Pestle analysis of Argentina. The Argentina Republic is a South American country. It shares the border with the South Atlantic Ocean, Uruguay, Brazil, Paraguay, and Bolivia. Buenos Aires is the capital of Argentina.
The total area of Argentina is 1,073,500 square miles, and it’s the world’s 8th largest country in terms of size and area. Approximately more than 44,938,712 people are populating the country, and it’s the 31st world’s most populated country.
Modern-day Argentina’s history dating back to the Paleolithic period, the western Spanish colonist invaded the country in the 16th century. Argentina declared its independence from the Spanish crown on July 09, 1816, but the civil war ended in 1861.
Argentina used to be the world’s richest country in terms of high GDP and per capita income from the late 19th century to the early 20th century. 1930s great depression, political instability, and economic crisis pushed her into the underdeveloped countries. However, she maintained her position in the world’s top 15 countries for several decades.
Today, we’ll discuss the pestle analysis of Argentina. It would focus on the macro-environmental factors of the world’s leading developing country. Here’s the pestle analysis of Argentina as follows;
Political factors affecting Argentina
Argentina has a stable political environment in the country for the past one and a half-decade. The government of Alberto and Cristina are developing the country’s infrastructure, attracting foreign investors, and launching new policies to promote regional trade.
Relying on International Policies
Many critics say that the Argentinean government is overly relying on the international policies and IMF to solve issues like lower economic growth, corruption, and higher inflation rate. As a result, the popularity of Alberto and Cristina among voters has declined.
Argentina has been maintaining effective relations with the UN. The government is working on improving the relationship with the US government in order to develop its science and tech industry. However, her relationship with the UK over the issue of the Falkland Islands is not good.
Economical factors impacting Argentina
According to an estimate, the annual nominal GDP of Argentina in 2020 was 444.458 billion US dollars, it’s 25th world’s highest. Out of which, the per capita income of the country was 9890, and it’s 53rd world’s highest.
Argentina has expanded the trading relationship with the Chinese government; it has helped the country’s economy to make the trade surplus. However, the country is facing a severe crisis of inflation. There’s a gap of 15% between the official and private sources measuring the inflation rate. Most importantly, the government has recently increased the economic regulations and it resulted in the form of lower economic freedom.
The Argentinean government has recently nationalized the private pension funds and the YPF Spanish oil Company Repsol. This step has confused many foreign and local investors. However, many economists suggest that the country is in an economic recession because of the lower foreign reserve, high public debt, and inconsistent economic growth.
The automobile industry has been growing consistently in Argentina for the past few years. Now, the government is working to attract investment in the automobiles sectors. In fact, she’s offering incentives and easy licensing to lure investors.
Imports & Exports
Argentina’s main imports are Iron & Steel, chemical goods, medical equipment, organic chemicals, pharmaceuticals, plastics, mineral fuels, electrical equipment, machinery, and vehicles. She imports it from Mexico, Germany, the USA, China, and Brazil.
However, Argentina’s top exports are mineral fuel, meat, Soybeans, Delivery Trucks, Soybean Oil, corn, and soybean meal. She exports it to Vietnam, Chile, China, the USA, and Brazil.
Social factors affecting Argentina
Approximately 44 million people are populating Argentina, and over 96% are European descendants. However, 79.6% believe in Christianity, and 18.9% don’t believe in any religion. The country has a high standard of living, education, the healthcare system as compared to the other Latin American countries. The national language of the country is Spanish, and she’s the world’s largest Spanish-speaking country.
Argentina is facing social challenges like an increasingly aging population and high urbanization by migration from rural areas. The school dropout rate is very high, and it resulted in the form of an unskilled workforce. According to an estimate, the unemployment of Argentina in 2021 is 12.3% and it has amplified during the pandemic of covid-19.
Technological factors affecting Argentina
Argentina has made significant progress both in the IT and telecom industries. It’s because of the government investment and penetration in the country’s rural areas.
Argentina is facing a severe energy crisis, and the net energy import is increasing. That’s why the country is showing great interest in science and technology. The country has limited funds to support research and development in the tech industry. It resulted in the form of lower-tech innovation and limited patents. a
Legal factors impacting Argentina
Argentina has a federal republican government and comprehensive legal system, and every province has its constitution. The government relations with the worker unions increase the annual wage by approximately 25% to 35%. However, the corporate and personal income tax rate is 35%. The high taxes are pushing away the potential foreign investors.
Environmental factors affecting Argentina
Argentina has a lot of natural resources and biodiversity. The country is exploiting natural resources to a great extent in order to achieve economic growth. However, the country is facing environmental challenges like air and water pollution, destruction of natural resources and habitat, deforestation, and industrial waste.
The Argentinean government has realized the degradation of natural resources and climate change. Therefore, the government has started collaborating with multinational companies to produce biofuel and develop clean energy.
Argentina is also working with the Chinese government to launch the largest wind power project in Latin America. It would fulfill 4% of the country’s energy requirement.
Conclusion: Argentina Pestle Analysis
After an in-depth study of the pestle analysis of Argentina, we have concluded that Argentina is indeed the world’s leading under-developing country. Higher unemployment, tech issues, and environmental challenges are some of the main issues of the country. Argentina should lower the taxes and inflation to attract foreign investors, it would help the country to regain past glory.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.