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The decade of Menem

by on December 10, 2011

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.

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