Fernando de la Rúa
De la Rua left a center left coalition to win elections after Carlos Menem left Argentina in a very critical situation with several public corruption scandals. Right from the beginning, he faced fierce opposition from the Peronists, who called for a suspension of payments on the nation’s $ 132 billion dollars foreign debt.
Decline
- De La Rua tried to reduce the government budget deficit by cutting public sector spending and wages.
- These measures, along with his constant refusal to devaluate the peso against the dollar, brought a limitation on the country’s ability to increase exports.
- Unemployment was on the rise and living standards lowered significantly.
Corralito
For a period of time, Argentine citizens could only withdraw up to $250 per week from their bank accounts, a measure that publicly irritated many people. The government wanted to stop individuals and businesses from sending millions of dollars to foreign banks and other financial institutions. In other words, citizens were extracting as much money as they could because they were afraid that if they left it at national banks, they would not be able to have access to it during the crisis, if necessary. This is commonly known as the 'corralito', for the meaning of the word in spanish.
Conditions worsened for Argentineans, a third of the population lived below the poverty line, official unemployment rose to almost 20% and another 15% of workers were ‘underemployed’. As part of a zero deficit budget plan, the government reduced public sector wages and pensions by 13%. Later, de La Rua used part of the money destined to state pension funds ($3.5 billion) to make a payment on the external debt, a move that translated to delayed benefits for approximately 1.4 million retirees and their families. The Argentine people could not hold any longer. Several major public demonstrations occurred in matter of days, resulting in clashes with the police and even civilian casualties. President de La Rua resigned on December 21st.
Sources
Introduction | Dictatorship | Raúl Alfonsín | Carlos Menem
Interim Presidents | Néstor Kirchner | Graphs | Final Analysis
