Argentina. The plans to build two cellulose factories
near Fray Bentos on the Uruguayan side of the Uruguay
border, opposite the Argentine city of Gualeguaychú in the
province of Misiones, led to a widespread diplomatic
conflict between the two countries during the year.
Environmental activists in Argentina, backed by the
government and Greenpeace, claimed that the factories will
use dubious technology with devastating consequences for
both agriculture and the river's ecosystem, and three
bridges across the river were blocked from February by local
residents in protest. The factories, which are being built
by Spanish ENCE and Finnish Botnia, involve an investment of
USD 1.8 billion, and a third factory with Swedish-Finnish
Stora Enso as an entrepreneur is also planned. An agreement
between Argentina's President Néstor Kirchner and Uruguay's
President Tabaré Vázquez in mid-March to lift the bridge
blocks and postpone construction for three months to
evaluate the environmental impact did not lead to a
definitive solution. Argentina wanted to file the case with
the International Court of Justice in The Hague while
Uruguay wanted it to be dealt with under the Mercosur Free
Trade Organization, of which both countries are members.
issue also became domestic politics hot in Argentina after
the government and provincial governor of Misiones in October urged local residents to lift the bridge
blocks in Argentina's diplomatic interest, which they
On March 24, it was the 30th anniversary of the military
coup that began the Argentine military dictatorship 1976-83
and the bloody purging of left-wing activists called the
Dirty War, when at least 18,000, perhaps up to 30,000 people
disappeared and murdered. Army chief Roberto Bendini
expressed his regret over the atrocities and also
acknowledged that the neoliberal economic policy pursued by
the military was a failure for the Argentines to pay for
Economic and political crisis
The economic crisis worsened in 2000, and the new
government that had promised to fight corruption was
embroiled in its own scandal. In September, Vice President
Carlos "Chacho" confirmed Álvarez's rumors that the
government had used funds reserved for the intelligence to
buy political support from a number of MPs in April. the
enactment of a new labor law. The Vice President requested
that those involved be fired, but de la Rúa retained them in
his government. That in October caused the vice president to
The same month, the Senator from the province of Neuquén,
Silvia Sapag, declared that she had been offered money by a
Peronist senator who was also chairman of the Energy
Commission. The money came from oil companies and had to
secure support behind a new oil law. Álvarez requested that
those involved be removed, but de la Rúa transformed his
government, leaving them seated. That in October caused the
vice president to resign.
At the end of 2000, the IMF granted an aid package worth
$ 40 billion. US $ to Argentina to cover the country's
social spending. But the aid package proved inadequate as it
failed to attract foreign private investment. Interest rates
on foreign debt rose and interest rates to the IMF alone
rose to DKK 2.7 billion. US $ annually.
After unsuccessful attempts to revive the economy and
after the country's risk assessment exceeded 800 points,
economist José Luis Machinea resigned in March 2001. The
next day, de la Rúa asked the entire government to resign in
order to carry out a major restructuring. After a failed
attempt to appoint Liberal Ricardo López Murphy as finance
minister, Cavallo was appointed to the post. He declared
that he would cut the government deficit to zero through
cuts, and the Senate passed a law stating that the state
could not spend more than it received, while reducing public
wages and pensions by 13%.
In early December, the IMF declined to grant new loans to
Argentina. The Fund stated that an economic policy combining
government budget deficits with heavy indebtedness and a
fixed exchange rate policy over the dollar was not linked.
It instead required further cuts. Argentina now owed $ 140
billion US $ abroad - equivalent to 54% of the country's GDP
- and as a result of the crisis it had lost $ 19 billion. US
$ in investment.
The currency flight accelerated and led to a number of
temporary interventions. On December 1, a 90-day
intervention was conducted which restricted the export of
currency. Meanwhile, unemployment had risen to 18.3%, and
the discontent led to a general strike that paralyzed the
country and led to Cavallo's resignation.
De la Rúa was now trying to form a national unity
government, but this failed, and on December 20 de la Rúa
himself was forced to resign after extensive demonstrations.
During the demonstrations, supermarkets were looted, so they
were attacked by security forces who shot sharply at the
demonstrators, killing 6 and wounding dozens. At the same
time, hundreds were arrested.
After de la Rúa's resignation, Senate President, peronist
Ramón Puerta was appointed president. He was the next in
succession in the absence of a vice president. Shortly
after, Parliament appointed another Peronist, Adolfo
Rodríguez Saá as President. During his 5 days on the post,
he declared that he would suspend the payment of the foreign
debt and create 1 million new jobs. Rodríguez Saá resigned
on December 30 following pressure from his own party mates.
The post was now taken over by the chairman of the Chamber
of Deputies, the peronist Eduardo Camaño. He again convened
parliament, and this, on January 1, 2002, elected the
peronist Duhalde as president. He was appointed for a term
up to September 2003 and the planned parliamentary elections
in March were canceled.
In the January 2002 Government Gazette, it was announced
that the restrictions on currency transactions would be
extended until 2003. The Argentines only had access to their
money in the banks in quotas. At the same time, the Central
Bank was forced to intervene in the foreign exchange market
to prevent the Argentine peso from collapsing completely.
The protests continued throughout the country, leading to
clashes in banks and at the ATMs. Duhalde had declared in
early January that those who had deposits in US $ would also
have them paid out in dollars. This promise he now broke,
declaring that deposits would only be paid out in devalued
pesos. Bank accounts entered in US $ according to. Danmarks
National bank to $ 44.8 billion US $.
On January 26, a very comprehensive "cacerolazo"
demonstration was held around the pots. Intermediate layer
preferred form of demonstration. The demonstrations targeted
the corruption, currency restrictions and the Supreme Court.
The public dissatisfaction with this trial was primarily due
to the release of ex-President Menem, who had been jailed
for illegal arms trafficking with Croatia and Ecuador.
In February, the Chamber of Deputies' Political
Commission launched a lawsuit against Supreme Court judges
for corruption. After failing to comment on the currency
restrictions for months, the Supreme Court now threatened to
declare them unconstitutional, eventually knowing them
unconstitutional. It was rejected by President Duhalde as an
attempt by the court to avoid himself being brought to
In February, the government removed the link to the
dollar and let it flow. That caused the rate to shoot up to
3 peso/dollar. In April, Finance Minister Jorge Remes
Lenicov failed to get congressional support for his plan
Bonex, which was to convert dollar bills that were converted
into pesos at a rate of 1.4 to five-year government bonds.
Lenicov therefore resigned. He was replaced by Roberto
Lavagna, who began work on a plan to prevent the
uncontrolled devaluation of the peso. Studies show that 14
million Argentinians - just under half the population -
lived in poverty.
After almost a year of difficult negotiations, Lavagna
and the IMF reached an agreement in January 2003. With the
agreement, the IMF accepted that Argentina temporarily
suspend its payments to this and other international lending
institutions. The deal was a victory for the Duhalde
government and Lavagna's negotiating skills, but the IMF's
enthusiasm was more restrained. The IMF characterized it as
a result of extortion and the opposition criticized it for
not providing any long-term solution to the country's debt