Decades of foreign investment and massive immigration set the stage for economic revolution. Britain invests heavily in infrastructure. Argentina, a constitutional democracy, is among the world's richest nations. Conservative forces dominate politics until 1916, when the Radicals win control. Emphasis on fair elections and democratic institutions lets the middle class enter the political process.
Unemployment resulting from the world economic crisis causes profound social and political unrest. The military forces the Radicals from power and improves economic conditions, but political turbulence intensifies. Empowered by industrialization through import substitution, the urban working classes lead several unsuccessful uprisings prior to the 1937 presidential elections.
Following the organization of a left-wing Popular Front, right-wing parties unite in a so-called National Front. The right wing's Roberto Ortíz wins an election noted for vote-rigging and fraud. He does attempt to strengthen democracy, though, and adopts countermeasures against German agents' activities. Ill, he resigns in 1942; his successor, Ramon Castillo, is overthrown in a military coup.
Populist Juan Domingo Perón, Minister of Labor and then two-term president, appeals to nationalist sentiment. Pro-labor rhetoric and a charismatic wife, former actress Eva Duarte ("Evita"), win him mass support among urban and rural workers. Opposition is blatantly suppressed. A strongly protective, inward-looking development strategy creates a faltering economy unable to compete internationally.
A military rebellion forces Perón to resign. A revolving door of elected presidents and military juntas follows. Alternating military and civilian administrations unsuccessfully address diminished economic growth and increasing social and labor demands. Personal and political freedoms are restricted, and terrorism escalates. Violent labor strikes and student riots pave the way for Perón's return.
Perón returns to the presidency. When he dies in 1974, his second wife, Isabel, succeeds him. A stabilization program briefly improves economic conditions, but they deteriorate quickly as a result of international shocks. Political turmoil and divisions within the Peronist party undermine Isabel's administration. A military coup removes her from office.
A military junta wages a "dirty war" against the left. Human rights abuses escalate as thousands "disappear." The government borrows heavily and shifts the economic emphasis to open competition. The policy proves devastating: Many factories close, and an economic crisis develops. The loss of the Falklands Islands war against the British and charges of corruption further discredit the government.
The country returns to constitutional rule under President Raúl Alfonsín, who fails to stabilize the economy. He does, however, renegotiate the country's massive foreign debt, declaring a moratorium on principal and refinancing interest payments. Increased poverty and persistent inflation lower the standard of living. Income distribution becomes increasingly unequal, and riots are frequent.
President Menem spurs economic growth through controversial measures such as extensive deregulation and privatization in the utilities, transportation, and infrastructure sectors. Central to his reforms is the Convertibility Law, which pegs the peso to the U.S. dollar. Charges of corruption and political infighting plague politics. Rising poverty and falling wages mitigate macroeconomic success.
During Menem's second term, his austerity program proves increasingly unpopular within his own administration. A series of economic shocks, including devaluation in Brazil, puts the economy, now fully integrated in the world market, into recession. Opposition candidate Fernando de la Rúa wins the presidency, promising renewed economic growth and lower corruption, unemployment, and crime rates.
De la Rúa fails to live up to his promises in the first year of his term. The economy does not rebound and is further affected by the economic slowdown in the United States. Payment of external debt interest is crippling. Corruption scandals continue. Argentina faces riots, massive debt, and 20 percent unemployment. President de la Rua resigns in the face of economic collapse.
Peronist leader Eduardo Duhalde is named president. His government decides to devalue the Argentine peso, which had previously been pegged to the dollar. A new wave of civic unrest ensues; the banking system fails, poverty spreads, and Argentina defaults several times on its external payments. Duhalde reaches a last-ditch agreement for IMF standby support and calls elections for April 2003.
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