DOCSLIB.ORG

Argentina and the International Monetary Fund Through Economic Crisis and Recovery

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Argentina and the International Monetary Fund Through Economic Crisis and Recovery FROM PARTNERSHIP TO COLLAPSE: ARGENTINA AND THE INTERNATIONAL MONETARY FUND THROUGH ECONOMIC CRISIS AND RECOVERY By MARY ELAINE MITCHELL WATERS A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS UNIVERSITY OF FLORIDA 2007 1 © 2007 Mary Elaine Mitchell Waters 2 To my husband and family, whose encouragement and support throughout the years has made all my endeavors possible 3 ACKNOWLEDGMENTS I thank the members of my thesis committee for their time, advice and guidance during the thesis process. I am particularly grateful to my supervisory committee chair, Dr. Terry McCoy for his enthusiastic support of the topic and for his constructive criticism. Dr. Ana Margheritis provided me with invaluable insight into the realities of Argentine political economy, for which I am extremely grateful. I thank Dr. Andy Naranjo for being so generous with his time and assistance. My graduate studies at the University of Florida have been challenging and rewarding. I thank my professors, who challenged me to think critically about the issues facing Latin America in the 21st century. I also wish to thank my fellow students in the Latin American Studies department for raising the level of debate about important Latin American issues. My academic and personal accomplishments could not have been possible without the love and support of my family. I owe a debt of gratitude to my parents, who have fostered my interest in Latin America and encouraged me to pursue my passions and my goals. Finally, I thank my husband for his unconditional love and encouragement over the years, especially during the thesis process. I could not have done this without him. 4 TABLE OF CONTENTS page ACKNOWLEDGMENTS ...............................................................................................................4 LIST OF TABLES...........................................................................................................................7 LIST OF FIGURES .........................................................................................................................8 ABSTRACT.....................................................................................................................................9 CHAPTER 1 INTRODUCTION ..................................................................................................................11 Problem Statement – Research Question................................................................................13 Literature Review ...................................................................................................................14 Approach ................................................................................................................................20 Significance and Organization................................................................................................21 2 ARGENTINA AND THE INTERNATIONAL MONETARY FUND, 1978-1998 ..............24 Introduction.............................................................................................................................24 The Evolving Role of the IMF in the Global Economy .........................................................26 Argentine Economic Policy and the Debt Crisis ....................................................................29 The Military Regime .......................................................................................................30 The Alfonsín Administration...........................................................................................34 Comments on Argentine Economic Policy Prior to 1991 ...............................................42 The Convertibility Plan...........................................................................................................43 Conclusions.............................................................................................................................48 3 ANATOMY OF THE CRISIS................................................................................................50 Recession and Contagion........................................................................................................51 Fiscal Deterioration ................................................................................................................55 The Inevitability of Collapse ..................................................................................................66 4 FACTORS CONTRIBUTING TO THE CRISIS...................................................................70 Convertibility..........................................................................................................................71 Fiscal Policy............................................................................................................................73 Debt Sustainability..................................................................................................................75 The Role of the IMF ...............................................................................................................76 Conclusions.............................................................................................................................80 5 5 ARGENTINA’S RECOVERY AND BREAK WITH THE IMF ..........................................82 Restoring Confidence in the Economy...................................................................................83 Debt Restructuring..................................................................................................................88 Summit of the Americas .........................................................................................................94 6 CONCLUSION.......................................................................................................................96 Findings ..................................................................................................................................98 Significance ............................................................................................................................99 Limitations and Future Research..........................................................................................102 APPENDIX A SELECTED ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND............................................................................................................103 B GENERAL TERMS OF IMF FINANCIAL ASSISTANCE ...............................................111 C TIMELINE OF SELECTED EVENTS................................................................................112 D ARGENTINA’S LENDING ARRANGEMENTS WITH THE INTERNATIONAL MONETARY FUND............................................................................................................114 LIST OF REFERENCES.............................................................................................................115 BIOGRAPHICAL SKETCH .......................................................................................................125 6 LIST OF TABLES Table page 3-1 Key Economic Indicators 1997-2001.....................................................................................57 3-2 Sovereign Debt Ratings 1999-2004........................................................................................66 5-1 Key Economic Indicators 2002-2006.....................................................................................83 6-1 Key Economic Indicators 2007-2012.....................................................................................96 C-1 Timeline of Selected Events 1998-2005..............................................................................112 7 LIST OF FIGURES Figure page 2-1 Fiscal Deficit and External Debt 1975-1982 ..........................................................................31 2-2 Annual Inflation 1980-1992 ...................................................................................................36 2-3 Monthly Inflation 1985-1989 .................................................................................................39 3-1 GDP Growth 1997-2002.........................................................................................................54 3-2 Gross External Debt as a Percentage of GDP 1996-2002 ......................................................59 3-3 Bank Deposits January 3, 2000-December 31, 2001..............................................................67 3-4 Exchange Rate 1995-2006......................................................................................................68 4-1 Fiscal Deficit 1997-2001 ........................................................................................................74 B-1 IMF Funding Facilities and Policies....................................................................................111 D-1 History of Argentina’s IMF Lending Arrangements 1984-2003.........................................114 8 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts FROM PARTNERSHIP TO COLLAPSE: ARGENTINA AND THE INTERNATIONAL MONETARY FUND THROUGH ECONOMIC CRISIS AND RECOVERY By Mary Elaine Mitchell Waters December 2007 Chair: Terry L. McCoy Major: Latin American Studies In 1991, Argentina embarked on an aggressive program of neo-liberal reform
Load more

Recommended publications
  • Chapter 2: What Went Wrong in Argentina
    2 What Went Wrong in Argentina Several factors contributed to the remarkable deterioration of Argentina from an apparent paragon of economic reform and stabilization in 1997–98 to the tragedy now unfolding in that economy. If Argentina had a more flexible economic system, especially in its labor markets, its econ- omy would have been more able to adapt to the rigors of the Con- vertibility Plan; unemployment would have been lower; growth would have been stronger; fiscal deficits would have been smaller; and interest rates would have been lower because creditors would have had more confidence in the capacity of the Argentine government to service its obligations. Moreover, if the US dollar had not been so strong in recent years, Argentina would have had a more competitive exchange rate vis-à-vis its important European trading partners, contributing both to somewhat better growth and a better balance of payments. If Argentina had not suf- fered the external shock from the collapse of Brazil’s crawling-peg ex- change rate policy, one of the important causes of Argentina’s recession during the period 1999–2001 would have been removed; and this would have had favorable consequences in several important dimensions. Or if Argentina had decided in 1997 or 1998 that the Convertibility Plan had fulfilled its purpose and the time had come to shift to a more flexible regime for exchange rate and monetary policy, it might have been better able to manage the difficulties of 1999–2001. In sum, if things had broken more in Argentina’s favor, this surely would have helped to preserve the success and avoid the tragedy of Argentina’s stabilization efforts.
    [Show full text]
  • St Antony's/Macmillan Series
    ST ANTONY'S/MACMILLAN SERIES General editors: Archie Brown (1978-85) and Rosemary Thorp (1985- ), both Fellows of St Antony's College, Oxford Roy Allison FINLAND'S RELATIONS WITH THE SOVIET UNION, 1944-84 Said Amir Arjomand (editor) FROM NATIONALISM TO REVOLUTIONARY ISLAM Anders Åslund PRIVATE ENTERPRISE IN EASTERN EUROPE Orner Bartov THE EASTERN FRONT, 1941-45, GERMAN TROOPS AND THE BARBARISATION OF WARFARE Gail Lee Bernstein and Haruhiro Fukui (editors) JAPAN AND THE WORLD Archie Brown (editor) POLITICAL CULTURE AND COMMUNIST STUDIES Archie Brown (editor) POLITICAL LEADERSHIP AND THE SOVIET UNION Archie Brown and Michael Kaser (editors) SOVIET POLICY FOR THE 1980s S. B. Burman CHIEFDOM POLITICS AND ALIEN LAW Helen Callaway GENDER, CULTURE AND EMPIRE Renfrew Christie ELECTRICITY, INDUSTRY AND CLASS IN SOUTH AFRICA Robert O. Collins and FrancisM. Deng (editors) THE BRITISH IN THE SUDAN, 1898-1956 Roger Couter (editor) STUDIES IN THE HISTORY OF ALTERNATIVE MEDICINE Maria D'Alva G. Kinzo LEGAL OPPOSITION POLITICS UNDER AUTHORITARIAN RULE IN BRAZIL Wilhelm Deist THE WEHRMACHT AND GERMAN REARMAMENT Robert Desjardins THE SOVIET UNION THROUGH FRENCH EYES, 1945-85 Guido di Tella ARGENTINA UNDER PERÓN, 1973-76 Guido di Tella and Rudiger Dornbusch (editors) THE POLITICAL ECONOMY OF ARGENTINA, 1946-83 Guido di Tella and D. C. M. Platt (editors) THE POLITICAL ECONOMY OF ARGENTINA, 1880-1946 Simon Duke US DEFENCE BASES IN THE UNITED KINGDOM Julius A. Elias PLATO'S DEFENCE OF POETRY Ricardo Ffrench-Davis and Ernesto Tironi (editors) LATIN AMERICA AND THE NEW INTERNATIONAL ECONOMIC ORDER David Footman ANTONIN BESSE OF ADEN Bohdan Harasymiw POLITICAL ELITE RECRUITMENT IN THE SOVIET UNION Neil Harding (editor) THE STATE IN SOCIALIST SOCIETY Richard Holt SPORT AND SOCIETY IN MODERN FRANCE Albert Hourani EUROPE AND THE MIDDLE EAST Albert Hourani THE EMERGENCE OF THE MODERN MIDDLE EAST J.
    [Show full text]
  • Introduction: the Great Unraveling: Argentina 1973-1991
    Introduction: The Great Unraveling: Argentina 1973-1991 In spite of its enormous advance which the Republic has made within the last ten years, the most cautious critic would not hesitate to aver that Argentina has but just entered upon the threshold of her greatness. Percy F. Martin, Through Five Republics of South America, 19051 The truth is that Argentina is bankrupt – economically, politically and socially. Its institutions are dysfunctional, its government disreputable, its social cohesion unstuck. Ricardo Caballero and Rudiger Dornbusch, Financial Times, March 8 20022 By the end of the nineteenth century, Argentina’s economic future looked indeed bright. On the eve of World War I, the Argentine capital Buenos Aires proudly displayed its affluence and modernity in its big administrative buildings, extensive parks and an underground railway. European fashion and consumer goods were in high demand and Buenos Aires even attracted a sizeable intellectual and scientific community.3 By all measures of the time, Argentina could be regarded a modern country. Yet, at the beginning of the twenty-first century, Argentina is seen as the “sick man of Latin America”.4 The economic and political crisis, which Argentina experienced in 2001 and 2002, was arguably the worst since the country’s independence. Over the course of two years, output fell by more than 15 percent, the Argentine peso lost three-quarters of its value, and registered unemployment exceeded 25 percent while more than half of the population of the erstwhile rich country lived below the poverty line.5 1 Percy F. Martin, Through five republics (of South America) : a critical description of Argentina, Brazil, Chile, Uruguay and Venezuela in 1905 (New York, 1906).
    [Show full text]
  • Argentina: the Anatomy of a Crisis
    ZentrumfürEuropäischeIntegrationsforschung CenterforEuropeanIntegrationStudies RheinischeFriedrich-Wilhelms-UniversitätBonn JiriJonas ARGENTINA:THE ANATOMYOFACRISIS ISSN1436-6053 ZentrumfürEuropäischeIntegrationsforschung CenterforEuropeanIntegrationStudies RheinischeFriedrich-Wilhelms-UniversitätBonn Walter-Flex-Straße3 Tel.: +49-228-73-9218 D-53113Bonn Fax: +49-228-73-1809 B12 Germany http: //www.zei.de 2002 Argentina: the Anatomy of a Crisis Jiri Jonas 1 1. Introduction Argentina has a long history of political instability, financial crises and decline in relative economic level. At the beginning of the 20th century, Argentina's economic level, measured by GDP per capita, was not far behind Europe, Australia or Canada. However, after a long period of economic mismanagement, Argentina’s relative position in the world economy has fallen significantly. The beginning of the last decade of the 20th century brought a hope that Argentina has finally turned the corner, and that a period of economic prosperity lies ahead. Successful stabilization program based on the currency board arrangement (CBA) brought inflation quickly down, economic growth recovered sharply, and Argentina became a favorite destination for foreign capital. Yet problems lurked ahead. First came the Mexican crisis of late 1994. Argentina was hit hard by this so-called “tequila” crisis, but with the help of the central bank, its relatively strong banking sector survived the withdrawal of deposits and after one year of sharp decline, the economy grew again in 1996. But another shock followed in 1997, when a violent financial crisis erupted in Asia, followed in 1998 by the Russian crisis and in 1999 by crisis in Brazil, which floated its currency. Argentina has already suffered from turmoil caused by Asian and Russian crises and devaluation of the Brazilian currency added to its problems.
    [Show full text]
  • International Borrowing and Macroeconomic Performance in Argentina
    This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Capital Controls and Capital Flows in Emerging Economies: Policies, Practices and Consequences Volume Author/Editor: Sebastian Edwards, editor Volume Publisher: University of Chicago Press Volume ISBN: 0-226-18497-8 Volume URL: http://www.nber.org/books/edwa06-1 Conference Date: December 16-18, 2004 Publication Date: May 2007 Title: International Borrowing and Macroeconomic Performance in Argentina Author: Kathryn M. E. Dominguez, Linda L. Tesar URL: http://www.nber.org/chapters/c0156 7 International Borrowing and Macroeconomic Performance in Argentina Kathryn M. E. Dominguez and Linda L. Tesar 7.1 Introduction In the early 1990s Argentina was the darling of international capital markets and viewed by many as a model of reform for emerging markets. Early in his presidency, Carlos Menem embarked on a bold set of economic policies, including the adoption of a currency board that pegged the Ar- gentine peso to the dollar, a sweeping privatization program for state- owned enterprises, an overhaul of the banking system, and privatization of the public pension system. The business press marveled over the rapid turnaround in the Argentine economy. Although there were some concerns about the appropriateness and sustainability of the dollar anchor and whether the fiscal reforms were more rhetoric than reality, the policies ap- peared to have conquered inflation and set the country on a course of steady economic growth. By the end of the 1990s, however, Argentina’s situation had dramatically changed. The country had weathered the financial crises in Mexico and Asia, and, despite the volatility of capital flows, Argentina’s currency board remained intact and forecasts of future growth were relatively posi- tive.
    [Show full text]
  • Number 115 ARGENTINA at the CROSSROADS
    Number 115 ARGENTINA AT THE CROSSROADS: PATHWAYS AND OBSTACLES TO DEMOCRATIZATION IN THE PRESENT POLITICAL CONJUNCTURE Marcelo Cavarozzi CEDES, Buenos Aires Author's note: An earlier version of this paper was presented at the March 1982 national meeting of the Latin American Studies Association held in Washington, D.C. 1982 This essay is one of a series of Working Papers of the Latin American Program of the Woodrow Wilson International Center for Scholars. Dr. Michael Grow oversees preparation of Working Paper distribution. The series includes papers by Fellows, Guest Scholars, and interns within the Program and by members of the Program staff and of its Academic Council, as well as work presented at, or resulting from, seminars, workshops, colloquia, and conferences held under the Program's auspices. The series aims to extend the Program's discussions to a wider community throughout the Americas, and to help authors obtain timely criticism of work in progress. Support to make distribution possible has been provided by the Inter-American Development Bank. Single copies of Working Papers may be obtained without charge by writing to: Latin American Program, Working Papers The Wilson Center Smithsonian Institution Building Washington, D. C. 20560 The Woodrow Wilson International Center for Scholars was created .by Congress in 1968 as a "living institution expressing the ideals and concerns of Woodrow Wilson • • • symbolizing and strengthening the fruitful relation between the world of learning and the world of public affairs." The Center's Latin American Program, established in 1977, has two major aims: to support advanced research on Latin America, the Caribbean, and inter-American affairs by social scientists and humanists, and to help assur1? that fresh insights on the region are not limited to discussion within the scholarly community but come to the attention of interestecl persons with a variety of professional perspectives: in governments, interr.ational organi­ zations, the media, business, and the professions.
    [Show full text]
  • Costs and Benefits of Dollarization
    Costs and Benefits of Dollarization Myriam Quispe-Agnoli Latin America Research Group Research Department Federal Reserve Bank of Atlanta [email protected] Paper prepared for the conference “Dollarization and Latin America: Quick Cure or Bad Medicine?” by Latin American and Caribbean Center, Summit of the Americas Center, Florida International University in March 4, 2002. July 2002 Costs and Benefits of Dollarization Myriam Quispe-Agnoli∗ 1. Introduction In the last few years, the idea of dollarization has surged to the forefront of monetary policy alternatives for Latin American countries. Several countries have already officially adopted the US dollar as legal tender. Panama adopted the dollar as its official currency in 1904, Ecuador dollarized in September 2000 and El Salvador followed suit in January 2001. By eliminating their national currencies and replacing them with the US dollar, countries considering dollarization hope to achieve economic stability and growth. Is dollarization a quick remedy for economic stability in Latin America? The answer is yes and no. Dollarization may promote economic stability in the short term, but structural and institutional problems must also be addressed if a dollarizing country is to achieve long-term economic growth and development. In addition to full dollarization, many Latin American countries have experienced a high degree of partial dollarization since the 1970s. Under partial, or unofficial, dollarization, individuals substitute domestic currency with foreign currency to make transactions and protect the purchasing power of their money income. However, the speed of the unofficial dollarization process will depend on the development of the financial system and the institutional regulations allowing domestic holding and circulation of foreign currency (Savastano 1996).
    [Show full text]
  • E.0/W 1 TAGS: Otrar OUIPT AR SUBJECT: Travel of Assistant Secretary Enders —Overview Ctf
    ~iol o b mr/f 0 L" +Jts /hyt INOICATE ~ COLLECT ~ CHARGE TO Fttom CL Amembassy BUENOS AI S 12065 E.O. A~ GDS 3/3/88 (Ruser, C.W, ) OR-M E.0/W 1 TAGS: OTRAr OUIPT AR SUBJECT: Travel of Assistant Secretary Enders —Overview ctf. Aroassyina ACTION: Secstate WASHDC IMMEDIATE .lr DEPT. OF STATE, A/RPS/IPS targaret P. Grafeld, Director INFO: Amembassy CARACAS PRIORITY +Release ( )Excise ( )DenY remotion(s)I ' BUENOS AIRES lclasslfy: ( ) In Part (p In Full 1225 'Tssify as ( ) Extend as ( ) Downgrade to CARACAS FOR, ASSISTANT SECRETARY ENDERS on 1. - entire text AMB DCM 2 ~ summary: The two major topics POL-2 Argentine offichls will ECON wish to discuss are the situation in America USIS Central and DAO Bolivia, which they see as threatening Argentina's own secu- Chron rity, and the Alemann economic program on which the Galtieri government's future so heavily depends. Galtieri and his col- laborators seek close cooperation with the United States, es- philosophicall pecially in the security area and are/ inclined toward the West, But the GOA continues in the NAM impelled by the need for protection on human rights in international fora and by the search for support on the Malvinas/Falklands and Beagle problems. Our principal difference is in the nuclear field. Other fhctors in our relationship are human )RAFTEO BY GRAFTING GATE TEL. EAT CONTENTS ANO CLASSIFICATION APDROV EO B'Yr R er/AMBtHWShlaudemant -3/3/82 202 AEBS Shlaudeman CLEQ ES a3 85F48 51/214 OPTIONAL FORM 153 CLASSIFICATION rFormerty FS-e131 SOIS3-101 ueouery tete oeot ot stete "b 4 / XW I i':".Ct 3 I MRN :4'Nir AJI "2":2 rights, differences on Law of the Seay occasionally conflicting interests in UN fora and various economic issues such as sugar and our graduation policy in the MDBs, Involvement in Central America carries a poli- tical price for the GOA domestically.
    [Show full text]
  • Introduction
    Notes Introduction 1. Ruth Capriles and Marisol Rodríguez de Gonzalo, “Economic and Business History in Venezuela,” in Business History in Latin America: the Experience of Seven Countries, eds. Carlos Dávila and Rory Miller (Liverpool, UK: Liverpool University Press, 1999), pp. 158–75; the quote is from p. 160. Octávio Rodriguez, Teoria do subdesenvolvimento da Cepal (Rio: Forense- Universitário, 1981). 2. World Bank, World Development Report 1999/2000 (New York: Oxford University Press, 1999), pp. 258–59; World Bank, 1999 World Development Indicators (Washington, DC: World Bank, 1999), pp. 204–10 for the mer- chandise trade and pp. 212–18 for the service trade. 3. Thomas L. Friedman, The Lexus and the Olive Tree (New York: Farr, Straus and Giroux, 1999), p. 52. 4. “World Stocks,” Asia Week (9 April 1999), p. 67. 5. United Nations Conference on Trade and Development (UNCTAD), World Investment Report 1997: Transnational Corporations, Market Structure and Competition Policy (New York: United Nations, 1997), pp. 72, 303. 6. World Development Report 1999/2000, p. 15. 7. Horacio Verbitsky, El vuelo (Buenos Aires: Planeta-Espejo de la Argentina, 1995). This is a remarkable mea culpa story by a naval officer who was involved in the operation that routinely eliminated opponents of the regime and subversives by drugging them first, then flying them out to the ocean, and finally dumping them into the ocean. 8. Maria Celina D’Araújo and Celso Castro, org., Ernesto Geisel, 2nd ed. (Rio: Fundação Getúlio Vargas, 1997), p. 230. 9. Angelo Codevilla, “Is Pinochet the Model?” Foreign Affairs (November–December 1993), pp. 127–41.
    [Show full text]
  • “You Block the Road, I Give You Something”
    “You block the road, I give you something” Political Clientelism in relation to Democracy and Citizenship in Gran Buenos Aires, Argentina Master Thesis Latin American and Caribbean Studies Utrecht University By: Sofie Ketelaars [email protected] Supervisor: Elisabet Rasch August 6, 2008 Abstract Based on ethnographic fieldwork in two bordering and poor neighbourhoods in La Matanza, Gran Buenos Aires, this thesis studies the relation between political clientelism, democracy and citizenship. It analyzes the different forms of clientelism and the web of relations in which poor excluded people are connected to political brokers and piquetero organizations in order to obtain food, goods, social assistance programs and solutions to everyday concerns. This study also explores the functioning of key concepts of democracy and citizenship within clientelist exchange relationships, which are accountability, agency, and the claiming of rights, and pays specific attention to a central “direct democracy” system in the organization of the piqueteros . Basado en una investigación etnográfica en dos barrios pobres en La Matanza, Gran Buenos Aires, esta tesis estudia la relación entre el clientelismo político, la democracia, y la ciudadanía. La tesis analiza las distintas formas del clientelismo y la red de relaciones por lo que la gente pobre y excluida está conectada con punteros y piqueteros con el objeto de obtener mercadería, planes sociales y soluciones para preocupaciones cotidianas. Ese estudio también investiga el funcionamiento de conceptos claves de la democracia y la ciudadanía dentro de la relación entre clientes y punteros, como “ accountability ”, “ agency ”, y el reclamo de derechos, y explícitamente presta atención a la sistema de la “democracia directa” que está central en la organización de los piqueteros.
    [Show full text]
  • The Boom and Crisis of the Convertibility Plan in Argentina*
    Revista de Economia Política, vol. 35, nº 2 (139), pp. 325-342, abril-junho/2015 The boom and crisis of the Convertibility Plan in Argentina* SEBASTÍAN PEdrO SALVIA** RESUMO: Este artigo analisa a relação entre as políticas de estado e a economia na Argen- tina entre 1991-2001. Em 1991, foi implementado o regime de currency board chamado ‘convertibilidade “, no âmbito das importantes reformas neoliberais introduzidas pelo Es- tado. Estas reformas neoliberais facilitaram a reestruturação capitalista, caracterizada por um salto na produtividade, nos investimentos e nos lucros. Da mesma forma, essas refor- mas geraram desequilíbrios que, juntamente com as mudanças das condições do mercado mundial de 1998, levaram à crise mais profunda na história da Argentina. A ineficiência das políticas neoliberais do Estado na gestão da crise, com base no ajuste fiscal para garantir a continuidade do financiamento externo, levou a uma depressão econômica e a um crash financeiro, o que provocou uma rebelião em massa e o fim da conversibilidade. PaLavras-cHave: Argentina; 1991-2001; convertibilidade; políticas de Estado; acumula- ção de capital; crise econômica. abstract: This article analyses the relationship between state policies and economy in Ar- gentina 1991-2001. In 1991 the currency board regime named ‘convertibility’ was imple- mented, within the framework of important neoliberal reforms introduced by the State. These neoliberal reforms facilitated capitalist restructuring, characterized by a leap in productivity, investment and profits. Likewise, these reforms generated imbalances which, along with the changes in the world market conditions from 1998, led to the deepest crisis in Argentina’s history. The inefficiency of state neoliberal policies in managing the crisis, based on fiscal ad- justment to guarantee the continuity of external financing, led to an economic depression and a financial crash, sparking a mass rebellion and the end of convertibility.
    [Show full text]
  • Thirty Years of Currency Crises in Argentina External Shocks Or Domestic Fragility?
    Thirty Years of Currency Crises in Argentina External Shocks or Domestic Fragility? Graciela Kaminsky George Washington University and NBER Washington, DC 20052 Amine Mati International Monetary Fund Washington, DC 20431 Nada Choueiri International Monetary Fund Washington, DC 20431 This Version: October 2009 Abstract This paper examines Argentina’s currency crises from 1970 to 2001, with particular attention to the role of domestic and external factors. Using VAR estimations, we find that deteriorating domestic fundamentals matter. For example, at the core of the late 1980s crises was excessively loose monetary policy while a sharp output contration triggered the collapse of the currency board in January 2002. In contrast, adverse external shocks were at the heart of the 1995 crisis, with spillovers from the Mexican crisis and high world interest rates being key sources of financial distress. JEL classification codes: F30, F32, F33, F34, F36 Keywords: currency crises, financial contagion, capital inflows. This paper was written for the Economía 18th Panel Meeting- LACEA, IMPA - Rio de Janeiro, Brazil, November 21, 2008. We thank Gastón Gelos, Roberto Rigobon, Federico Sturzenegger, Carlos Winograd, and participants at the Economia Meeting for helpful comments. The views expressed herein are those of the authors and should not be attributed to the IMF, its Executive Board, or its management I. Introduction Argentina has had an active presence in international capital markets since its independence in the early 19th century. Participation has been quite volatile though. In the early 1800s, in the midst of the lending boom fueled by the end of the Napoleonic wars, Argentina as well as many countries in Latin America were able to issue bonds in London to finance their wars of independence and the civil wars that followed.
    [Show full text]