Overview of Buenos Aires

Economy of Buenos Aires

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Argentina, along with Canada, Australia and the United States is considered a country of immigrants. Most Argentines are descended from colonial-era settlers and of the 19th and 20th century immigrants from Europe. Approximately 86.5% of Argentina's population is of European descent. Since the end of the 19th century, Argentina's population more than doubled, due to large-scale European immigration during the immediate post-war decades.. Up to 25 million Argentines have some degree of Italian descent, around 60 % of the total population. An estimated 8% of the population is mestizo, or of mixed European and native heritage. A further 4% of Argentines were of Arab or East Asian heritage. In the last national census, 600,000 Argentines (1.5%) declared themselves to be Amerindians

Argentina is currently classified as a secondary emerging market by the World Bank. Argentina is also one of the G-20 major economies. Argentina has abundant natural resources, a well-educated population, an export-oriented agricultural sector and a relatively diversified industrial base. Domestic instability and global trends, however, contributed to Argentina's decline from its noteworthy position as the world's 10th wealthiest nation per capita in 1913 to the world's 36th wealthiest in 1998. Systemic problems have included burdensome debt, uncertainty over the monetary system, excessive regulation, barriers to free trade, and a weak rule of law coupled with corruption and a bloated bureaucracy throughout much of its history. Even during its era of decline between 1930 and 1980, however, the Argentine economy created Latin America's largest proportional middle class. However, this segment of the population has suffered from a succession of economic crises between 1981 and 2002, and the relative economic decline became absolute.

Buenos Aires is the financial, industrial, commercial, and cultural hub of Argentina. Its port is one of the busiest in South America; navigable rivers connect the port to northeast Argentina, Brazil, Uruguay and Paraguay. Buenos Aires is the distribution hub for a vast area of the south-eastern region of the continent. The economy in the city proper alone, measured by Gross Geographic Product, totalled US$ 84.7 billion (US$ 28,200 per capita) in 2006 and amounts to nearly a fourth of Argentina's entire economic output. Metro Buenos Aires constitutes the 13th largest economy among the world's cities. The Buenos Aires Human Development Index (0.923 in 1998) is high by international standards.

The city's services sector is diversified and well-developed, and accounts for 76% of its economy (compared to 59% for the service sector for all of Argentina). However, the financial, business and real-estate services sector is the largest single sector of the city's economy, with 31%. Finance in Buenos Aires is especially important to Argentina's banking system, accounting for nearly half the nation's bank deposits and lending. Nearly 300 hotels and another 300 hostels and bed & breakfasts are licensed for tourism in Buenos Aires, and nearly half the rooms available were in four-star establishments or higher. Manufacturing is, nevertheless, still prominent in the city's economy.

To the west of Buenos Aires is the Pampa Húmeda, the most productive agricultural region of Argentina which produces wheat, soybeans and corn. Meat, dairy, grain, tobacco, wool and leather products are processed or manufactured in the Buenos Aires metro area. Other leading industries are automobile manufacturing, oil refining, metalworking, machine building and the production of textiles, chemicals, clothing and beverages. The city relies on local income and capital gains taxes for 61% of its revenues, while federal revenue sharing contributes 11%, property taxes, 9%, and vehicle taxes, 6%. Other revenues include user fees, fines and gambling duties. The city devotes 26% of its budget to education, 22% for health, 17% for public services and infrastructure, 16% for social welfare and culture, 12% in administrative costs and 4% for law enforcement. Buenos Aires maintains low debt levels and debt service requires less than 3% of the total budget.

Update 29/05/2009

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