Argentina Consultancy Role

What Are the Major Problems Facing the Citizens of Argentina

The citizens of Argentina are facing severe environmental threats such as deforestation and pollution. The resulting agricultural expansion by creating more space for the cultivation of the soybeans has been a threat to the existence of some of the interminable serving natural forests which have been of great value to the society such as Yungas cloud forest, Ecoregion, and Chaco. While the most recent soybean farming expansion in Argentina has been relying on the existing agricultural land, new plans are underway to increase the soybean production for export, and this implies that the forest might be cleared to provide this space(Lapegna, 2016). Beef farming in Argentina is also posing a threat to the existence of the forests in the country. There is a real beef farming in the Espinal Ecoregion, and this has been a threat to the survival of grasslands and forests.

The high inflation rate in Argentina is a significant economic problem that the citizens are forced to deal with in the country. The current inflation rate in Argentina stands at 20% down from 40% in 2018, and this follows the new policies which have been introduced by the current president which aim at solving the issue. During the period between 1975 and 1990, the average inflation rate in Argentina was maintained at 300%, and this means that the commodity prices were always doubled(Tommasi, 1992). In 1989, the inflation rate was explosive, and the costs of goods rose before the situation was restored. The high inflation rate in Argentina has always resulted into the rise in the price of commodities and necessary items, and this has made life unbearable in the country as the majority of the citizens are forced to live in extreme poverty.

The inequality in the National health care system of Argentina is another serious problem that is faced by Citizens. The government of Argentina has failed to ensure that all its citizens can access healthcare needs, which is common among the rural populations and needy individuals. Moreover, Argentina’s public health sector is inaccessible, overcrowded, inadequate facilities and offers insufficient services to the sick citizens(Cia et al. 2018). In contrary, most of the urban centers have high-quality health services and uncrowded health services which are offered by the private clinics. However, the majority of the Citizens are not in a position to afford private healthcare system, which serves only wealthy individuals in society.

What are the Historical Factors That Led to the Emergence of these Problems?

After the introduction of Soybean in Latin America in 1815 from Chinatown by the Japanese, the crop spread to various parts of the continent. Being endowed with the most favorable conditions for the growth of this crop, Argentina became the leading producer of Soybean in Latin America. As a result of the high demand for soybeans, farmers began encroaching the forest to expand the production of the crop which consequently resulted in environmental threats. Some of the historical factors which triggered the high demand for soybean include; the research findings of the nutritional content of soybean, the increasing population growth in America and the food shortages resulting from World War II.

The high inflation rate in Argentina is traced back to the 1970s when the country’s inflation rate went high to an average of 300% for about 15 years. In the year 1989, Argentina’s inflation went high to abnormal rates 3079% and this forced the government to form a currency board in the year 1991 to ensure that the peso value remained intact with the dollar. For some time, this board was able to control the high inflation rate in Argentina. However, in the mid-1990s the value of the dollar and the board was overhauled, which harmed the country’s competitiveness and leading it into recession. The persistent inflation forced the government of Argentina to borrow pesos at an interest rate of 25%.

The continued high inflation rates in Argentina in, the course of the years is attributed to the inequality in the country’s healthcare system. Due to the high inflation rates, the Argentines were forced to buy commodities at very high prices, which subjected majority of the population to extreme poverty, thus, making it difficult to afford basic needs such as food and healthcare. The high inflation rate has necessitated a cut of about 40% of the health expenditure within five years(Thornton, 2008). The low funding of the healthcare system in Argentina has resulted in a situation where inadequate facilities and low-quality services characterize the public health sector. In contrary, the wealthy individuals in Argentina can access quality health services which are offered by the private health sector.

What Is Your Estimate of the Economic State of the Country And Its Future Prospects?

Currently, Argentina has got a GDP of about US dollars 628 billion which is considered among the largest economies in Latin America. The country has gained an enormous amount of natural resources which comprises of energy and agricultural products. The presence of extraordinary fertile lands in Argentina favors food production and livestock rearing in the country, Argentina has also got innovative services in the technology industry and the manufacturing subsectors. According to the statistical reports in the previous year, 27.3% of the Argentinians lived in poverty while 4.9% were under extreme poverty(Thornton, 2008). In 2017, Argentina registered an economic growth of 2.9%, however, in 2018 the country began facing an economic turmoil as the country’s economic activity began to slow down to the point that it was expected to end in recession. During this time, the Argentine government fiscal deficit had attained 1.1% in the first quarter of the year 2018, and this was expected to amount to an expectation of 2.7% of the GDP. To meet this target, the government is expected to raise an extra $8.9billion to attain the deficit target. The inflation targets are projected to 2020. In 2019, the objective is set at 17%, followed by 13% for 2020 and finally 9% in 2021. In this way, there will not only be increased pressure on the income of the consumers but also but also a relatively high period oh high-interest rates.

In 2018 the Argentine peso also underwent a decline in its value, and this resulted in increased inflation in the country. Even though the current president of Argentina has introduced new measures which are meant to reduce inflation in the country, the country is still expected to struggle with a high rate of inflation and attain a fiscal balance in around 2020.

The Most Significant Problem in Argentina and Its Solution

I think that inflation is the most significant problem that the citizens of Argentina are struggling to persevere in the country. For so many years, the government of Argentina has tried to come up with new measures that can help in keeping the high rate of inflation which is affecting the country’s economy in diverse ways. The high inflation rate in Argentina has also affected nearly all sectors of the economy in Argentina rendering the government less effective. To solve this crisis, the government will introduce policies such as:

The contractionary money policy. This involves reducing the money circulation within the country’s economy in ways such as cutting the prices of bonds and raising the interest rates. This method will effectively mitigate the expenditures because, in situations where there is low circulation of cash, the people with money would prefer to keep it instead of engaging in unnecessary spending. The given situation also implies that little credit is available and this discourages people from spending. The reduction of expenditures is, therefore, an important measure to be applied during inflation because it helps in halting economic growth. The contractionary policy can be carried out in ways such as using the central bank to raise interest rates to discourage people from borrowing money.

Application of the supply side policies. The supply-side policies are meant to help in increasing a country’s productivity and competitiveness. For example, the privatization and deregulation measures can be imposed in a country to make its companies more competitive and productive in their respective industries. However, this method works for an extended period. The use supply-side policies are however limited in that they cannot be applied in solving a sudden rise in the inflation rate.

The implementation of the fiscal policy. The budgetary policy entails the government alteration of its taxation and spending levels as a means of regulating the aggregate demand within the country(Sims, 2016, August). This can be done through tax increments to cut the government expenses.

Wage control. The government can also introduce new means of controlling the existing wage rates to reduce inflation. If the wages are allowed to increase quickly, it is likely to trigger a rise in the rate of inflation. If the government allows slow growth in the wage rates, then the rate of inflation is likely to decline.

The government can also adopt the methods of reducing the floating cash in the country. This entails implementing either direct or indirect methods of lowering the money circulation within the economy. This is done through means such as raising the interests to be paid on the bonds to attract the investors and recalling the debts owed to the government. By raising the interest on bonds, the currency exchange rates will rise as the demand will be getting higher. Consequently, the imports will increase as exports decreases. These two methods are capable of reducing the available cash because they take money from the banks, individuals, companies, and investors back to the government where it can be regulated.



Cia, A. H., Stagnaro, J. C., Aguilar-Gaxiola, S., Sustas, S., Serfaty, E., Nemirovsky, M., …&Benjet, C. (2018). Twelve-month utilization rates and adequacy of treatment for mental health and substance use disorders in Argentina. Brazilian Journal of Psychiatry, (AHEAD), 0-0.

Lapegna, P. (2016). Genetically modified soybeans, agrochemical exposure, and everyday forms of peasant collaboration in Argentina. The Journal of Peasant Studies, 43(2), 517-536.

Sims, C. A. (2016, August). Fiscal policy, monetary policy, and central bank independence. In Kansas Citi Fed Jackson Hole Conference.

Thornton, J. (2008). Inflation and inflation uncertainty in Argentina, 1810–2005. Economics Letters, 98(3), 247-252.

Tommasi, M. (1992). Inflation and relative prices: evidence from Argentina. Los Angeles: Department of Economics, University of California.