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Economic Crisis in Argentina - Essay Example

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This essay critically reviews the major roots and causes of the Argentinian economic crisis of 1998 and considers its long-term economic and political impacts. It is argued, that the roots of the crisis lied in political and economic policies of the governments that followed the military regimes…
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Economic Crisis in Argentina
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Download file to see previous pages The government’s policies largely focused on addressing the human rights issues and ensuring independence of judiciary thereby strengthening the democratic process. These policies were very effective in increasing Alfonsin’s popularity. However, when the independent judiciary started to hinder the new government’s objectives, government abandoned the policy of judicial independence by promulgating laws such as ‘Full Stop Law’ and ‘Due Obedience Law’ (Tedesco, 2002, p. 472). These policies greatly decreased the popularity of government and provoked military rebellion, guerilla attacks and labour conflicts thereby weakening the government (Tedesco, 2002, p. 473). Hence, the increased confrontation between the labour class and government resulted in a failure of economic policy. Carlos Menem succeeded Alfonsin as president of the Latin American Republic. Menem tried to bring about a consensus between the labour class and the ruling elite and was somewhat successful. However, he used the power earned from the political consensus to establish a hegemonic rule over the country. He restructured ‘the supreme court of justice’ and inducted his supporters and close aides as judges at the highest level. Similarly, the accountability courts or ‘the Tribunal de Cuentas’ was reformed with government friendly judges. These policies encouraged large-scale corruption by government officials. This resulted in a large scale economic unrest (Tedesco, 2002, p. 476). Different economic factors paved way to the grave economic crisis of Argentina. Alfonsin inherited a country with severe economic issues to be resolved. The government introduced a series of economic reforms including...
This essay is one of the best examples of thorough retrospective analysis of the origin, transmission and cessation of the economic crisis in Argentina, with focus on the economic policies, that led to the overcoming of the crisis.
The shift from dictatorship to ‘real’ democracy did not yield the anticipated results. Carlos Menen, the Argentinean President from 1989 to 1999, introduced reforms that proved catastrophic for the economy. His policy of privatizing the government owned corporations and encouraging foreign investment in banking and other sectors back-fired. Huge amount of funds were transferred overnight out of the country decreasing substantially the country’s foreign reserves. The government froze all the foreign currency accounts. But this move angered the country’s wealthy middle class. They deemed it as a violation of basic human rights and a pro-elitist policy
Different economic factors paved way to the economic crisis of Argentina. The government introduced a series of economic reforms including introducing a new currency. The government has to take huge loans to support this move but could not pay the interest. This decreased the confidence in new currency.
The economic bail-out packages offered by international monetary organizations contributed a little towards containing the situation. It was the people’s spirit and its recognition on the part of government that finally led Argentina out of the crisis. The country needs a political culture which strengthens democratic institutions.
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