Travel Reference
In-Depth Information
The largest public demonstration during Menem's two terms in office
came in 1997. A reported 40,000 unemployed workers from all over
the country marched on the Plaza de Mayo. In the meantime, wealthy
Argentines were buying up real estate in the beach resort of Punta
del Este, Uruguay. “Up to now, we haven't seen that the privatizations
have brought anything good to the country,” said one labor leader in
Córdoba. “We only see unemployment, poverty, and that the country
is left without any recourse while the external debt grows and grows”
(Brown 1997, 382).
Toward the Abyss
The public grew tired of Menem's ostentation and flamboyance (he
also had a reputation as a womanizer, though it did not always hurt
his popularity). Following his reelection, Menem had increased pub-
lic expenditures, government employment, and deficit spending, and
Argentina's international debt had precipitously risen as a result. So,
in the 1998 elections, the electorate ignored the Peronist candidate,
who did not enjoy Menem's enthusiastic support, and elected the dour
Radical candidate, Fernando de la Rúa. This marked only the second
time the Peronists had lost a presidential election. It was clear, however,
that the Radical president intended to carry on with the neoliberal
economic agenda. De la Rúa appointed Domingo Cavallo once again as
minister of the economy.
This time, Cavallo had to deal with the deteriorating economic situ-
ation caused in part by his own “convertibility plan” of the previous
administration. The rigid linkage between the peso and the dollar had
already made Argentine prices high for the rest of the world. As the dol-
lar gained value worldwide against other national currencies, the peso
also strengthened and began to deflate. Tourists to Argentina discovered
that hotels and meals were expensive. Argentine agricultural exports
became very costly on international markets, but imports of foreign
goods became more affordable. As a result, exports declined as imports
grew, to the detriment of local industries. Trade deficits mounted. Trade
with its Mercosur partners developed in such a way that Brazilian
industrial exports benefited while Argentine industry lost ground. The
economy began to contract beginning in 1999.
President de la Rúa and Minister Cavallo also confronted an inter-
national debt that reached upward of $141 billion in 2001. They had
to dedicate more and more government revenues to pay the interest on
foreign loans, while failing to issue paychecks to government employ-
