Latin American Economies
Latin American Economies
In Latin America, the 1980’s and 1990’s were very difficult times due to the serious economic problems that were occurring throughout the region. Inflation rates jumped sky high and government instability and poor decision making led many countries worldwide to lose faith in investing money and resources in the region, which in turn would cause more problems. These problems were no different in Argentina, which were brought on because of poor economic strategizing and the implementation of a short-term focused plan by their leader Juan Peron and his successors. During this time frame every country in the region was experiencing serious economic problems, but the problems themselves were specific to each country because of the way their economies were established and the way they went about trying to fix them. We will take a closer look at the economic crisis in Argentina by reviewing how they got to this point, the steps they took to try to repair it, the results of these attempts, and finally what was going on with the world economy during this time.
Peron came to power in Argentina shortly after the end of the second world war, which left him and Argentina over a billion dollars from wartime exports mostly associated with Britain (Winn, 2006, 145). This surplus of money gave Peron the opportunity to pay off Argentina’s national debt and because there was still excess money he was able to implement policies that focused more on labor development than on capital, which made him extremely popular not only because more people had jobs but also because these people were making more money than they had before (Winn, 2006, 146). He was trying to establish an economy that had self-sustained growth, which was the main point of his plan of economic autonomy, but his plans more than likely would not have worked without the billion dollars he started with (Winn, 2006, 146-147). Unfortunately, Peron ran out of the money that he inherited when he came to power, which marked the downfall of his reign in Argentina, because he had established poor policies that were not sustainable without this large amount of capital he had from the beginning. He was then exiled for seventeen years, but when he returned he miraculously won re-election and tried to establish a form of economic independence, which put the government in a middle position between capitalism and communism (Winn, 2006, 157). This time around he was unable to convince anyone of the benefits because he did not have the same startup capital he did during his first reign and he died one year into his reelection in 1974, which left Argentina in a “dirty war” (Winn, 2006, 157). This left Argentina under a strict military rule, which over thirty thousand people “disappeared,” and we have previously seen what military rule can do to a country and its people. The reason for this brief history