by GREG MILLS
There is arguably no place more emblematic in Argentina than the Plaza de Mayo, the city’s independence square. At the one end is the seat of government, Casa Rosada, the “Pink House” with the balcony from which Eva Peron famously did her thing. On one side of the white obelisk independence memorial fly various banners railing against the government and proclaiming solidarity with the “disappeared” — the 10 000 or so people who were killed by security forces during the bitter civil war in the mid to late Seventies, and other victims of war.
Claiming to be a Peronist remains the most likely route to the Casa Rosada and, after the failure of the last non-Peronist government of Fernando de la Rúa in December 2001, perhaps the only probable one.
The story of Argentina since 1945 has been of a cyclical nature: crisis followed by austerity and then boom, and once more bust and recovery. For example, following the last military junta, which collapsed in the aftermath of the Falklands-Malvinas war in 1982, the government of Raúl Alfonsin (1983-1989) encountered hyperinflation as it tried to tackle a debt problem. The economy shrank by 7% that year, with per capita gross domestic product falling to its lowest level since 1964.
Alfonsin was followed by Carlos Menem, another to claim a Peronist label. The first of his two terms as president is generally regarded as the most successful, the second being characterised more by corruption allegations and less by reform.
During Menem’s first term his finance minister, Domingo Cavallo, introduced a series of reforms in 1991. These included pegging the value of the peso to the United States dollar one to one in a “convertibility” plan to end runaway inflation. Pegging should have been a short-term measure to establish a new framework for investment and growth. Instead, because the peg was politically popular, it went on for a decade, swelling debt as a way of increasing consumption. This is not unlike what is happening in southern Europe today.
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