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. According to CountryAAH, major public holidays in Argentina include Independence Day (July 9) and New Year (January 1). The 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 refused.
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 today.
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 withdraw.
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 trial.
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 problems.