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Order Code RS21113
Updated October 12, 2006
CR8 Report for Congress
Received through the CRS Web
Argentina: Political and Economic Conditions
and U.S. Relations
Mark P. Sullivan
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
Summary
Argentina's restructuring of over $100 billion in defaulted bond debt in June 2005
demonstrated the country's emergence from its 2001-2002 economic crisis that had
caused severe stress on the political system. Current President N6stor Kirchner, elected
in 2003, has made bold policy moves in the areas of human rights, institutional reform,
and economic policy that have helped restore Argentines' faith in democracy. The
October 2005 legislative elections demonstrated strong support for President Kirchner,
whose popularity at this juncture bodes well for his re-election if he chooses to run in
the October 2007 presidential election. Economic growth has rebounded since 2003,
and in January 2006, Argentina paid off its $9.5 billion debt to the International
Monetary Fund. Looking ahead, the government faces such challenges as reducing
poverty and controlling inflation while maintaining strong economic growth. Issues of
concern to Congress include continued cooperation with Argentina on counter-terrorism
issues and progress in Argentina's investigation of the 1994 Argentine-Israeli Mutual
Association bombing. For additional information, see CRS Report RL32637,
Argentina's Sovereign Debt Restructuring, and CRS Report RL33620, Mercosur:
Evolution and Implications for U.S. Trade Policy, by J. F. Hornbeck.
Political and Economic Background
Argentina's political upheaval in late 2001 that led to the resignation of President
Fernando de la Rua should be viewed in the context of its historical political
development. Before 1930, Argentina enjoyed some 70 years of political stability that
facilitated rapid economic development and made Argentina one of the world's wealthiest
countries. It ranked seventh in the world in per capita income in the 1920s.1 In contrast,
from 1930 until 1983, Argentina experienced significant political instability, characterizedCongressional Research Service + The Library of Congress
Thomas G. Sanders, "Argentina and the Politics of Economic Distress," UFSI Field Staff
Reports, 1988-89, No. 4, p. 1.
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Sullivan, Mark P. Argentina: Political and Economic Conditions and U.S. Relations, report, October 12, 2006; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc808893/m1/1/: accessed July 17, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.