Transition.” Directions in Development., Washington, DC: World

Bank 2015

30 United Nations, Department of Economic and Social Affairs, Population Division, Population Bulletin of the United

Nations: Completing the Fertility Transition, Special Issue Nis. 48/49, 2002.

31 United Nations, Department of Economic and Social Affairs, Population Division, “World Population Prospects: The

2015 Revision, Key Findings and Advance, Tables. Working Paper No. ESA/P/WP.241, 2015

32 United Nations, Department of Economic and Social Affairs, Population Division. “World Population Ageing 1950-

2050”, 2015

33 United Nations, Department of Economic and Social Affairs, Population Division, “World Population Prospects: The

2012 Revision” New York, 2013

34 United Nations, Department of Economic and Social Affairs, Population Division, “World Population Prospects: The

2012 Revision”, Population density New York, 2013.

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Furthermore, the likelihood of subsequent falling of net migration rate to zero is incredibly

high. The main reason is that immigration of foreigners for permanent residence is supposed to be

compensated by emigration of native citizens from Argentina.3536

Demographic changes in 50 years 2000 2050

Population (thousands):

Total 37 031.8 ~55,444,775

Age 0-14 10 264.9 10 749.3

Age 15-64 23 174.4 34 055.0

Age 65+ 3 579.4 34 055.0

Female propportion 18 868.3 27 778.3

Male proportion 18 163.5 26 744.0

Growth rate (percentage) 1.2 0.4

Ageing index 48.1 118.5

Median age (years) 27.8 38.5

Total fertility rate (per woman) 2.4 2.1

Dependency ratio (total) 59.8 60.1

Figure 2. Table. Potential Argentinian population differences in 50 years37

To recapitulate, demographic change in Argentina is by far one of the most influential forces

shaped the structure of economic and social policy.38

It has direct impact on the state consumption,

distribution of financial system, social services expenditures, employment programs, health and

education. Admittedly, it is population that determines tax base, pensions, retiring period and poverty

rates.39

35

The World Bank, Ignacio Apella, “Argentina’s challenge: getting rich before getting old”, January 2015

36 The World Bank, “Population Projections”, 2011.

37 Official UN report, «http://www.un.org/esa/population/publications/worldageing19502050/pdf/035argen.pdf»

38 United Nations, DESA, Population Division, “World Population Ageing” (1950-2050), Executive summary.

39 Alejandra Pantelides, “Completing the fertility transition: the case of Argentina”

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7. Conclusion

Argentinian economic power is definitely growing, even though this growth was not always

severely increasing every year it has definitely shown some potential within the last years, Argentina

is expected to be one of the most powerful economies in Latin America and some of the strongest in

the entire world, this is because of its inputs in several important areas like the fishing industry,

modernisation of equipments, non-traditional product development plans, improvement of the

healthcare system which generates more acceptance from outside partners and mostly the fully

development of the agriculture business.

By analysing the tendency of Argentinian foreign affairs, we have concluded the fact that

Argentina now gradually tries to get rid of minor political and military conflicts which were

devaluing the future potential of the whole continent and the surrounding areas. Through maintaining

the scheme of cooperative Latin American countries based on the Argentinian lead, the Argentinian

government has been successfully launched MERCOSUR, by resolving past conflicts with Brazil

and Chile. Also by stepping forward as the future contender of the Latin American economic power,

Argentinian relations with neighbouring countries is attaining the regional influence to Argentina

itself. By applying liberalistic international relations theory with peaceful foreign policy, Argentina

is now preparing for becoming as the leader of the cooperative Latin American intergovernmental

community.

Influence in the regional and global area are projected to increase leading to a further

internationalisation of the country, the first step will be to integrate even more the South America

region through some of the unions mentioned before, nevertheless this unions will also evolve and

will have major changes in order to fully succeed with their original objectives . The influence in the

global level will be accomplished by the integration with some of the superpowers mostly The

United States and China, furthermore the relationship among Argentina and European countries will

also grow in a way that both parts benefit from each other support. Definitely the most important

aspect will be to strengthen the influence Argentina had already in a regional level to a global one.

According to projections accomplished by scholars, Argentinian population is likely to

experience significant expansion and increase in its density; however, the growth rate is supposed to

fall. By 2050, decreasing dynamics was predicted to happen with fertility and mortality. Following

consequences include drastic reforms in a majority of realms in the policy of the state as well as

changes in government expenditures and social programs funding.