Boring is not an adjective that can be used to describe Argentinaâ€™s
political history. The country has encountered numerous coup dâ€™etats and
institutional breakdowns. It has survived military overthrows, civil unrest and
many other difficult scenarios. However since 1983, Argentina has had a relatively
stable government. The main reasons for this stability include factors of
globalization, military relations and the political culture of Argentina.
Accordingly, we believe that there is minimal chance that a coup dâ€™etat will
take place in the next 5 years.
Argentina has reached a status of a
major player in international trading. In the past, the country has mainly
traded with Europe and other Latin/South
American countries. However, now Argentinaâ€™s
trade has gone more global and it has started trading with other major powers
such as the United States. Consequently, this economic growth and
stability has suppressed civil unrest. The economic growth also allowed for the
level of inequality among the social classes to diminish. Accordingly, this
provided for a stable environment which coups are unlikely to stem from. If
people are happy and they have money, they are not likely to try to overthrow
also made stronger ties with other countries that serve as external factors as
per the Bowman theory of Measures of Democracy. In particular, Argentina has a relationship with the United States,
which is a major international power. This was especially conveyed during the
Menem presidency in which President Carlos Menem worked hard to form strong
bonds with the United States
through lowering tariffs and becoming an associate member of NATO. Consequently,
the Argentine administrations after Menem have worked just as hard to maintain
this relationship. Thus, the government is aware that any corrupt proceedings
would result in American disproval and possible intervention. The Argentine
government clearly wants to avoid this as well as gaining a bad international
reputation due to political corruption.
Since 1983 there have been no
specific groups that have called on the military to overthrow the government.
Historically, when groups- including the ruling government- were in turmoil,
they have called upon the military to aid them in achieving their agendas. The
only major event that the military could have intervened was the economic
crisis of 2001. However, the government did not call upon them as they would
have previous to 1983. A major example of this was during the 1960â€™s and 70â€™s
when many people were killed as a result of the many coups that occurred. The
most notable case was the 30,000 â€śdesparecidosâ€ť (the disappeared people) during
the Dirty War that were systematically eliminated by the military because they
were considered â€śenemies of the state.â€ť
military is somewhat on a leash due to relations with other countries that have
stronger and more efficient militaries that would intervene and stop any
military overthrows. In particular, the United States, a major world power,
would get involved. The US
has a history of interceding and becoming involved in Latin/South American
affairs. The American Governmentâ€™s School
of Americas is evidence
of this fact.
also made a shift in the overall focus of the military. In the past, the
military has been used to serve the political needs of whoever was in charge.
However, now the class power relations have changed drastically. The military
is used to protect citizens and maintain stabilities, not start coups.
The overall tone of the
political culture of Argentina
has changed since 1983. Although the citizens still are very politically
active, there is not as much unrest. Much of this is due to the fact that no
civil rights have been repressed or taken away. There has been a great shift
towards a more democratic country and government that has contributed to this
suppression of civil unrest. Since 1983, all parties, even the much debated and
controversial Peronist Party, have been able to run in all elections. This
allowed for a more fair and egalitarian process and political structure.
also been somewhat of an overall change in the international political culture.
Although there are still coups and assassinations occurring around the world,
there has been a shift to use more democratic and peaceful means to express
opinions. Accordingly, the Argentines have used measures such as non-violent
protests at Plaza de Mayo, to convey their thoughts and feelings to the
government. They continue to use these methods because their protests have
yielded positive results and changes. One example of this is seen by the weekly
protests by the mothers of the desparacedos. Presidents since 1983 have worked towards
giving justice to those that disappeared by ordering excavations as well as
locating the biological families of the stolen babies.
Will there be a coup
in the next 5 years?
Gabriel, our fearless tour guide
and amigo, as well as the majority of other Argentines feel that a coup is
highly unlikely. The country is in a good state. The national debt has been
paid off to the International Monetary Fund, exports have tripled, the
unemployment rate has gone down, the economy has grown 10% annually in the last
3 years and tourism also continues to grow. In essence, there is no need for a
coup. If there were to have been a coup, it would have occurred in 2001, but it
Argentina has learned from the
past. The citizens are very adamant about not repeating tragedies such as the
Dirty War. The country has traveled a tumultuous path to democracy. Hopefully, Argentina will
stay in this realm of stable democracy which will lead to a bright and
prosperous future for this dynamic country.
Argentina is a
country that has endured and overcome much turmoil in many aspects. In
particular, the country has had its share of economic crises. Currently,
President Nestor Kirchner has worked arduously to recover from the 2001 crisis.
President Kirchner has gone to great measures to rebuild the economy. This work
has paid off due to the growing economy with export rates tripling and an
overall economic growth of 10% annually in the last 3 years. However, like many
things in life, this growth will not continue at such a rate. According to
economist Kristin Forbes, Argentina,
like Russia, Korea, Brazil and other countries, will
follow a trend of gradual economic growth decline due to the â€śdead-cat bounce.â€ť
In essence, this means that the Argentine economy, like a dead cat, will bounce
back up if it falls from high enough but does not mean that the recovery will
sustain and last.
Argentina suffered a major economic
crisis in 2001. There were various reasons that contributed to this collapse. One of the main reasons was the massive foreign
debt the country accumulated on account of repayment to global investors in the
form of long-term national bonds. In the past, Argentina was deemed the next major
â€śemerging market.â€ť Consequently, many international wealthy parties heavily
invested in the Argentine market and expected a huge payback in the long term.
This profitable image was also boosted due to former minister of economic
affairs Domingo Cavalloâ€™s convertibility plan. This plan pegged one Argentine
peso to one American dollar. This plan
was formulated during Menemâ€™s presidency, as a means to link Argentina to the U.S., which was viewed by the
Argentine government as the major power in the world. Accordingly, one linkage
was to base their currency to that of the dollar. This was seen as a brilliant idea at the
time, because it encouraged many people worldwide to invest in Argentina. The country was so ecstatic that their market
and products were finally being noticed that they didnâ€™t realize how much debt
they were actually incurring. Consequently, the Argentine government kept
signing bonds that promised repayment to their investors without realizing the
risk they were taking. The bonds were long-term with high interest rates. This
investment in these bonds was one of the main proponents that led to reckless
borrowing. In the end, this is what essentially caused the economic
It is evident that Argentinaâ€™s economy
depends on the successes or failures of other countries. Argentinaâ€™s economy functions in the nature of
the â€śdomino effect,â€ť meaning that if one of their dependent countries falls, then
the rest of the other countries also fall including Argentina. Thus, the collapse of
the Brazilian economy in 1999 greatly affected Argentinaâ€™s market. The Brazilian
breakdown was in accordance to the Russian economy downfall. The Brazilians
devalued their currency, which hurt the Argentines because there was a lot of
business done between the two neighboring countries. The amount of money earned did not equal the
amount borrowed. This forced Argentina
into a corner where the only plausible solution was to devalue their currency
like Brazil. The Argentine government did not want to
devalue their currency because of great potential in loss of investments if
devaluation occurred. They would lose
all of their foreign investors and Argentina would slowly spiral
downwards. This refusal to devalue
resulted in further debt and rumors started to spread overseas that Argentina might
be on the verge of defaulting. This led
to a panic within the realm of Argentine investors and most of them pulled
their funds out of the Argentine market.
The country imploded in 2001 and finally Argentina was forced to declare
default on its bonds.
Since the economic collapse, Argentina has
slowly risen from the ashes. The
countryâ€™s GDP growth rate has risen to 10% annually over the past five
years. This result has come about to an
increase in domestic industry development, a growing sense of nationalism and
more prudent dealings with foreign investments.
Unemployment, which peaked at the crisis, has reduced
significantly. However, the percentage
of those unemployed still remains higher than what it used to be during the
early 1990s, so there is still room for improvement. The Jefe and Jefa de Hogar
plans have also aided low income families. Foreign investments have started to
pour in again. However investors are much more cautious this time. The export
rate has also tripled under President Kirchnerâ€™s term.
After much discussion amongst
ourselves and with other Argentines we believe that the Argentine economy will
not keep rising in the future at the same high rate as in the past. The novelty of investing in Argentina will
eventually wear off because there are other â€śemerging marketsâ€ť rising around
the world. According to our local historian/tour
guide, Gabriel, countries like India
and China are in competition
because of the enormous growth that both of those countries are exuding. Argentinaâ€™s rate of success depends
on the growth rate of these competitive emerging markets. If Argentina maintains a level of
competition at the same rate as its competition, the future may be promising.
economic studies show that countries such as Russia
and Brazil, who have
undergone the same economic crises as Argentina, have leveled off
economically once the country has reached a peak point or peak rate. Accordingly, we believe that Argentina has
reached this â€śpeakâ€ť point and therefore will not dramatically increase or
maintain its current rate of growth.
Instead, it will grow at relatively continuous smaller rates and reach a
plateau. This means that although Argentina may
experience a large growth rate like its current market, this rate will not be
consistent in future markets. Argentinaâ€™s
economy will be like a steady EKG chart in the fact that it may have big ups
and downs, but overall it will stay at a relatively consistent level.