On December 20, 2001, the four-year recession in Argentina culminated with the resignation of President de la Rúa, following political demonstrations, police violence, and the deaths of 29 people. De la Rúa’s resignation not only pointed to Argentina’s dire economic situation, but presaged the country’s political collapse as well, with four persons holding the presidency in under two weeks. The second president, Adolfo Rodríguez Saá, declared the country in default on its $150 billion external debt, making Argentina largest defaulter in history.
By Christmas 2001, 15 million people or 40 percent of the population had fallen below the poverty line. Mass social and political mobilizations erupted, with Argentines voicing their anger in numerous cacerolazos, or street demonstrations, which had been unseen since the mid 1980s. On the evening of January 10,2002 alone, these demonstrations occurred in 50 locations throughout Buenos Aires. The cacerolazos reflect the interests of many groups, not only the middle class; some of the graffiti found after the cacerolazos in December 2001 were signed, “The People.”
During the 1990s, many described Argentina as the “poster child” or “favorite student” of the international financial institutions. The country followed a set of macroeconomic policies including trade liberalization, deregulation, privatization of public services, and strict monetary policy. Sustained economic growth through the first half of the 1990s appeared to some, including the official institutions, to confirm the wisdom of those policies. Others, however, warned of increasing indebtedness, rising unemployment, and growing inequality and poverty. Academic analysts noted that the so-called benefits of external liberalization and privatization had not materialized. While these effects are deeply troubling within Argentina, they are also of great significance in Latin America and the developing world more generally. If Argentina had followed the “best advice” of the global institutions, what had gone wrong?
The new government of Argentina, led by President Eduardo Duhalde, has redirected macroeconomic policy, breaking sharply with the post and questioning the validity of the International Monetary Fund’s policy recommendations. The Argentine experience has also provided now insights about the real options available to countries in economic and political crises in an age of globalization. Meanwhile, popular rejection in Argentina of politicians from all parties reflects the perception that the country’s collapsing economy is not just the result of misguided policies from the external world, but rather the possibility of Argentine politicians and national institutions as well. The events in Argentina mark a watershed in the current global debate about the role of both policies and economic management of developing countries.
In order to understand this difficult period and its implications beyond Argentina and the present, this volume brings together a selection of the papers from an international conference, “Economic Management and Political Collapse in Argentina: Interpreting the Past to Build for the Future,” organized by The New School’s Graduate Program in International Affairs with the support of the Ford Foundation, and held in New York City on April 8 and 9, 2002.
This book examines Argentina’s recent economic and political collapse from perspectives that are both interdisciplinary and transcontinental. Its contributors bring the diversity of their views as historians, economists, sociologists, journalists, and architects from Argentina, the United States, Chile, Mexico, and Brazil. The dramatic events that have unfolded in Argentina over the past year are analyzed from the historical perspective of the last century, with a special focus on the 1990s, aiming to identify lessons for the future and contribute to the search for sustainable development. The Argentine case is important for Latin American countries and the whole world. Nobel Laureate Joseph Stiglitz highlights its importance in Part V, where he denounces the convergence between national mismanagement of economic policies, in the face of the pressures of the global economy, and the erroneous advice of international institutions.
Opening the book, eminent Argentine historian Tulio Halperín Donghi considers why Argentina adopted its particular model. In Part II, Argentine economists Robert Frenkel and Nicolás Dujovne, and economist from MERCOSUR, José Marcio Camargo from Brazil and Andrés Solimano from Chile, evaluate Argentina’s decade of convertibility in the 1990s. Part III builds on the economists´understanding of the crisis with a diversity of other perspectives: Néstor García Canclini explores the new spaces of expression opened within culture; Adriana Clemente looks at the social dimensions of the crisis and its impact on poverty; Ernesto Semán identifies issues key to understanding the political crisis; and Berardo Dujovne analyzes the urban impact of the crisis. In Part IV Joseph Tulchin reflects on the close linkage between convertibility and Argentina’s relationship with the United States. In Part V, Nobel Laureate Joseph Stiglitz cites the lessons Argentina offers for Latin American development. Looking ahead, in Part VI, Michael Cohen suggests issues to be included in a development agenda and Margarita Gutman uses concepts of ideology and utopia to examine the choices made in the 1990s and alternatives for the future. The book includes an epilogue by Jeffrey Madrick on the origins of neoliberalism and its impact in Argentina.
The papers included in this volume and the presentations made at the conference triggered intense debate among the New York audience, which included many Argentines and Latin Americans. Many of them agreed on convertibility’s negative impact on the economy, as an ideology adopted by successive governments to justify a statu quo that in fact benefited few and excluded many. Further, the doctrinaire faith in this ideology – that the peso remain pegged to the dollar lest catastrophe and hyperinflation befall the economy – impeded exploration of economic alternatives. Conference participants considered the degree to which this ideology blinded governments, officials, and the media, precluding wider public discussions on alternatives for Argentina’s future. They also deliberated on the question of responsibility at the national and international levels. Closing the two-day conference, Professor Stiglitz’s comments reinforced these connclusions, pointing to the IMF’s unsound economic advice, based on neither evidence nor experience, and Argentina’ s culpability in taking up this advice. He thus echoed the findings that emerged over the course of the conference, of the responsibility of both national and international actors for the events culminating in the December 2001 collapse.