Travel Reference
In-Depth Information
The Menem Years
Carlos Saúl Menem was elected president in 1989, and quickly embarked on a period of
radical free-market reform. In pegging the peso to the US dollar, he effectively created a
period of false economic stability, one that would create a great deal of upward mobility
among Argentina's middle class. However, his policies are widely blamed for the coun-
try's economic collapse in 2002, when the overvalued peso was considerably devalued.
Menem's presidency was characterized by the privatization of state-owned companies
- and a few scandals. In 2001 he was charged with illegally selling arms to Croatia and
Ecuador and placed under house arrest. After five months of judicial investigation, the
charges were dropped; the following day he announced he would run again for president.
In 2003 he did, only to withdraw after the first round. A failed 2007 bid for governor of
his home province of La Rioja has pretty much written him off politically.
Hectór Olivera's 1983 film
Funny Dirty Little War
is an unsettling but excellent black
comedy set in a fictitious town just before the 1976 military coup.
'La Crisis'
Fernando de la Rua succeeded Menem in the 1999 elections, inheriting an unstable eco-
nomy and US$114 billion in foreign debt. With the Argentine peso pegged to the US dol-
lar, Argentina was unable to compete on the international market and exports slumped. A
further decline in international prices of agricultural products pummeled the Argentine
economy, which depended heavily on farm-product exports.
By 2001 the Argentine economy teetered on the brink of collapse, and the administra-
tion, with Minister of Economy Domingo Cavallo at the wheel, took measures to end de-
ficit spending and slash state spending. After attempted debt swaps and talk of devaluing
the peso, middle-class Argentines began emptying their bank accounts. Cavallo respon-
ded by placing a cap of US$250 per week on withdrawals, but it was the beginning of the
end.
In mid-December unemployment hit 18.3% and unions began a nationwide strike. Th-
ings came to a head on December 20 when middle-class Argentines took to the streets in
protest De la Rua's handling of the economic situation. Rioting spread throughout the
country and President de la Rua resigned. Three interim presidents had resigned by the
time Eduardo Duhalde took office in January 2002, becoming the fifth president in two
weeks. Duhalde devalued the peso and announced that Argentina would default on
US$140 billion in foreign debt, the biggest default in world history.
