| When
Europeans reached Argentina in 1502, the region
had been inhabited by corn-based civilizations like
the Incas for at least a millenium and a half. Spain
established a permanent colony on the site of Buenos
Aires in 1580, and the Viceroyalty of the Río
de la Plata in 1776. In 1806 and 1807 the British
Empire invaded the Viceroyalty, but the creole population
managed to repel the invasions. On May 25, 1810,
after the confirmation of the rumors about the overthrow
of King Ferdinand VII by Napoleon, the most prominent
citizens of Buenos Aires took advantage of the situation
and created the First Government Junta. Independence
from Spain was declared on July 9, 1816. Centralist
and federationist groups were in conflict until
national unity was established and the constitution
promulgated in 1853.
From
1880 to 1930 Argentina enjoyed increasing prosperity
and prominence. Conservative forces dominated
Argentine politics until 1916, when their traditional
rivals, the Radicals, won control of the government.
The military forced Hipólito Yrigoyen from
power in 1930 leading to another decade of Conservative
rule.
Political
change led to the presidency of Juan Perón
in 1946, who tried to empower the working class
and greatly expanded the number of unionized workers.
The Revolución Libertadora of 1955 deposed
him.
Economic
problems, charges of corruption, public revulsion
in the face of human rights abuses and, finally,
the country's 1982 defeat in the Falklands War
discredited the Argentine military regime.
Democracy
was restored in 1983. Raúl Alfonsín's
Radical government took steps to account for the
"disappeared", established civilian
control of the armed forces, and consolidated
democratic institutions. The members of the three
military juntas were prosecuted and sentenced
to life terms. Failure to resolve endemic economic
problems and an inability to maintain public confidence
led to Alfonsín's early departure.
President
Carlos Menem imposed a peso-dollar fixed exchange
rate in 1991 to stop hyperinflation and adopted
far-reaching market-based policies, dismantling
protectionist barriers and business regulations,
and implementing a privatization program. These
reforms contributed to significant increases in
investment and growth with stable prices through
most of the 1990s.
The
Menem and de la Rúa administrations faced
diminished competitiveness of exports, massive
imports which damaged national industry and reduced
employment, chronic fiscal and trade deficits,
and the contagion of several economic crises.
The Asian financial crisis in 1998 precipitated
an outflow of capital that mushroomed into a recession,
which led to a total freezing of bank accounts
(the corralito), and culminated in a financial
panic in November 2001. The next month, amidst
bloody riots, President de la Rúa resigned.
In
2 weeks, several new presidents followed in quick
succession culminating in Eduardo Duhalde being
appointed interim President of Argentina by the
Legislative Assembly on 2 January 2002. Argentina
defaulted on its international debt obligations.
The peso's almost 11-year-old linkage to the U.S.
dollar was abandoned, resulting in massive depreciation
of the peso and inflation, in turn triggering
a spike in unemployment and poverty. Although
it was one of Argentina's worst crises ever, a
military coup did not materialize and democracy
remained in place.
With
a more competitive and flexible exchange rate,
the country started implementing new policies
based on re-industrialization, import substitution,
increased exports, and consistent fiscal surplus.
By the end of 2002, the economy began to become
stabilized. In 2003, Néstor Kirchner was
elected president. During Kirchner's presidency
Argentina restructured its defaulted debt with
a steep discount (about 70%) on most bonds, renegotiated
contracts with utilities, and nationalized previously
privatized industries.
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