Argentina Crisis

“The world economy is the most efficient expression of organized crime. The international bodies that control currency, trade, and credit practice international terrorism against poor countries, and against the poor of all countries, with a cold-blooded professionalism that would make the best of the bomb throwers blush.” – Eduardo Galeano.
Argentina being one of the most developed countries inthe Latin American region, a country that once enjoyed a good stability, a country that fed Europe during World War II was to enter into an era of mistakes and robbery from part its own political elite and for having had bad transactions with international institution, such as the International Monetary Fund. The Argentine crisis negatively affected the country during the late 1990’s and early2000’s. This crisis had huge negative effects on the economic, political, and social life of the country.
To understand the Argentine collapse of 2001 one must go back to World War II, a conflict in which Argentina stayed neutral. By then the foreign debt of the country was 1.9 billion dollars. After the help Argentina provided Europe during the war, it had no debt (Appendix 1). While having JuanDomingo Perón as president, elected in 1946, the country never entered on dealings with the IMF because the president thought it was a useless institution. The International Monetary Fund is an institution that was initially created to promote employment, the increase in production, and prosperity in all countries of the world. In 1955 the “libertarian revolution” dictatorship took over power andwithin a year they had already become IMF borrowers. The country started a period of austerity, because the institution imposed them and to permit itself pay the money back. For a long time they had dictatorships only cut by short periods of democracy. While having political instability the foreign debt kept on increasing. Seven years later, Perón returned to the country and started a third mandate,but he died just a few months later.
On March 24, 1976 a coup, supported by the IMF, took power again. The IMF reinforced the de facto government and gave economic support to it just some hours after the coup, something they refused to do with Isabel Perón as the president. During those years the junta started to borrow money compulsively. The IMF did not alert them of dangers of borrowing somuch money in short periods of time (not following their own rules) and so the debt incredibly increased. By the 1970’s the foreign debt of the country had doubled. Throughout this time the Argentinian establishment got dollars inside the country and once they made any gain they deposited them in banks abroad. When Ronald Reagan took the presidency of the United States, the interest rates of theloans went up, and this made the Argentine debt even higher. After, during the Falkland Islands war, Roberto Alemann, the then minister of economy, turned the private institutions (that once were state-owned) debt into the country’s debt. The IMF strategy was working in Argentina, the countries would run into debt with amounts they would not be able to pay; then the country would of course be unableto pay it; so they borrow money and they would only get it if they follow their austerity policies.
After six years of dictatorship, in 1982 the country’s foreign debt went from seven billion dollars to forty five billion dollars, and the government declared a default. In 1983 the minister of economy, Bernardo Grinspun, found himself with only ten million dollars saved in a bank in New York, anamount of money that would only endure for two days of country running. For the year 1988, Argentina could not pay any of its debt and the IMF refused to give any more loans. The country’s inflation per month increased to 189% during July of 1988.
The Argentine economic collapse of 2001 had a huge economic impact in the South American country. During more than a decade the country’s economy had...