Argentina - History

The first signs of human presence in Argentina are located in the Patagonia (Piedra Museo, Santa Cruz), and date from 11,000 BC. Around 1 AD, several maize-based civilizations developed in the Andean region (Santa María, Huarpes, Diaguitas, Sanavirones, among others). In 1480, the Inca Empire under the rule of emperor Pachacutec launched an offensive and conquered present-day northwestern Argentina, integrating it into a region called Collasuyu. In the northeastern area, the Guaraní developed a culture based on yuca and sweet potato. The central and southern areas (Pampas and Patagonia) were dominated by nomadic cultures, unified in the seventeenth century by the Mapuches.

European explorers arrived in 1516. Spain established a permanent colony on the site of Buenos Aires in 1580; the Viceroyalty of the Río de la Plata was created in 1776.
 

In 1806 and 1807 the British Empire launched two invasions to Buenos Aires, but the creole population repelled both attempts. On May 25, 1810, after confirmation of the rumors about the overthrow of King Ferdinand VII by Napoleon, citizens of Buenos Aires took advantage of the situation and created the First Government Junta (May Revolution). Formal independence from Spain was declared on July 9, 1816 in Tucumán.

In 1817, General José de San Martín crossed the Andes to free Chile and Peru, thus eliminating the Spanish threat. Centralist and federalist groups (Spanish: Unitarios and Federales) were in conflict until national unity was established and the constitution promulgated in 1853.

Foreign investment and immigration from Europe led to the adoption of modern agricultural techniques. In the 1880s, the "Conquest of the Desert" subdued or exterminated the remaining indigenous tribes throughout the southern Pampas and Patagonia.

From 1880 to 1945, Argentina enjoyed increasing prosperity, prominence and became one of the top 10 richest countries in the world, through an export-led economy. The population of the country swelled sevenfold. 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.

President Juan Perón (1946). From the 1950s to 1970s, soft military and weak civilian administrations traded power. During those years the economy grew strongly and poverty declined (to less than 7% in 1975), but became increasingly protectionist. At the same time political violence continued to escalate. In 1973, Perón returned to the presidency, but he died within a year of assuming power. His third wife Isabel, the Vice President, succeeded him in office, but the military coup of March 24, 1976 removed her from office.

The armed forces took power through a junta in charge of the self-appointed National Reorganization Process until 1983. The military government repressed opposition and terrorist leftist groups using harsh illegal measures (the "Dirty War"); thousands of dissidents "disappeared", while the SIDE cooperated with DINA and other South American intelligence agencies, and with the CIA in Operation Condor. Many of the military leaders that took part in the Dirty War were trained in the U.S.-financed School of the Americas, among them Argentine dictators Leopoldo Galtieri and Roberto Viola. The military dictatorship (1976-1983) greatly increased the extent of the country's foreign debt. From that point the economy of the country began to be controlled more and more by the conditions imposed on it by both its creditors and the IMF (International Monetary Fund) with priority given to servicing the repayment of the foreign debt. These and other economic problems, charges of corruption, public revulsion in the face of human rights abuses and, finally, the country's 1982 defeat by the British 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 six months before his term was to be completed.

The 1990’s began with hyperinflation. 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. However, the peso was tied to the dollar at an artificially high rate that could only be maintained by flooding the market with dollars. As a result the foreign debt increased enormously and state companies and services were privatized. The total opening up of the market to foreign goods, which up until then were produced locally, resulted in the collapse of local industry. So while part of the population was saving in dollars, traveling overseas, and purchasing imported and luxury goods cheaply, the rest of the population was experiencing an increase in both poverty and unemployment. The IMF and the world economists praised the liberalization of the Argentine market, and the country was presented as a “model student”. Toward the end of the 1990s, large fiscal deficits and overvaluation of the pegged peso caused a gradual slide into economic crisis. In 1998 a period of profound economic recession began. This was a direct result of the economic measures which dominated the decade of the 90’s and which produced a false sense of stability and well being. By the end of his term in 1999, these accumulating problems and perceived corruption had made Menem unpopular.

The Menem and de la Rúa administrations faced diminished competitiveness in exports, massive imports which damaged national industry and reduced employment, chronic fiscal and trade deficits, and the contagion of several economic crises. Unemployment reached as high as 25% of the economically active population, and another 15% had only part-time work. The Asian financial crisis in 1998 precipitated an outflow of capital that mushroomed into a recession, and culminated in economic crisis in November of 2001. The governing coalition was forced to undertake a series of measures including the freezing of bank accounts. This was done to halt the flow of capital out of the country and to stem the growing debt crisis. However a climate of popular discontent was unleashed as a result. On the 20th of December 2001 Argentina was thrown into its worst institutional and economic crisis for several decades. There were violent street protests, which brought about clashes with the police and resulted in several fatalities. The increasingly chaotic climate, amidst bloody riots, finally resulted in the resignation of President de la Rúa. The economic crisis accentuated the people’s lack of trust in their politicians. During this time street protests were accompanied by the cry “they all should go.” The "they" referred to the politicians, especially those involved in many reported acts of corruption. They were also accused of dealing fraudulently with public goods and money, without any judicial sanctions in place to curb the corruption.

In two weeks, several presidents followed in quick succession, culminating in Eduardo Duhalde's being appointed interim President of Argentina by the Legislative Assembly on 2 January 2002. Argentina defaulted on its international debt obligations. The peso's near eleven year-old linkage to the United States dollar was abandoned, resulting in major depreciation of the peso and a spike in inflation.

With a more competitive and flexible exchange rate, the country implemented new policies based on re-industrialization, import substitution, increased exports, and consistent fiscal and trade surpluses. By the end of 2002 the economy began to stabilize, mainly thanks to the soybean and other cereals' boom and dirty flotation of the exchange rates. In 2003, Néstor Kirchner was elected president. During Kirchner's presidency, Argentina restructured its defaulted debt with a steep discount (about 66 percent) on most bonds, paid off outstanding debts with the International Monetary Fund, renegotiated contracts with utilities, and nationalized some previously privatized industries. Currently, Argentina is enjoying a period of high economic growth and political stability.