Academic journal article Law and Policy in International Business

The Selling of Argentina: Is the Path to the First World Privatized?

Academic journal article Law and Policy in International Business

The Selling of Argentina: Is the Path to the First World Privatized?

Article excerpt

I. Introduction

Since the beginning of the twentieth century, when Argentina was flooded by thousands of European immigrants, Argentines have identified more with their European ancestors than with their Latin American neighbors. The Argentine population is nearly eighty percent urban and ninety-five percent literate, and over ninety percent of its 30.7 million inhabitants are considered "white."(2) The country has a temperate climate, is rich in natural resources, and has fertile land and vast oil and gas holdings.(3) All of these characteristics lead most Argentines to consider Argentina superior to and distinct from other Latin American countries.(4) politically and economically, however, Argentina's recent history has emphasized its similarities to other Latin American countries, such as Uruguay, Brazil, and Chile, which have experienced hyperinflation, military dictatorship, and labor and civil unrest. What happened to this nation, which at the beginning of the century was one of the richest countries in the world?(5)

Argentina, perhaps more than any other nation, has failed to live up to its potential. How did a country with such vast natural resources fall into political and economic decay? Has Argentina's current plan of economic revitalization been successful? Can Argentina regain its "First World" position through privatization of national industries? This Note will examine the current Argentine president's plan to privatize national industries and consider whether it has worked to further Argentina's economic development. Part II will briefly review twentieth century Argentine history to provide a background for the country's current crises and successes. Parts III and IV will then examine the nature of President Menem's plan for the privatization of national industries. Finally, Part V will discuss the impact the plan has had on the Argentine economy.

II. Historical Background

From the 1850s through the beginning of World War I, Argentina experienced major social and economic transformations resulting from a large influx of European immigrants. The national census of 1914 recorded over seven million inhabitants of Argentina, of which one-third were foreign born.(6) This rapid demographic increase resulted in increased production throughout the country, at a time when there was an increased demand for Argentine agricultural products in the world market.(7) The increased supply of workers coupled with the increased demand for Argentine goods caused Argentine export revenues to increase from one billion dollars in 1886 to fifteen billion dollars in 1914.(8)

Politically, the country was dominated by a small group of wealthy, conservative elites. This oligopoly ruled the country until 1916,(9) when Hipolito Yrigoyen of the Union Civica Radical (UCR) won the elections.(10) The UCR was the first Argentine mass movement of the twentieth century and was composed primarily of the former middle class of independent farmers and the new immigrant, industrial middle class.(11) In 1930, Yrigoyen, unable to pull Argentina out of the disastrous Great Depression, resigned, and his successor, Vice President Martinez, was overthrown by the Argentine armed forces.(12) The military coup d'etat of 1930 marked the beginning of a long series of military interventions that have marked Argentine politics throughout the twentieth century.(13) The period from 1930 to 1943 was characterized by electoral fraud, the exclusion of the UCR from the electoral process, and an increasing military presence in politics. During that thirteen-year period, Argentina had five different presidents, only two of whom were elected.(14) In 1943, there was another military coup, shortly followed by three more coups d'etat and three new leaders.(15)

Elections were finally held again in February 1946,(16) and Juan Peron, the leader of the new Peronist political mass movement, was elected president. …

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