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Argentina Project PDF


This was our final paper/project regarding Argentina. Enjoy!


Power Point presentation

Argentina Power Point Presentation

Check out our presentation for class.

Leading up to the Crisis


The Crisis

However, this was the least of Argentina’s problems.   In October 1999, Fernanado de la Rua, the UCR and Frepaso’s Aliance candidate, come out victorious by ten percent of votes over the Peronist candidate, Eduardo Duhalde.  De la Rua was to take immideate action to restore the country from the growing recession; the GDP had fallen by 3.4 percent in relation to the previous year and unemployement was at 14 percent.(Todo Argentina)    The IMF became the governments copilot in the handling of the economy after granting the country a $40 thousand million bailout.  The first step was to cut government spending and setup an attractive platform for foreign investment to return and save Argentina from furthering capital flight and prevent the default of their debt.

After the resignation of two economic ministers, Domingo Cavallo, the minister of economy from the Menem administration, was appointed in March of 2001. (BCC News)  A major problem which held back the country from progress was the pegged exchange rate of one peso to one dollar.  This prevented Argentina from competing with other exporters in various market; their prices were just too high to contend.  Cavallo began with the “competitiveness plans” and the goal of “zero deficit.”(Todo Argentina)  However, due to mass government cuts the unemployement rate continued to increase and reached 18 percent; not to mention that the poverty level was also on a rise

To make matters worse for Argentina, by August 2001, three rating had significantly lowered the countries credit ratings while salaries continued to plumit.  With hopes to recue their savings, thousands of argentines flacked to their banks and retreated $1.3 billion from their accounts,(BCC News) drastically reducing the countries dollar reserves when they needed the most.  The every next day, December first,  Cavallo announced that there would be a $250 a week maximum of dollar withdrawls; this became the infamous “corralito.”  Days later, the IMF said the Argentine measures (the drastic cuts) were not enough, and prevented the disbursement of a $1.3 billion loan to help keep the federal government, bankrupt provinces, and banks with liquidity.

The decade of Menem


Saul Menem

In the elections of 1989, the Peronist candidate, Carlos Saul Menem, took the ballot.  His administration was big on spending which gave the illusion that the economy was improving.  However, Menem promised to fix the economy but asked citizens to be patient.  Foreign debt continued to accumulate and was at $70 billion, with already two billion just from interest.

Drastic measures were taken to reform the argentine market.  Menem administered the privatization of all state run enterprises, including the very same ones Peron had once nationalized. (Wiki)  Due to the closing of the many state run corporations, unemployment went up and as a result they created the unemployment insurance.

During his first year in office, he was able to control the inflation on the Austral from 196 percent to 6 percent in just months, but his efforts rendered hollow when the dollar got stronger, and inflation struck back.  By 1991, they dropped the Austral and returned to the peso, but with the new dollarization policies, they created a law establishing the exchange of one peso for one dollar, they called this the “Convertibility Plan.”

In 1993, Menem sign the “Olivos Pact” with the head of the Radical’s party, Raul Alfonsin.  This move facilitated the reform of the constitution and consequently his reelection in 1995.  However, a new political party emerged in these elections, the “Frente Pais Solidario” (FrePaSo); who took second place in the running.

In his first term, the argentine middle class began to shrink; this became even more inherent during Menem’s second term.  Many were left unemployed and consequently had no access to health insurance and education. (Todo Argentina) In outrage, the people began a new form of protest called “piquetero.”

Corruption was a major player in the Menem administration.  Many scandals both in government management and in his personal life took over the media and Argentina felt ridiculed.

The Reinstatement of Democracy


It was finally the return of democracy and in October of 1983, Argentina elected the Radical Civic Union’s candidate, Raul Alfonsin, who served un-interrupted for a full six-year term.  The new president, as many before him, faced a sour economy with a $50 billion foreign debt that accumulated an interest of $150 million a month, and inflation that hit 1000 percent a year. (Crow 1992 (1946), p. 850)

Alfonsin’s government fought back with the “Plan Austral.”  During this period, they replaced the peso with the Austral.  Prices did not change and government spending seized.  They also stopped printing money and everybody had to buckle down as the standards of living declined.

To make matters worse for Argentina, the US signed a deal with the Soviet Union to sell four million tons of wheat (their main export at the time) under the market value.  There was no way they could compete and this just made it harder for them to pay off their debt.

However, Alfonsin was most notorious for being the must uncorrupt president.  His major contribution was holding the military accountable for their actions during the past years.  Those who were accused of terrorist killings were put on trail, many of which were high-ranking military officers.  Junta Generals admitted to killing 30 thousand people; however, their sentences were too lenient and not just for their actions. (Crow 1992 (1946), p. 851)

His second notorious act was the attempt to move the capital from Buenos Aires to Patagonia.  They thought that the colder weather would be a player in making the government more productive and that those who were in the government out of greed would stay behind.  Unfortunately for Alfonsin, this made him very unpopular and the move never took place.  Inflation returned with furry and prices changed on a daily basis, closing down many business.  Alfonsin recognized his defeat and stepped down five month before the end of his term.

The Return of Peron and Aftermath


With an undeniable 61 percent, a 77 year-old Juan Peron return to his throne, after 18 years of exile.  This time his formula was with his new wife Maria Estela Martinez de Peron (also known as Isabelita of 43 years).  Unfortunately for his followers, he pasted away on July first of 1974, leaving Martinez as head of state, and the first woman president of “the west hemisphere.” (Crow 1992 (1946), p. 849)  However, their government only worsened the economic situation, inflation was ungraspable and terror filled the streets with political kidnappings and murders.

The military inevitable dethroned Martinez in March of 1976 and replaced her with the head of the army at the time, General Rafael Videla.  Argentina entered what the generals called “the process of military re-organization.”(Todo Argentina)  The congress was dismissed and military law returned once more.  The goal was to cleanse the country of terrorism, and the military was in full force.

The new government was able to reduce inflation from 750 percent to 160 percent; but prices within Argentina grew rapidly.  For instance, the price of bread jumped from 60 pesos to 350. (Crow 1992 (1946), p. 849) There was also an anti-Semitic sentiment in the government and as a result many Jewish argentines fled the country.  There was also an overwhelming disappearance of 10,000 people during this period.  Ultimately, inflation returned and the economy sank with it.

General Roberto Eduardo Viola replaced Videla in March of 1981.  However, his government was shot lived, and by December of the same year, Leopoldo Galtieri took over.  During his regime, Argentina would attempt to gain control over the Falkland Island (Las Malvinas).  In April of 1982, they were able to invade and throw out the British occupants.  This restored some sense of argentine pride, but just two months later the British returned in full force and took back Las Malvinas.  Consequently, Galtieri resigned and Reynaldo Bignone took charge of the transitional government until elections.

Part 2: General Ongania and others


General Ongania

            General Ongania took charge under the so-called “Revolution Argentina” which had lead the coup in June of 1966.  The military took on the large task of re-establishing new political and social order by the practice of an “authoritarian-bureaucratic state.” (Wiki)  Ultimately, Ongania dismissed congress and made a puppet out of the Supreme Court.  Nothing was really done to increase productivity, so economic growth remained low.   The police was given the liberty to search and detain people without the need of a warrant.  They did the same to Universities and fired any and all of the professors they believed to be a threat.  Suddenly, Argentine began to settle down from chaos thanks to the strong oppression.

            They allowed the currency to devaluate by 40 percent and were able to resort to the IMF for a “stand by” loan. (Todo Argentina)  Public expenses were also reduced from 40 percent to 14 percent, in hope to decrease the national deficit.  Wages increased by 35 percent.  (Crow 1992 (1946), p. 848)

            The Catholic Church became important once again and everyone who favored the military government enjoyed prosperity, so out of convenience the opposition began to quite down.  Ongania steered the country into a right-winged direction and became very pro-American.

The underground movement grew stronger as political instability began to conquer the streets of Buenos Aires.  Even the church declared its sympathy to the Socialist revolutionary movement. (Wiki)  General Juan Carlos Aramburu was the voice of this junction, along with the archbishop of Buenos Aires.  However, he was kidnapped and brutally murdered by Peronist gorilla movement. . (Todo Argentina) The Peronist wanted to regain the remains of Eva Peron and demonstrated their furry by chopping off all of the General’s limbs.  By June of 1970, Argentina experienced it’s fifth military intervention in 15 years, this time led by the army, navy and air force combined. 

Consequently, they put General Roberto Levingston in power who and restored political activities and decreased the duration of the political term to four years.  He was quickly replaced by General Alejandro Augustin Lanusse who tried to reconcile with the Peronists and as an act of faith returned the body of Eva Peron.  His government also resulted unsuccessful and election finally came into place in 1973.

Hector Campora became the new president of Argentina, but he displeased Peron and his followers so he quickly stepped down and his vice-president, Raul Lastiri, took his place.  He was only in office for three months and by September of the same year, held elections once again.