Argentina Constitution

Argentina Constitution
Eric Anderson, Ivan John, Johnny Ceisel, Gigi Murad

Significant changes were made regarding the intermingling of church and state in the 1994 revision of the constitution of Argentina.  For the most part the electoral system seems well constructed and in place.  However, certain flaws still exist.  One major flaw is the issue of blanket lists also referred to as “listas sabanas.”  Many legislative elections have been corrupted in the past by political parties through the addition of unknown candidates to their respective candidate lists.  A second problem that needs to be addressed is the issue of compulsory voting.  This has the potential to skew electoral results, especially in countries with no NCA (“no candidate acceptable”) option on their voting ballots.

Listas sabanas is currently a controversial issue being debated by the Argentine people.  It refers to an electoral mechanism where multiple politicians are elected as a whole or “as a slate” according to their party’s candidate list.  The problem is that voters are forced to elect potentially undesirable candidates in order to vote for those they actually want. 

According to Latin Business Chronicle columnist Dan Krishock, “Argentina needs to increase accountability in the political system by eliminating the practice of using “blanket lists” of candidates for legislative elections. Under the current electoral system, for all national, provincial and municipal legislative elections, each party submits a list of candidates, ranked in order of preference. Following the vote, seats are apportioned to the parties based on the percentage of votes each gets.”

Voting for a party list instead of voting for each candidate individually allows a number of problems to occur.  For instance, a party in the Senate race can put an extremely strong candidate first on their list of candidates followed by a less popular candidate and so on.  Consequently, if they receive a large enough percentage of votes to be rewarded two seats, both candidates (the popular and the unpopular) will take office.  Another problem is that the entirety of listas sabanas isn’t generally known to the majority of voters; therefore if a party receives an overwhelming percentage of votes, unknown candidates will be elected.

Argentina has adopted many policies from the Constitution of the United States.  In the same manner, list voting needs to be changed to a system which elects candidates individually.  Without direct candidate voting, Argentine citizens will continue to vote for people they have never seen or heard of before.  They could potentially vote for someone they might dislike and disagree with, but due to governmental restrictions, they would have no choice but to cooperate with the individual after elections.  Only through the elimination of listas sabanas can a truly democratic method of electoral voting be realized.  Without it, the people of Argentina cannot be represented in the way they deem necessary.

            The second issue that needs to be addressed in the Argentine electoral system deals with voting.  All eligible Argentines are required to vote in every election.  This form of compulsory voting has caused a lot of problems in the past, not only in Argentina, but also in many other countries around the world.  Countries like Australia, who changed their system to divert from a compulsory voting system to a voluntary one, initially were afraid that many people would not come to vote for the political candidates.  Instead, the opposite occurred.  More people expressed genuine interest in political affairs within their country much to their surprise and a high volume of voters was still maintained.  This same idea has been promoted throughout democracies around the world and has been successful for the most part thus far.

            With this in mind, Argentina needs to change their system to a non-compulsory one.  No obligation should be placed on Argentine citizens to go out and vote if it is against their will to do so.  The government of Argentina will be surprised at how many people will actually take the initiative to vote if they were given this freedom of choice.  More emphasis will be placed in Argentine society to get involved in political elections if it is not mandatory.  The psychological complex that forces people to rebel against a rule will essentially be eliminated if compulsion is lifted.  People want to be free.  Penalizing people for not voting can be seen as oppressive, so libertarians argue that compulsory voting is a violation of personal liberties.  They argue that this type of voting contradicts democracy.  If no freedom is giving to a nation’s society, more public abuse will occur as form of protest against compulsory voting through the use of invalid balloting, such as deliberate spoilage of ballots or the submission of blank ballots.

            Through the elimination of mandatory voting, the Argentine government will also sift out the so-called “donkey voters”.  These voters are the people randomly fill out their voting ballots without having any knowledge of who they are voting for.  This pointless voting has cost countless politicians worthy of holding office to lose their sought-after positions.  Most of these people have no desire to vote and shouldn’t be forced to do so.  If compulsory voting is done away with, there will still be certain individuals who will exercise their right as citizens to vote without having any knowledge about the politicians running for office; however, this number will be statistically insignificant.  Donkey votes could be reduced with the inclusion of a “no preference” option. However, only through elimination of compulsory voting will a nation really obtain a full “consensus” of its people.

            By implementing both policies, Argentina stands to greatly improve their electoral system.  Electing representatives individually will prove to significantly decrease misrepresentation in the government.  Additionally, voters will be more aware of their representatives.  Optional voting will increase the quality of Argentine representatives and make for a more democratic electoral system.  In implementing both of these recommendations, the Argentine voting population will truly be represented and the electoral system as a whole will be improved. 

The investment firm should invest in Argentina in certain sectors that will provide a substantial return on investment.  We have outlined a few sectors that appear to be promising and we will detail our reasons why.  The main reason that stands out above all others is Argentina’s recent growth spree that has dominated other Latin American economies in the past few years.  In addition to the economic success the country is experiencing, there are other incentives to invest in Argentina via MERCOSUR agreements that encourage foreign direct investment in member states.
            Since their economic crisis in late 2001, Argentina has quickly rebounded and has posted an unprecedented 14 straight quarters of progress and continues to post growth rates in the 8-11% range which far exceeds the region’s average in the 3-5% range.  Argentina, along with Brazil, Paraguay, and Uruguay belongs to the Southern Common Market (MERCOSUR) which allows investment opportunities virtually unrestricted ability to invest in member states.  In Argentina alone, MERCOSUR provides a market to outside investors of roughly 40 million people, 11.9 million square kilometers, and a GDP of about US$ 722 billion.  Following the crash exports from Argentina have continued to steadily increase with a fall in imports, therefore showing their steady commercial and industrial prowess.  One of the main reasons for such progress is the capability of their highly-skilled labor force which boasts one of the lowest illiteracy rates in Latin America (only 2.6%).  Argentines are very hard-working and good at their respective jobs, yet demand relatively low wages when compared to those in the United States and Europe.
            In order to have a successful venture in Argentina, past sectors should be viewed with both optimism and criticism alike.  Many prospects have been attempted in the past, but not all have had overwhelming success like one would hope.  Outlined here are traditionally successful sectors to consider, as well as those to possibly avoid based on historical trends.  The most notable and arguably the most successful sector that has been the staple of the Argentine economy for generations is agriculture.  This sector includes, but is not limited to, beef, wine, soybeans, and tobacco with the former two associated with Argentina not just on an economic level but culturally as well.  Having one of the richest and most diverse ecosystems resulting from a variety of climates and the 8^th largest landmass in the world allows agriculture in Argentina to remain an economic workhorse.  Not only does the variety of agricultural sectors provide assurance of significant return, but so does the knowledge that as its forerunning economic sector, Argentina has had years of experience in the agriculture business therefore further reducing potential financial risk.  These years of experience have taught the Argentines invaluable low-impact soil conservation techniques, appropriate development of the agricultural product chain, and the nation has enjoyed a form of national branding that immediately associates some of the best quality beef and wine in the world with Argentina.
            Another interesting and often overlooked sector that has provided Argentina with unwavering revenue is that of the various soccer clubs around the nation.  A national pastime for citizens from birth to death coupled with fanatical support for respective teams, soccer allows the investor to enjoy steady net revenue usually regardless of the team’s performance and without the need for overt advertising campaigns.  The nation’s two largest and most popular clubs - River Plate and the Boca Juniors (Boca especially) already enjoy immense revenue not just from ticket sales but from the high volume of products and paraphernalia sold that comes with being a renowned club.  The real secret for investment success lies in the development of the fast-rising but less successful clubs.  Obviously clubs like River and Boca are already supported by companies with lots of capital therefore an investment in those clubs would involve more money spent in the effort than the return would reflect.  Small clubs with probably only a few local sponsors will for the most part remain unheard of unless significant outside investment is placed in them.  Clubs like these that already have a small and steady local fan-base and have enjoyed at least moderate to above-average success at a continuous pace require only capital investment and resulting media association to blossom.
            We feel that providing your firm with a brief overview of past sectors that have become either stagnant cash-cows or overall failures will alleviate the chance of falling into a similar investment trap.  The obvious sinkhole to avoid, resulting from the 2001 crisis, is any sort of investment bond situation, or any other investment mechanism that involves capital being directly invested into the nation’s stock markets.  While Argentina’s government allows for incredible potential and secure investments from a business perspective, the economy itself is still only a few years out of a major crisis and with three successive years of rapid growth, has not allowed itself the chance to stabilize.  Traditionally, even in the 1990s when Argentina was the economic envy of other nations in Latin America and all around the world, direct investments were not made in the nation’s markets, but rather offshore accounts that allowed for easy access to the nation’s prospering businesses.
            Outlined here are a few business sectors that we feel will provide the best return on investment with minimal risks.  Aside from the agricultural sector already outlined above, there a few other potential sectors that should be looked at.  Mining has become an important sector on Argentina’s economic horizon because of the recent strides taken by the government to promote international investment and stability.  The Law of Mining Investment has established a 30-year guarantee of stability both potential and already existing mining projects.  By providing capital and machinery and eliminating some overhead costs, the tax break encourages investment and as a result the market becomes more appealing.  In addition to all the incentives given by the government in this particular industry, the boom of this industry has been increasing and Argentina now occupies second place in the ranking of global investment opportunities.
            Real estate in Argentina currently occupies 45% of total national investment and is continuing to grow.  Argentina currently employs an older and more traditional method of fabrication of housing and commercial plots which results in inefficiency both in terms of energy consumption and from overall construction time.  A particular interest to investors from the United States is the need for more modern methods of constructing houses based on higher-quality U.S. technology.  This would result in faster production times and less money spent on heating and cooling homes and businesses, therefore resulting in endless market potential.
            Tourism in Argentina is an untapped investment potential with many investors viewing the nation from an outdated perspective.  Traditionally, Argentina is thought of as the land of the rich and therefore an expensive place for travel and recreation.  However, this is quite the opposite.  With a rapidly growing economy coupled with the influx of businesses to the nation’s major cities, recreation has become more important than ever to both the citizens and visitors alike.  The government has begun to notice this and has taken some strides to promote foreign expenditure in the nation including their views of foreign businesses and local businesses under the same light; neither are given preferential treatment under this legislature.  However, there is still much work to done, and with that comes incredible market potential.  Building on the legislature provided which means a lack of bureaucratic red-tape for foreign investitures to deal with, the immersion into the Argentine markets is virtually seamless and therefore easy for FDI to realize a profitable return on that investment.
            Based on all the research of these sectors that we have provided to your firm, we make the following recommendations to you.  Sectors concerning agriculture, real estate, and tourism are considered by our data and historical trends to be those with the best potential for good returns on investment.  These appear to be the most secure and the least likely to be problematic from a fiscal standpoint.  These data trends coupled with Argentina’s recent stellar growth have the makings of an economic money tree as long as they are tapped in a timely and efficient manner.