Politics of Argentina - Policy

Policy

Each administration had different priorities. President Alfonsín took office on the giving up of power by the last military junta, and his main task was to ensure a peaceful transition. In the end he was overcome by an economic crisis that led to a bout of hyperinflation.

President Menem first had to control inflation and stabilize the economy, which he did by adopting a series of radical measures including fixed parity between the Argentine peso and the U.S. dollar. He then engaged in a program to move Argentina's economy towards a liberal model. This plan included the privatization of the previously state-owned telecommunications company, oil conglomerate (YPF), airline (Aerolíneas Argentinas), railroads and utilities. As a result, large foreign direct investment flowed into Argentina for a short time, improving in some isolated cases the infrastructure and quality of service of those companies. His policies culminated in the highest unemployment rates of Argentine history and the doubling of external debt.

In the social arena, Menem pardoned military officers serving sentences for human rights abuses of the Dirty War. To balance the unpopular decision, he also pardoned some of the insurgents convicted of guerrilla attacks in the 1970s. The public scandal after the assassination of the soldier Omar Carrasco forced Menem to end compulsory military conscription.

Menem's administration was regarded by many as corrupt and frivolous. Many members of his administrations have been indicted for profiteering while in office. Despite the large amount of evidence that Menem had personally profited illegally from his administration, he has never been legally convicted. The executive had a visible influence on the decisions of the judiciary, especially the Supreme Court, and displayed a certain contempt for political minorities. Moreover, it did nothing to reduce political corruption and inefficiency, one of the most important and oldest problems in the Argentine government (Argentina's Corruption Perceptions Index for 1999 was 3 out of 10, ranking 71st in a survey of 99 countries).

Fernando de la Rúa's term was notoriously ineffective on many accounts. Elected with a popular mandate to reinvigorate the economy and crack down on the corruption of the Menem administration, de la Rúa was unable or unwilling to perform these tasks. He continued on the same economic course of Menem, which ultimately led to the 2001 economic crash and de la Rúa's resignation. The FrePaSo ministers of the administration, elected on a wave of hope for social changes, also disappointed with a perceived lack of investment in social schemes.

Eduardo Duhalde's interim term was strongly limited by a highly mobilized society. It was marked by the need to pacify the country and soften the impact of the crisis after the forced devaluation of the local currency, the peso, which had lost three quarters of its value in a matter of months. Duhalde employed a mixture of traditional Peronist politics (in the form of a monetary subsidy for heads of families) and neo-Keynesian economic principles to stabilize the economy and bring peace to the streets.

Néstor Kirchner, who belongs to the moderate center-left wing of Peronism (rooted in the leftist Peronist factions of the 1970s), continued Duhalde's measures (even keeping his Minister of Economy, Roberto Lavagna) and added some heterodox economics. Heavy taxes on exports have served to keep local prices of valuable commodities in check, while collecting huge revenues (especially from oil products and agricultural exports like soybeans). The restrictive monetary policy of the 1990s has become aggressively expansive; the Central Bank has injected large amounts of cash into the economy and bought dollars from the free currency market in order to accumulate reserves. The fiscal policy is also expansive; the government has raised private and public salaries by decree on several occasions, and has encouraged negotiations between the private sector and the labor movements. Inflation has again become a concern. The government has struck price-freezing agreements with certain sectors of the economy (producers of milk, some foods, natural gas, etc.) and put heavy pressure on others. Failure to comply on the part of Argentine beef producers has been met with a punitive suspension of exports, starting March 2006, intended to increase domestic supply (this was then softened to a quota system).