Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Historically, however, Argentina's economic performance has been very uneven. Early in the twentieth century it was one of the richest countries in the world, though it is now an upper-middle income country. Argentina is considered an emerging economy by the FTSE Global Equity Index and still benefits from Latin America's highest Human Development Index.
Argentine exports are fairly well diversified; but, though agricultural raw materials were only 20% of the total in 2007, exports are (including processed goods) still 55% agricultural in origin. Soy products alone (soybeans, vegetable oil, etc.) account for almost one fourth of the total. Argentina's leading export only a generation ago, cereals (mostly maize and wheat) make up less than one tenth.
Industrial manufactures today account for 30% of Argentine exports. The country exported over 316,000 motor vehicles in 2007 (mostly to Brazil and Mexico) and, including auto parts, this is today the country's leading industrial export and about 10% of the grand total. Chemicals, steel, aluminum, machinery and plastics account for most of the remaining industrial exports.
A net energy importer until 1981, Argentina's fuel exports began increasing rapidly in the early 1990s and today account for about an eighth of the total. Refined fuels make up about half of this; crude petroleum and natural gas exports have been, together, hovering around US$3 billion in recent years.
Argentine imports have historically been dominated by the need for industrial supplies, machinery and parts; together, these amounted to US$34 billion in 2007 (three-fourths of the total). Consumer goods (including motor vehicles) make up most of the rest.
U.S. direct investment in Argentina is concentrated in telecommunications, petroleum and gas, electric energy, financial services, chemicals, food processing, and vehicle manufacturing. The stock of U.S. direct investment in Argentina approached $16 billion at the end of 1999, according to embassy estimates. Canadian, European, and Chilean firms – other important sources of capital – have also invested significant amounts. In all, foreign nationals hold over US$66 billion in direct investment.
Brazil has, since 2000, also became an important investor in Argentine assets and Spanish companies in particular have entered the Argentine market aggressively, with major investments in the petroleum and gas, telecommunications, banking, and retail sectors. Several bilateral agreements play an important role in promoting U.S. private investment. Argentina has an Overseas Private Investment Corporation (OPIC) agreement and an active program with the U.S. Export-Import Bank. Under the 1994 U.S.-Argentina Bilateral Investment Treaty, U.S. investors enjoy national treatment in all sectors except shipbuilding, fishing, nuclear-power generation, and uranium production. The treaty allows for international arbitration of investment disputes. In October 2004, China announced it would invest US$20 billion in Argentina. An agreement provided for about Chinese investment in railway reconstruction (worth US$8 billion) and oil research (US$5 billion). The agreement failed to materialize.
Argentina attracted $3.4 billion in foreign direct investment (FDI) in 2006; as a percent of GDP, this FDI volume was below the Latin American average. Current Kirchner Administration policies and difficulty in enforcing contractual obligations had been blamed for this modest performance. A considerable improvement was recorded in 2007, however, when foreign nationals invested US$6.3 billion