Travel Reference
In-Depth Information
18
Europe and the U nited States sided with
Great Britain.
The war was a diplomatic nightmare for
the U nited S tates, whose M onroe D oc-
trine—penned nearly 180 y ears befor e—
technically r equired it to declar e war on
Great Britain. However, the war meant the
end of the militar y regime and the solidi-
fication of power for Great Britain's Prime
Minister Margaret Thatcher. Virtually for-
gotten in the gr eater world, it 's almost a
joke among English-speaking nations that
Argentina would challenge one of the
world's greatest naval powers. But the war
is a serious issue for Argentines, who still
lay claim to the Falklands.
Galtieri's defeat br
and eroding the social support systems put
in place o ver the decades. This destroyed
investor confidence, and the national defi-
cit began to soar . M énem was seen as a
corrupt pur veyor of cheap glamour . H is
wife, Cecilia, the former M iss Chile and
Miss U niverse, was hated b y many and
regarded as a tr ophy wife. R umor has it
that members of his go vernment had a
hand in the bombings of the I sraeli
Embassy and the AIMI J ewish Commu-
nity Center bombings. S ome of the accu-
sations bear a racial tinge, giv en that he
was Argentina 's first pr esident of Arabic
descent.
After 10 y ears as pr esident—and a con-
stitutional amendment that allowed him to
seek a second term—Ménem left office. By
that time, an alternativ e to the traditional
Peronist and Radical parties, the center-left
FREPASO political alliance, had emerged
on the scene. The Radicals and FREP ASO
formed an alliance for the O ctober 1999
election, and the alliance 's candidate, r un-
ning on an anti-corr uption campaign,
defeated his Peronist competitor.
Less charismatic than his pr edecessor,
President Fernando de la R úa was for ced
to reckon with the r ecession the economy
had suffer ed since 1998. I n an effor t to
eliminate Argentina 's ballooning deficit,
de la R úa follo wed a strict r egimen of
government spending cuts and tax
ought about his
greatest fear: the collapse of his go vern-
ment. An election in 1983 restored consti-
tutional r ule and br ought Raúl Alfonsín,
of the Radical Civic U nion, to po wer. In
1989, political po wer shifted fr om the
Radical Party to the Peronist Party (estab-
lished by Juan Perón), the first democratic
transition in 60 years. Carlos Saúl Ménem,
a former governor from the province of La
Rioja, won the pr esidency by a surprising
margin.
A str ong leader , M énem pursued an
ambitious but contr oversial agenda with
the priv atization of state-r un institutions
as its centerpiece. With the peso pegged to
the dollar , Argentina enjo yed unpr ece-
dented price stability, allowing Ménem to
deregulate and liberalize the economy. For
many Argentines, it meant a kind of pr os-
perity they had not seen in y ears. The
policies had a dark side, however. The new
money controls devastated local manufac-
turing, and the countr y's entir e expor t
market virtually dried out. World financial
crises in the late 1990s, including those in
Mexico, East Asia, R ussia, and B razil,
increased the cost of external borr owing
and further reduced the competitiv e edge
of Argentine expor ts and industries. The
chasm betw een rich and poor widened,
squeezing out much of the middle class
2
increases r ecommended b y the I nterna-
tional M onetary F und. H owever, the tax
increase crippled economic gr owth, and
political infighting pr evented de la R úa
from implementing other needed r eforms
designed to stimulate the economy . With
a heavy drop in production and a steep rise
in unemployment, an economic crisis was
looming.
The economic meltdown arrived with a
run on the peso in December 2001, when
investors mo ved en masse to withdraw
their money fr om Argentine banks. G ov-
ernment efforts to restrict the run by lim-
iting depositor withdrawals fueled anger
