Amazing to think that when I wrote the following nine posts, Wikipedia had just come online with minimal content. Who knew how much it would grow?! All the info below can be found easily on the internet today, but in 2002-03 few English-language summaries of Argentine history & current events existed.
Beginning in the 1970s, each section brings you progressively closer to my first blog post about Argentina in Feb 2002. Monthly summaries give an almost day-by-day snippet of major headlines to show how quickly changes occurred both before & after devaluation in December 2001.
Military junta, 1976-1983
Decades of political instablity plague Argentina as one of its most powerful figures makes an amazing return to power. After years of exile in Madrid, Juan Perón returns to Buenos Aires in 1973 to take command of the country once again. His arrival is marked by a brutal scene at the international airport where more than 200 people are killed in riots. Unfortunately, the ailing Perón does not have an opportunity to resolve Argentina’s internal guerilla conflicts by the time he dies in 1974. His third wife, Isabel Perón, is given Presidential powers but proves to be an ineffective leader. Manipulated by advisors, she falters in handling the Montoneros guerillas with over 800 political assassinations & economic conditions similar to Argentina in 2001: capital flight, a devaluation of 150% & a large budget deficit.
In 1976, the military detains Isabel Perón and General Jorge Rafael Videla becomes the de facto President. All political parties, Congress & the Supreme Court are dissolved. In the first years of government, the military takes harsh measures on vocal dissidents, students, clergy —anyone who actively opposes their rule. The Mothers of Plaza de Mayo form a small protest group to raise international awareness of those dissidents, now named desaparecidos, or “the missing.” Inflation drops for the first time in years, but interest rates rise & purchasing power falls dramatically. In 1978, a border dispute between Argentina and Chile at the Beagle Strait provokes threats of war until a Papal mission finds a peaceful solution after a year of negotiations. Videla steps down as Commander of the Army but remains President.
The agreement with Chile leaves many in the army angry and disappointed. The official list of desaparecidos increases to 5,000. Annual inflation reaches 139%, blackouts are common due to lack of energy reserves & foreign debt grows to U$S 19 billion. The 1980s begin with the collapse of the Regional Interchange Bank, leaving 350,000 people without their savings. Foreign debt skyrockets to U$S 30 billion as arbolitos make their first appearance in Argentina. In a direct affront to the military junta, the Nobel Peace Prize is given to Adolfo Esquivel, an outspoken architect currently detained in jail for his anti-military rhetoric. Other news finds the first color television broadcast, an agreement with Germany to develop nuclear power & the opening of a series of modern highways which cost U$S 730 million to allow easier access to Buenos Aires.
1981 is a year of political turmoil as Videla hands the Presidency to Roberto Viola. The peso is devalued twice, Isabel Perón is granted permission to relocate to Madrid, and Amnesty International has a list of 9,000 desaparecidos. With heart problems, Viola is replaced against his will by General Leopold Galtieri at the end of the year. In what appears with hindsight to be a last attempt to give the military junta popular legitimacy, Galtieri invades the Falkland Islands in April 1982. Unexpectedly, the UK sends a fleet to defend the islands & with inferior weaponry and poorly trained soldiers, Argentina withdraws in June. With a 90% approval rating at the beginning of the conflict, the military’s legitimacy crashes when the public learns of the defeat. Galtieri is forced from office and interim-President General Bignone is assigned to dismantle the military junta and call for elections. An attempt for self-amnesty by the military causes huge protests and annual inflation reaches at 430%. As Raúl Alfonsín is democratically elected as President, investigation begins into the Falkland fiasco & the death penalty is given to certain generals responsible for leading the invasion. The death penalty does not exist in Argentina for civilians, but the military has their own justice organization with the death penalty. In spite of the ruling, no one is executed. The 2.5 million Argentines living abroad during the dictatorship think about finally returning home.
Raúl Alfonsín, 1983-1989
1984 begins as a year of recovery after seven years of military rule. Although exports outnumber imports, inflation is at 700% and Argentina has a U$S 45 billion debt. Alfonsín implements P.A.N. (Plan Alimentaria Nacional/National Food Bank Plan) to distribute food to Argentina’s many unemployed. Control is freed on movie censorship, & investigations begin into military abuses of power. Still a touchy subject, a popular vote brings a definitive end to the dispute with Chile over the Beagle Strait. Culture & science experience a rebirth under democracy. Isabel Perón visits and is proclaimed leader of the Peronist PJ Party. The discovery & deactivation of a bomb on her plane returning to Madrid shows that old wounds have not healed. 1985 is the high point of Alfonsín’s term as President. In spite of bankruptcy of the Bank of Italy & a number of protests, the Plan Austral significantly reduces inflation & boosts Argentina’s economy. Former President Videla is tried & sentenced to life in prison along with many other military personnel. Galtieri is surprisingly set free. University studies bloom with an increase from 120,000 to 600,000 students in one year.
Prices increase the following year as does debt, & Alfonsín makes a surprising move to diminish his own power & place it in the hands of the people —along with moving the capital from Buenos Aires to Viedma. Congress approves the move but it never takes place. The lower house of the Congress approves a new divorce law, but the Catholic church threatens Senators in order to block approval. A bomb placed by the military in Córdoba before an appearance by Alfonsín highlights the continued conflict between new democracy & old dictatorship. In a reversal of opinion, Alfonsín tries to pardon the military but Congress continues proceedings. The military continues to resist in 1987 with an incident during Holy Week that ends without violence. In spite of refinancing external debt & consequent economic improvement, elections at the end of the year are in favor of the Peronists for the first time since Alfonsín’s election.
1988 marks the beginning of the end for Alfonsín. The military takes over a city in the province of Corrientes & the national airport in Buenos Aires. The end of the year brings further military resistance. Carlos Menem surprisingly wins the bid as the Peronist candidate for President. The base of the Mercosur trade alliance between Argentina, Brazil, Uruguay & Paraguay is laid as the Treaty of Asunción is signed. In addition, the Plan Primavera attempts to control inflation by raising taxes but offers little relief. The first shopping malls appear in Argentina. In 1989, a dry summer means less hydroelectric power & more outages in Buenos Aires. Military resistance continues, & the value of the dollar skyrockets for unknown reasons. As a result, the people elect Carlos Menem, a Peronist, as their new President in May by a leading margin of 47%. Admist a wave of looting, Alfonsín resigns 5 months early & Argentina has a new President earlier than expected.
Carlos Menem, 1989-1999
Menem’s first complete year in office brings a whirlwind of change to Argentina. Responding to out of control inflation which at year’s end is 2314%, plazo fijos are seized and converted into Bonex bonds. Large scale privatization of state-owned businesses commences with the telephone company, 40% of national highways & the national airline Aerolineas Argentinas. Internationally, relations with the UK are re-established & the Argentine Navy participates in the Gulf War. Due to an increased work load & in an effort to obtain a Peronist majority, Menem increases the number of Supreme Court justices from 5 to 9. Old military conflicts from the past arise again, & Menem seeks to ease tension by granting pardons to many accused during the trials under Alfonsín. Scandal erupts the next year as bribes and narcotrafficking are rampant among politicians. Domingo Cavallo enters as Minister of Economy & establishes the Law of Convertibility, pegging the austral to the dollar 1-to-1. In spite of political misbehavior, 1% inflation during 1991 entices the public to vote for the Peronists again.
As 1992 begins, the peso replaces the austral as the monetary unit of Argentina. Convertibility is still in effect. The gas company, many trains & sanitation works are all privatized + a National Library is opened. 500 kilos of explosives destroy the Israel Embassy in a terrorist attack that to present has seen no suspect charged of a crime that left 30 people dead. 1993 shows more political manipulation by Menem. The Olivos Pact is agreed to by all political parties which will change the constitution to add an extra term limit to an elected President, but reduce the term from 6 to 4 years. Argentina deposits U$S 4 billion in the US Treasury in order to participate in the Brady Plan under the guidance of Cavallo. Six provinces are left without train service because no private enterprise is interested in purchasing the antiquated network.
Constitutional changes are approved in 1994 & another Jewish terrorist attack occurs. AMIA (Asociación Mutual Israelita Argentina) is bombed, leaving 86 dead, over 100 wounded, and no suspect to this day. Obligatory military conscription changes to voluntary. Privatization marches on with nuclear power, printing of money, airports, mail service & petrochemical companies leaving state control. Argentina’s new economic strength resists the Tequila Effect of Mexico’s devaluation well & spurs the public to elect Menem for a second term. Unemployment remains high at 18%, & Cavallo denounces several politicians as being part of a mafia & condemns bribes given from the National Bank to IBM. Arms are illegally sold to Ecuador during their conflict with Peru supposedly without Menem’s knowledge. On a positive note, the PanAmerican Games are successfully held in Argentina & a highway connecting Buenos Aires to La Plata opens.
The next two years are characterized by government shuffling. Cabinet members come & go, Cavallo resigns, strikes are rampant, & the Peronists slowly fall out of favor. Fernando De La Rúa of the UCR/Frepaso Alliance is elected head of Buenos Aires. The popularity of this new political party continues into 1997 as the Alliance wins 14 of 24 legislative elections. The movie Evita is filmed as Argentines vocalize their discontent of Madonna portraying the now almost saintly Eva Perón. As elections draw near, the public votes for a change in political party leadership by electing Alliance candidate De La Rúa as President & marks a temporary end of Peronism.
Fernando De La Rúa, 1999-2001
Fernando De La Rúa assumes the Presidency at the end of December 1999. A different type of personality than the previous President, De La Rúa’s year begins quietly. His first low point is in May 2000 when national unemployment reaches a record level of 15.4%. In an effort to generate new solutions, he reorganizes his Cabinet in Oct 2000. Rumors of De La Rúa being involved in a Senate bribe scandal disgust Vice-President Chacho Alvarez, who hands in his resignation. He is never replaced. The year ends on a positive note with a huge U$S 40 billion loan given to Argentina by the IMF. During the next month, the stock market rebounds as hope for economic recovery generates new growth.
This hope is short-lived as an economic crisis in Turkey in Feb 2001 affects investments in global emerging economies like Argentina. In March, the Economic Minister Jose Luis Machinea resigns to be replaced by Ricardo López Murphy. New economic measures of U$S 2 billion in budget cuts cause more resignations from De La Rúa’s Cabinet. A call for a “National Political Agreement” is made & support comes from Domingo Cavallo. López Murphy resigns in protest & Cavallo becomes the Economic Minister for a second time. At this point, the JP Morgan EMBI+ benchmark (Emerging Markets Bond Index) gives Argentina a rating of over 1000 points. The rating is based on the uncertainty of Argentina to repay bonds due in 2001 and quickly becomes a national obsession. Daily EMBI+ figures are reported daily along with the temperature & five-day forecast. Cavallo is granted “superpowers” in order to do whatever is necessary to bring the economy back on track. This news arrives as the government goes U$S 1 billion overbudget during the first quarter of 2001.
The next few months bring increasingly desparate economic measures from Cavallo: an bond exchange of almost U$S 30 billion for new bonds that will expire in 2008, 2018, and 2031, a “convergence factor” consisting of the sum of the dollar and euro divided by 2 to handle import and export duties, and a goal of zero budget deficit. In July 2001, government salaries & retiree incomes of over $500 per month are reduced by 13%. In Aug 2001, the IMF agrees to extend Argentina’s credit by another U$S 8 billion.
01 · Government revenue has fallen 10.7% from last year, leading the central government to transfer 26% less funds to the provinces, or $330 million less. Economic Minister Cavallo insists that the goal of zero deficit by year’s end is still within reach.
02 · The main national airline, Aerolineas Argentinas, has ownership transferred from SEPI (La Sociedad Estatal de Participaciones Industriales) to Air Comet (another Spanish conglomerate consisting of Marsans, Air Plus, and Spanair). They promise to have the airline flying within one month & secure every employee’s job for two years. The airline has been non-operational since June 2001 due to bankruptcy.
07 · $300 million in rail transportation funding is frozen with the goal of achieving zero deficit.
14 · Election day. Up for election are all Senators and half of all Representatives. The Peronist Party gains the majority of seats (41 of 72) & Eduardo Duhalde wins the election for the province of Buenos Aires. As a protest against the three year recession & lack of forseeable improvement, 21% or 3.8 million people did not mark their ballot (votar en blanco, “vote in white”) or wrote in a false candidate (el voto bronca, “fed-up voting”). Another 26.3%, or 6.5 million, abstained even though not voting is illegal in Argentina.
18 · In order to achieve zero deficit, government spending needs to be reduced by a further $6.8 billion. There is talk of reducing government salaries even further & cuts in unemployment compensation. Industrial production fell 8.2% from the previous year.
19 · Unemployment in May 2001 was 16.4%. President De La Rúa states, “There is already a voluntary dollarization; it’s not necessary to make it obligatory.”
20 · Economic Minister Cavallo considers dollarization only as Plan B in spite of pressure from the USA. He also denies rumors of his resignation.
21 · Juan Pablo Cafiero, Minister of Social Development, resigns citing an inability to perform his job with budget cuts of 75%. The government responds by saying the initial cut was to be 90%.
24 · Consumerism continues to fall according to INDEC. Supermarket purchases are down 8.2% and shopping malls are doing 21.6% less business than the previous year. The most significant drop is the fall between Aug 2001 and Sep 2001: – 13.3%.
25 · Unemployment in Buenos Aires reaches 18.7%. Today $293 million is withdrawn from banks.
26 · Economic Minister Cavallo chastises provinces for irresponsible spending & cuts their credit, leaving them to negotiate provincial debt with banks on their own. A new series of 160 million patacón bonds are issued with an expiration date of Nov 2002. Employees & retirees in the province of Buenos Aires will receive up to 60% of their monthly paycheck/pension in patacones.
28 · 72% of all bank deposits are in dollars. The annual interest rate of a plazo fijo in pesos therefore reaches an astounding 21.7%. Plazo fijos in dollars are at 10% annual interest.
29 · An IMF mission headed by Tomás Raichman of Chile visits Argentina. Cavallo requests the $1.2 billion aid package scheduled for December to be disbursed in November, plus a $3 billion IMF-backed guarantee fund in case of Argentina’s inability to pay bonds in December.
30 · USA reviews visa-free entry status of Argentines. Three new government members are sworn in: Minister of Social Security, Minister of Labor, & Minister of Tourism, Culture & Sport.
31 · Decline in usage of most public services since 1994 is reported: international flights -22.9%, intercity trains -29.9%, urban trains -12.9%, city buses – 10.8%, subway -10%. The notable exception was in cell phone usage, up 19.3%.
02 · Murder of the husband of tv talk show host, Georgina. The assassination takes place during a robbery attempt by a taxi driver in Palermo.
04 · The main national airline, Aerolineas Argentinas, resumes flights to Madrid after a suspension of services on June 12th due to bankruptcy proceedings.
09 · USA conditions further aid to Argentina by requesting a balanced budget & zero deficit by year’s end.
11 · President De La Rúa visits the UN & President Bush, asking for a restructuring of Argentina’s public debt.
13 · The city of Córdoba issues its first 100 million lecops.
17 · In the midst of economic turmoil, the first national public census is taken in over a decade. Normally taken by teachers, some refuse to participate due to cutbacks in education and fear of not getting paid. Results have slowly trickled in since then.
19 · With the goal of saving an estimated $4 billion in interest, Economic Minister Cavallo explains plans for voluntary debt exchange available as of today. With a $60 billion limit, guaranteed new bonds will be issued by the government for up to 7% annual interest to replace previous bonds issued at 11.5% & due in December. Old bonds will accrue interest equal to 70% of their original value with final payback scheduled in 2005. Bonds which are NOT exchangable are treasury notes, Brady bonds, government bonds at 9% interest expiring in 2002, zero coupon global bonds, and external notes issued in May 2001.
20 · Former President Menem is released from jail after spending 5 months and 13 days incarcerated for illegally selling arms to Croatia and Ecuador. The ruling judge of the Supreme Court notes that “there was no unlawful association nor ideological falseness in any public document” by Menem.
21 · One day after being released from prison, former President Menem announces his plans to run for the presidency in the upcoming 2003 elections.
24 · Initial results show that $12.5 billion in bonds have been exchanged with a projected interest savings of $650 million.
25 · The deficit of the health care system for retirees (PAMI) reaches $281 million.
26 · According to INDEC, there was a sharp drop in consumerism in October 2001, resulting in -10.3% sales in supermarkets and -20.1% sales in shopping malls from the previous year.
30 · Economic Minister Cavallo tries to prevent further capital flight from Argentina. He states, “Many irresponsible people have talked about devaluation.” That day, he approves an agreement to return 5% IVA (national sales tax) to everyone on all debit card purchases at every month end.
01 · Corralito begins. Limits cash withdrawals to $1000/month in installments of $250/week as well as places a $1000 limit on cash that anyone can physically take out of the country. Cavallo justifies implementation as a means to reduce speculation and capital flight as well as control under-the-table employment (estimated at 40% of the workforce). This way, everyone must have a bank account & salaries must be deposited in the bank. Use of debit cards will replace what were previously cash transactions. In addition, yesterday was the final day for the optional debt exchange offered by the Treasury. Deemed a success, over $50 billion was exchanged which will save the government an estimated $3 billion in interest payments.
02 · Economic Minister Cavallo is given complete control of the country’s finances.
03 · Head of the IMF delegation, Tomás Reichman, is ordered to return to Washington, DC.
05 · Corralito change #1. The monthly allowance of $1000 can now be withdrawn at once, and $10,000 is the new limit for cash that can be taken out of Argentina. A drop in sales of 50% is reported & more than 50,000 new bank accounts are opened in two days.
06 · According to the IMF, Argentina is not fiscally sound to receive a scheduled $1.26 billion aid package. Cavallo reassures that bonds reaching maturity on 20 Dec will be paid. Banks have difficulty dealing with the quantity of new customers & delay the implementation of the one-time $1000 withdrawal.
08 · Banks open on Saturday as Cavallo takes a trip to visit the IMF in Washington, DC.
09 · The IMF requests a $4 billion cut in the budget. Former President Menem & President De La Rúa at odds.
11 · Banks limit the number of accounts per person to one. In order to avoid the corralito, many people opened duplicate accounts. Banks announce that all duplicate accounts opened after 3 Dec will be closed. More than 500,000 new accounts were opened in the first week of Dec.
12 · Large 24-hour strike organized by the CGT union. No trash collection at night & tomorrow no buses, trains, or subway will be available. Cavallo announces a one week delay in payment of pensions for those who receive over $200/month affecting 1.4 million people. First large cacerolazo and apagón (voluntary blackout by businesses and homes) lasts for 15 minutes.
13 · Economic Vice-Minister Daniel Marx resigns citing differences in opinion with Cavallo about the debt exchange in Nov and the corralito. Unemployment in October is 18.3%.
14 · Cavallo declares that default has been avoided. Of the $700 million in bonds due, half are paid in cash & the other half are renegotiated.
15 · First occurance of saqueos, or looting of supermarkets, south of Buenos Aires & in the city of Mendoza. Banks are open today even though it is Saturday, & there is talk of dollarizing the economy. As if Argentina did not have enough trouble at home, 100 soldiers are sent to Afghanistan as part of a UN peacekeeping force.
16 · More saqueos in Mendoza and Entre Ríos.
17 · Corralito change #3. In hopes of increasing consumerism, authorization is given to withdraw an extra $500 before 31 Dec for the Christmas season. Cavallo sends the 2002 budget to Congress for approval.
18 · Chief IMF economist Kenneth Rogoff states that in Argentina “the combination of fiscal policy, debt & debt exchange policies is not sustainable.” President De La Rúa denies need for worry in the face of more saqueos which are reaching a magnitude comparable to those of 1989. Credit card annual interest rates skyrocket to 29% for dollar accounts and 40% for peso accounts.
19 · Food distribution is widespread as more saqueos plague the country. In an evening television address, President De La Rúa declares an Estado de Sitio, or state of emergency, in order to act against the spread of more looting. Angered by the corralito and with lack of faith in the political system, the middle class spontaneously begins a cacerolazo after the presidential address. Groups of people from various parts of the city march peacefully to Plaza de Mayo. By popular demand, Economic Minister Cavallo resigns along with the entire Cabinet. A fire is started in the Ministry of Economy located near Plaza de Mayo & police begin to suppress the demonstrators with tear gas.
20 · Continuing protests in Plaza de Mayo with 5 dead & 150 wounded. President De La Rúa resigns, leaving the Casa Rosada by helicopter. Senate leader Ramón Puerta temporarily heads the government as Congress begins proceedings to elect a new president. Cavallo is prohibited from leaving the country. The IMF issues a statement on events in Argentina & blames the government 100%.
21 · Adolfo Rodríguez Saá, governor of San Luís province, is chosen as interim president for 60 days until elections are held on 3 Mar 2002. A provisional Cabinet is appointed. Death toll among protestors & looters rises to 18 with almost 500 wounded.
22 · Former President Menem decides not to run for President in the coming March elections.
23 · President Saá’s first act is to declare default on Argentina’s loans & confirm the 1-to-1 parity of the peso to the dollar. All salaries will become available around 5 Jan 2002 with relaxation of the corralito. Argentina gets the world spotlight for a moment as the New York Times blames the IMF for Argentina’s problems, citing an IMF mandate prohibiting the World Bank from loaning money to Argentina. Likewise, the Wall Street Journal says Argentina should look to Russia for advice before the IMF.
24 · Plan to issue $10 billion in new bonds, called the argentino, to circulate alongside the peso as of Jan 15. Investigation into repression at Plaza de Mayo begins.
27 · Former Economic Minister Cavallo asks for forgiveness. The cap on pension payments is raised from $200 to $500. Many travelers are experiencing credit card problems on trips to foreign countries.
28 · Shift of protests focuses on the Supreme Court with daily cacerolazos in Tribunales. Patacones will be issued for 100% of salaries and pensions in the province of Buenos Aires. Another large cacerolazo takes place with more violence in Plaza de Mayo, and four protestors enter Congress, causing slight damage & a small fire. In a 2 day rush on banks, future statistics will show that $1.4 billion was withdrawn from banks during the past two days alone.
30 · President Saá resigns via satellite from San Luis province citing a lack of political support from his party. Senate leader Puerta and the Cabinet also resign. Who’s president now? Plans for the argentino are scrapped and more lecops are printed. Three teenagers are killed by local police in the neighborhood of Floresta after a disagreement on the protests in Plaza de Mayo.
31 · The new year will begin with yet another new president elected by Congress: Eduardo Duhalde, former Senator from the province of Buenos Aires.
03 · The Economic Emergency Law is announced by President Duhalde. There will be a fixed devaluation, or a realignment of the 1- to-1 peg to the dollar. For 90 days, the peg will be U$S 1 = $1.30. All credit card debt will be converted to pesos as will contracts for rental properties. Rental agreements can be renegotiated for the convenience of both parties, & any changes will take effect in 180 days. Former President Menem voices his disapproval with Duhalde & opts for dollarization.
04 · As a result of yesterday’s announcements, long lines form at banks to pay off loans that were previously in dollars with pesos before devaluation is official.
05 · In spite of recently announcing default, Argentina pays the IMF U$S 75 million in hopes of avoiding a bad credit rating & keeping on good terms for a desired U$S 20 billion loan. Statistics are announced that in Nov 2001, Argentina had U$S 2.4 billion withdrawn and Uruguay (known as the Switzerland of Latin America) received at least U$S 327 million of that total.
06 · Congress approves devaluation but at a rate of U$S 1 = $1.40. Prices on many items immediately increase. Corralito change #4. Anyone that has a bank account for the deposit of their salary can withdraw up to $1500 per month.
08 · The Supreme Court upholds the corralito as the free market rate for the dollar is $1.45. No layoffs are permitted for the next 180 days, a cacerolazo takes place in Barcelona in support of Argentina, & The Wall Street Journal slams the IMF for forcing Brazil to devalue their currency years earlier, disrupting the economy in the Mercosur trade block, & offering ineffective advice to Argentina, & eventually forcing a devaluation there as well. &, &, &…
09 · In what becomes a worldwide form of protest, a cacerolazo is started in Paraguay after a day of looting.
10 · A complex scheme is planned for returning deposits to everyone, respecting the currency of the account whether in pesos or dollars. Plazo fijos in pesos will have a 7% annual interest rate & will be freed & paid in quotas of smaller totals as soon as Mar 2002. Owners of dollar accounts can withdraw up to U$S 500 per month & have the option of converting up to U$S 3000 to pesos at the official rate of $1.40. Dollar amounts over U$S 5000 will be free in a year’s time & paid back in regular installments.
11 · The dollar hovers around $1.65. 75% of dollar deposits are immobilized by the measures announced yesterday. As another option, plazo fijos can be cashed in to buy property or registered goods such as cars. Argentines respond with a night of massive cacerolazos, violence in Plaza de Mayo, & destruction of bank fronts.
13 · De La Rúa states that he has U$S 1.3 million trapped in the corralito & feels that the Peronist PJ party conspired to force him from office.
14 · A new IMF mission arrives as more statistics are made public. $1.8 billion was withdrawn from Argentine banks last year & PAMI, the health care service for retirees, is now $110 million in debt.
16 · For all public employess and retirees, a 13% reduction in income is put into effect. The IMF postpones for one year a payment of $933 million by Argentina. The dollar reaches $1.85, & Europe begins to import Argentina beef for the first time since the foot-and-mouth epidemic.
17 · The president of the Central Bank resigns. Up to U$S 5000 can be voluntarily converted to pesos from the previous U$S 3000 limit.
18 · US President Bush calls President Duhalde to reaffirm his support & to condition any further aid by seeing a “sustainable plan” for economic recovery. Protests explode in the interior & the dollar reaches $2.05. Former President Menem sharply criticises Duhalde, & many Peronists ask for Menem’s removal from the party.
19 · Menem & Duhalde come to terms, but Menem is still in favor of complete dollarization. Duhalde admits that deposits in dollars cannot be returned due to lack of currency.
21 · Change in the flat refund of 5% IVA on all purchases, as a sliding scale is adopted based on the type of good purchased.
24 · Corralito change #5. Exceptions are announced that will allow complete access to all funds by people over 75 years old, anyone with a serious illness, & anyone who has been in a serious accident. Menem is questioned about having large amounts of cash in Swiss bank accounts.
25 · Another massive cacerolazo in Plaza de Mayo with more violence and police repression. Drop in Dec 2001 of supermarket sales of – 14.4% and in shopping malls of -35%.
27 · Former President Saá attacks President Duhalde, criticizing almost every policy since he resigned in Dec 2001.
29 · Complete conversion of the economy is considered with all non-bank debts converted on a 1-to-1 basis and all dollar accounts converted at $1.40.
01 · In a ruling of 6-3, the Supreme Court declares the corralito unconstitutional, citing a violation of Articles 17 & 18. Economic Minister Remes Lenicov unexpectedly departs to the US. The microcentro overflows with people wanting to buy dollars with lines as long as three blocks.
02 · President Duhalde accuses the Supreme Court of being blackmailed & says their decision is not a surprise but is very serious and will bring harsh consequences.
03 · Economy will be converted as described on 29 Jan 2002. The peso will be allowed to float freely on the currency market. The Supreme Court awaits the reaction of the government. On a positive note, Máxima Zorroguieta weds Dutch heir Prince William of Orange.
04 · Suspension of all Supreme Court cases against the corralito. Government orders banks to sell all dollars at $1.40 to the Central Bank. US backs Argentina’s decision to devalue completely.
05 · National elections will be held 14 Sep 2003. January inflation reached 2.3%. All banks sign an agreement not to sell dollars & exchange agencies set a U$S 1000 per person limit on transactions.
07 · Ex-chief of Federal Police is detained for the violence in Plaza de Mayo during the first cacerolazo. Three sub-commissions formed by Congress begin their investigation into Supreme Court activities after declaring the corralito unconstitutional.
08 · Central Bank forms plan to control exchange rate of the dollar by injecting large sums of dollars from federal reserves on days deemed necessary. With this measure, Duhalde hopes to keep the dollar at $1.70.
11 · Government denies a rise in petroleum prices. The dollar reaches $2.10 as all salary bank accounts are freed from the corralito.
12 · My reports begin! Start by reading no more dollars & continue with any post from “Argentina Experienced”.
[Originally posted in Argentina Experienced, a website I created to document living in Buenos Aires after the 2001 economic crisis. Text has been edited for style. Definitions of econ terms can be found in the glossary. Politician biographies may help as well.]