Argentina: History

Pre-20th-Century History

Pre-Columbian Argentina was farmed by sedentary Indian groups such as the Diaguita and used as a hunting ground by nomads. Indian resistance inhibited Spanish incursions and discouraged Spanish settlement. Buenos Aires was not successfully established until 1580, and remained a backwater for 200 years. A declining and unevenly distributed Indian population, which could not be milked for its labor, led to the creation of huge cattle ranches, known as haciendas - the genesis of the legendary gaucho (cowboy) and the source of great wealth for a lucky few.

Buenos Aires became the capital of the new Viceroyalty of the Río de la Plata in 1776, acknowledgment that the region had outgrown Spain's political and economic domination. However, continuing dissatisfaction with Spanish interference led to the revolution of May 25, 1810, and eventual independence in 1816. Independence revealed the seething regional disparities which Spanish rule had obscured. The Federalists of the interior (conservative landowners, supported by the gauchos and the rural working class) advocated provincial autonomy, while the Unitarists of Buenos Aires (cosmopolitan city dwellers who welcomed the injection of European capital, immigrants and ideas) upheld Buenos Aires' central authority. After a disastrous and tyrannical period of rule by the nominally Federalist Juan Manuel Rosas, Buenos Aires and Unitarism prevailed, ushering in a new era of growth and prosperity with the Unitarist constitution of 1853.

European immigration, foreign investment and trade were hallmarks of the new liberalism. However, excessive foreign interests made the economy particularly vulnerable to world economic downturns; wealth was concentrated in the hands of very few, unemployment rose as smallholdings failed, and farmers were forced to leave the land and head for the cities.

Modern History

The beginning of the 20th century saw increasingly weak civilian rule and economic failure, leading to a military coup in 1943 which paved the way for dictator Juan Perón. An obscure colonel with a minor post in the labor ministry, he won the presidency in 1946 and again in 1952. With his equally popular wife Eva, he instituted a stringent economic program which stressed domestic industrialization and self-determination. He was ousted in 1955 and banished to Spain; this initiated almost 30 years of disastrous military rule. Perón returned to rule briefly in 1973; he died in office in 1974, bequeathing power to his third wife, Isabel. Her government fell in 1976, and the new military government instituted a reign of terror - the Dirty War - until 1983; paramilitary death squads crushed government opposition and up to 30,000 people 'disappeared'.

This internal conflict came to an end when Argentina seized the British-controlled Falkland Islands (Malvinas to the Argentinians); Britain declared war and eventually won them back. Ownership, however, remains disputed.

This failure helped end military rule, and the country returned to the 1853 constitution. Carlos Menem instituted major economic changes, pegging the peso one-to-one with the US dollar in 1991, which reduced inflation from 5000% in 1989 to 1% in 1997.

Fernando de la Rua, elected in 1999, promised a crackdown on corruption, and tough fiscal measures to balance Argentina's budget. But austere plans prompted nationwide strikes and demonstrations, which grew violent after the government instituted harsh restrictions on bank withdrawals. Argentina plunged into economic and political turmoil in December 2001 when it defaulted on a 132 billion US dollar loan repayment - the largest default in history.

On January 1, 2002, Eduardo Duhalde became president. A staunch Perónist, Duhalde took a populist and protectionist stance by unpegging the peso from the dollar, which caused the peso to lose almost 70% of its value.

Recent History

In 2003, Néstor Kirchner - a little-known governor of a Patagonian province - became president with only 22% of the vote. His hard-nosed fighting suspended Argentina's debt to the IMF in 2004, which led to better terms. In 2006, the country paid off its entire IMF debt (debts to private investors, however, are still in the billions of dollars). Kirchner's popularity rating soared. In the last three years, Argentina's economy has made an astounding comeback and is growing 8% annually. Foreign investment is slowly returning, exports are surging and poverty is being reduced, though inflation continues to hang in the background.

Although social unrest has for the most part eased, Argentina's journey out of this financial pit is long and perilous. However, it's off to a promising start, and with the adaptability and resilience of the Argentine people, the future is looking brighter every day.

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