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beef producers of Argentina gained access to a market of more than 215
million consumers, although manufacturers now had to compete with
the Brazilian industrial powerhouse. Trade between Mercosur countries
rose fivefold in the 1990s.
This was not the economic program that Argentina had expected
from the populist campaigner. Pundits began to joke that the Menem
had accomplished more de-Peronization in two years than the military
had in 20 years of rule. Labor bosses were split over
menemismo.
Those
critical of the neoliberal policies predicted that workers once again
would suffer for the economic foibles of the politicians. Their pessi-
mism was justified, as the newly privatized industries shed redundant
workers and employers no longer worried about government favoring
labor. Official unemployment rose close to 20 percent; poverty rates also
remained perilously high at 40 percent. Never before had the Argentine
economy sustained such high rates of unemployment. At least inflation
no longer threatened the real wages of those who still had jobs.
Menem's neoliberal reforms appealed to many constituencies, too.
“Governments are simply not good businessmen,” noted one IMF offi-
cial quoted in a
NewYorkTimes
article. “Argentina was losing $5 million
a day just on its railroad system, and by selling [state companies] the
Government was able to get rid of thousands of unproductive workers”
(Nash 1993, 6). The middle class, the elite, and the foreign bankers also
approved, as did the U.S. government. For the first time in history, an
Argentine president went out of his way to support U.S. policies in Latin
America and the world. Menem joined the United States in its denuncia-
tions of the human rights' record of Cuban leader Fidel Castro and voiced
support for the 1989 U.S. invasion of General Manuel Noriega's Panama,
while his Latin American neighbors demurred. Menem also committed
Argentine military assistance to Desert Storm, the U.S. military campaign
against Iraq in 1991. In return, U.S. diplomats throughout Latin America
spoke highly of the Argentine model of economic reforms. President Bill
Clinton arrived in 1997 to pay homage to Menem's reforms.
President Menem parlayed his economic successes into a campaign
for a second term. Congress cooperated in amending the Constitution of
1853 to permit his possible reelection (as Perón had done for the 1952
election), though it reduced the president's term of office from six to four
years. The economy cooperated. The 1990s witnessed the strongest and
most consistent growth rates the nation had enjoyed since the 1940s. In
the 1995 elections, therefore, the electorate returned Menem to the Casa
Rosada with a majority of 55 percent of the votes. In doing so, voters over-
looked some troubling signals that they soon would have to confront.
