LegiStorm

Summary:

Argentina, a South American country with a population of almost 43 million, has had a vibrant democratic tradition since its military relinquished power in 1983. Current President Mauricio Macri—the leader of the center-right Republican Proposal (PRO) and the candidate of the Let's Change coalition representing center-right and center-left parties—won the 2015 presidential race and was inaugurated on December 10, 2015. He succeeded two-term President Cristina Fernández de Kirchner, from the center-left faction of the Peronist party known as the Front for Victory (FPV), who was first elected in 2007 (succeeding her husband, Néstor Kirchner, who served one term). In a close race, Macri defeated the FPV's Daniel Scioli. Macri's election ends the 12-year run of so-called Kirchnerismo that helped Argentina emerge from a severe economic crisis in 2001-2002 but also was characterized by protectionist and unorthodox economic policies and at times difficult relations with the United States. Since Macri's Let's Change coalition does not have a majority in Argentina's Congress, the new president will need to reach out to Peronist party factions to secure approval of the coalition's legislative agenda. Argentina has Latin America's third-largest economy and is endowed with vast natural resources. Agriculture has traditionally been a main economic driver, but the country also has a diversified industrial base and a highly educated population. In 2001-2002, a severe economic crisis precipitated by unsustainable debt led to the government defaulting on nearly $100 billion in foreign debt owed to private creditors, the International Monetary Fund (IMF), and foreign governments. Subsequent Argentine administrations resolved more than 90% of the country's debt owed to private creditors through two debt restructurings offered in 2005 and 2010; repaid debt owed to the IMF in 2006; and, in May 2014, reached an agreement to repay foreign governments, including the United States. Reaching a settlement with the private creditors that did not participate in the exchanges—the "holdouts"—has been a more protracted process. Macri made it a priority to resolve the 15-year standoff with private creditors, and, in February 2016, the Argentine government reached an agreement with the major remaining holdouts. If implemented, this agreement could help Argentina normalize its "rogue debt" reputation and return to capital markets. U.S. Relations Macri's election has brought to power a government that has emphasized improving relations with the United States. U.S.-Argentine relations generally are characterized by robust commercial relations and cooperation in such issues as nonproliferation, human rights, education, and science and technology. At times, however, there were tensions in relations under the Kirchner governments, including over the U.S. judicial cases regarding the holdout creditors. In addition to resolving the long-standing dispute with Argentina's holdout creditors, Macri has expressed similar views as the United States regarding concerns about human rights problems in the Americas. He has been particularly critical of the Venezuelan government's repression of its political opponents. A continued interest of the U.S. Congress is progress in the investigation and prosecution of those responsible for the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) that killed 85 people, as well as the investigation into the January 2015 death of Alberto Nisman, the prosecutor in the AMIA investigation. Both Iran and Hezbollah are allegedly linked to the AMIA bombing. The Macri government announced that it would not file an appeal against an Argentine court ruling that declared unconstitutional a 2013 agreement with Iran to jointly investigate the AMIA bombing. The government has also taken efforts to press forward with the AMIA investigation. Demonstrating the significant change in U.S.-Argentine relations, President Obama is scheduled to travel Argentina March 22-24, 2016, on a state visit, with the goal of increasing bilateral cooperation in such areas as trade and investment, renewable energy and climate change, and citizen security. President Obama will also announce a comprehensive effort to declassify additional U.S. documents from the era of Argentina's so-called Dirty War, the 1976-1983 period of military rule in which thousands were killed. (See "President Obama's March 2016 Visit to Argentina," below.) This report provides background on the political and economic situation in Argentina and U.S.-Argentine relations. An Appendix provides links to selected U.S. government reports on Argentina.