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. |
