A) Introduction and overview of the country
Argentina is the second-largest country of South America (1.1 million square miles). Its population in 2005 was about 38.6 million. Its official language is Spanish. In the 19th century European investments and the integration of Argentina into the world economy were combined to create a modern Argentina, introducing to it modern agricultural techniques. Subsequently, Argentina became one of the world 10¡¦ wealthiest nations based on rapid expansion of agriculture and foreign investment in infrastructure. In 1992 president Menem imposed peso-dollar parity to decrease the hyperinflation, adopt far-reaching market-based policies and dismantling a web of protectionist trade and business regulations, and implement an ambitious privatization program. These reforms contributed to significant increases in investment and growth with stable prices through most of the 1990s. Unfortunately, extensive corruption in the administrations of President Menem and President Fernando De la Rua (elected in 1999) shook confidence and destabilized the recovery. Also, while convertibility crushed inflation, its permanence damaged Argentina's export competitiveness and created chronic deficits in the current account of the balance of payments, which were financed by massive borrowing. The contagion effect of the Asian financial crisis of 1998 precipitated an outflow of capital that gradually mushroomed into a 4-year depression that culminated in a financial panic in November 2001. In December 2001, amidst bloody riots, President De la Rua resigned, and Argentina defaulted on $88 billion in debt, the largest sovereign debt default in history.
B) Political environment
Argentina is run by a republic government, constituted in 1853 and revise ...