The Detrimental Effects Of Neoliberalism In Argentina

Since around the late 1800s, Latin America as a whole has displayed different economic trends shared by several countries. One of the most recent of these trends is neoliberalism, which can be defined as renewed ideas of free market and reduced state intervention in the economy. Argentina was one of the countries that adopted policies reflecting neoliberal ideals, starting in the late 1970s. Neoliberalism in general cannot be characterized as effective or harmful, since it relies on several individual factors. However, negative social and economic changes during the latter years of the twentieth century have proven that neoliberalism had a detrimental impact on the Argentine Republic. Thoroughly understanding the effects of neoliberal
This iron hand is very clearly seen during the “Dirty War,” when a series of atrocities was carried out by the regime on its adversaries. During this time, the military-led regime arrested dissenters with no legal justification and was responsible for up to 20,000 disappearances (Skidmore 259). The vast majority of those who disappeared were never seen again. Because they were carried out in order to eliminate those opposed capitalist ideals, the government’s unjust actions serve as early evidence that neoliberalism negatively impacted Argentina. Another sector of society affected by the military regime’s new policies was manufacturing companies and workers. Videla’s military adjusted the government so that it favored agro-industry instead of other industries, such as manufacturing. This shift in focus lead to industrial production decreasing by 17% which caused employment in industrial settings to go down by over 36% between the year 1975 and 1981 (Cooney 12). Such a high decrease in employment affected many Argentine workers, and the decline in industrial production put the country at a disadvantage since it is such a vital aspect in order to compete globally. From a larger economic scale, these neoliberal reforms along with continued acceptance of IMF loans lead to a massive increase in foreign debt. According to the Ministry of Economy, foreign debt
Menem is often described as a Peronist with anti-Peronist ideals. This is due to the fact that Menem deepened Argentina’s commitment to neoliberalism, while Peronism’s “sworn enemies were liberalism [and] capitalism” (Zanatta 2). Menem’s administration brought about many neoliberal reforms with the hopes of improving the country’s poor state. One of his major reforms was the privatization of many state-owned companies. Among the list of privatized industries were telecommunications, airlines, electricity, coal, natural gas, subways, and shipping (Skidmore et al. 263). Privatization is a basic component of the neoliberal economic model. Menem’s economics minister Domingo Cavallo, introduced policies that formed a one-to-one ratio for the exchange rate between the United States dollar and the Argentine peso. These two drastic reforms along with several others by Menem and Cavallo helped to stimulate growth and stabilize the economy. At one point, inflation was reduced to less than 1% (Skidmore et al.