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The Reinstatement of Democracy

by on December 9, 2011

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.

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