The year 2001 and 2002, saw Argentina make headlines all over the world. The high rate of deteriorating economy saw the downfall of president's Fernando de la Rua's government. This led to the whole of the cabinet to resign and then the president later resigned handing over power six months prior to his term. There was also political unrest in the country, as people from the poor suburbs matched in the streets as they looted supermarkets. This unrest led to the death of thirty people. There was also handover of power to three different interim presidents in Argentina. That was until there was a special session at the congress in 2002, which chose peronist senator Eduardo dulhade to be president for two years. This essay will discuss the causes and outcomes of the political and economic crisis in Argentina (Schamis, Hector E. Pgs. 81-82).
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Causes and outcomes of the recent political and economic crisis in Argentina during 1999-2002
The political crisis in Argentina rose due to the economic difficulties that the country was facing. This led to the resignation of the economy minister Domingo cavallo and the all the cabinet ministers, and then at last the president resigned. The country's political future was at stake. The country saw the handover of power to three different interim presidents. The congress had to call an emergency on January 1st 2002, where they chose peronist senator Eduardo Duhalde to lead the country for two years. Fall of the economy was the main cause of political unrest in Argentina, as it saw the collapse of the De la Rua administration. This was due to years of economic recession and 20 percent unemployment.
The luck of support of the justicialist party or the pj to De La Rua also caused political unrest in Argentina. The president had called the pj leaders to help him form a government of national unity that the people would like, but the peronists leaders turned the president down and refused to form a government with him. One of the pj leaders said that when De la Rua made his offer they checked into the matter keenly with their congressional leaders, only to discover that the presidents own party was not supporting him. And they were no longer willing to support the president in any election that was to come any time soon. This led to the resignation of De la Rua. This led to a lot of political unrest in the country due to the succession politics.
The introduction of the currency board, also led to economic crisis abit later when economy minister Domingo cavallo introduced to congress a new process of stabilization under a law called the convertibility law. The process introduced the peso to dollar system or one to one. This saw the monetary and exchange rate policy being based on one currency policy. The strategy by the economy minister soon paid off, with the inflation dropping and also the economy was stable and began to rise by 1992.But Cavallo strategy was not a bed of roses, because of the problems that would face it making the country suffer a major economic blow. One of the problem was that the convertibility law, stated that monetary base be backed by international reserves.The decision by Mexico to devalue the peso in 1994 saw Argentina experience its first financial blow since the introduction of the currency board. The banking sector became fragile and there were a lot of delays in it. By the end of the century Argentina was in a deep recession crisis, with the fiscal base becoming very weak she had been exposed to some serious debt (Schamis, Hector E. Pg.86-89).
I am optimistic about the strength of the Argentine democracy in spite of this political and economic crisis. This is because Argentina's democracy became consolidated because the military is weak now than it was before and the political parties have now become very strong. But most important is the way this crisis was taken into consideration, unlike earlier times incase of such a crisis members of the congress would already be on there way heading home. They would either be planning to exile the country, or they would be seeking military assistance for a coup. This time was different as legislators met at the congress to discuss on ways to fill the gap left by De La Rua. Never before had this been seen in Argentina and it might have made a difference.
At the beginning of the century Argentina was making news headlines worldwide, and this was due to the political and economic crisis that had affected the country. The political steams in the country rose due to the fall of the economy. This led to the resignation of the economy minister Domingo cavallo, and after that all the cabinet ministers followed then president De La Rua resigned at last. This led to high political unrest in the country that led to the appointment of three interim presidents. Introduction of the currency board, also later led to economic crisis. Especially when Mexico devalued the Peso in 1994, saw Argentina experience its first financial blow since the introduction of the currency board. The banking sector became fragile and there were a lot of delays in it. Argentina's democracy has also grown; the congress did not turn to the military for help but solved the problems through the conventions.