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Argentina's economy has traditionally been based on agriculture, but the industrial and service sectors have also grown in importance in recent years. Livestock (cattle and sheep) and grains have long been the bulwark of its wealth; its cattle herds are among the world's finest. As an exporter of wheat, corn, flax, oats, beef, mutton, hides, and wool, Argentina rivals the United States, Canada, and Australia. Its other agricultural products include oilseeds, sorghum, soybeans, and sugar beets. Argentina is the world's largest source of tannin and linseed oil. The Pampa is the nation's chief agricultural area; however, since the 1930s there has been a great rise in production in other areas, especially in the oases of the Monte and the irrigated valleys of N Patagonia.
Although Argentina has a variety of minerals, they are of local importance and are not completely adequate to support the country's industries. Domestic oil and gas production has made the nation self-sufficient in energy; pipelines connect the oil and gas fields with Buenos Aires and other major refining centers. Argentina also exploits its ample hydroelectric resources. The large coal field of S Patagonia has low-grade coal.
Argentine industry, developed after World War I and long protected by a strong nationalistic policy, made the country virtually self-sufficient in the production of consumer goods and many types of machinery. Food processing (in particular meatpacking, flour milling, and canning) is the chief manufacturing industry; textiles, leather goods, and chemicals are also major products. Argentina's principal imports are machinery, metals, and other manufactured goods.
The chief trading partners are the United States, Brazil, and Italy and other European Union countries. Argentina is a member of the Southern Cone Common Market. In recent decades Argentina has experienced both inflation and recession. Privatization and other economic reforms begun by President Menem in the early 1990s produced unprecedented economic growth, but significant economic problems remain, including high unemployment, a massive national debt (due to freehanded government spending and widespread tax evasion). The economy was hurt by Brazil's recession and currency devaluation in the late 1990s, but the pegging of the peso to the dollar combined with Argentina's own economic problems resulted in economic collapse in 2001. As a result, by 2003 some 60% of Argentines now live in poverty.
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