What Happened in Argentina, Like Our Cousin on the Economy

Talking about the economic situation is quite common among Argentines. in Buenos Aires even children knows what the dollar rate, the level of inflation means. Just like us!

Argentina in the early 20th century one of the richest countries in the worldeven surpassed France and Italy. The country’s economic performance has declined for a variety of reasons and has exhibited severe imbalances, particularly since the late 20th century.

The Argentine peso was the second most depreciated currency against the dollar in 2021. Guess which currency is the first by far ahead of it?

So how did Argentina end up in this situation and now what is going on in the country? Argentina, one of the richest countries in the world a hundred years ago, has experienced an annual average inflation of 105% since then and had to change its currency 5 times.

It was the only country that fell from the developed countries class to the developing countries class. Argentina’s economy in 2021, again high devaluation with inflation in the middle of his curse.

While inflation has plagued the country for a long time, it has become a more acute problem in the last few years.

Former President Mauricio Macri dollar with pesos kept the price close to each other. But after the right-wing Macri lost to left-wing Alberto Fernandez in 2020, the price of the peso rose sharply. Thus, Argentina closed the highest inflation levels of the last 30 years.

The Argentine government has faced challenges in tackling high levels of poverty and unemployment, and nearly half of the national workforce is thought to be employed in the informal sector.

Leftist Fernandez 65 billion dollars successfully restructured foreign debt.

Inflation is high in the country, and the peso continues to lose value.

Argentina’s Central Bank reserves are under $3 billion. The macroeconomic outlook is worrying. 95% of the economy in Argentina is managed with a parallel exchange rate. Whatever you want to buy, from textiles to household goods, from food to technological products, is paid in exchange for the exchange rate. So if you buy a game with a credit card at a tech store, you pay it in pesos for the dollar rate. in Argentina today 1 dollar 102.37 pesos around.

The country has social unrest, closed schools, packed hospitals, cabinet disputes and a deteriorating business climate.

About 70% of intensive care beds are full. While the proportion of people living in poverty was 26% in 2017, it is now It’s up to 42%. According to the World Bank, although inflation fell slightly in 2020, it was still above 40%.

Argentina is a country that has never been able to complete its political process. Wrong and populist policies brought problems by themselves (as we see examples in almost every period…)

Solutions that did not appeal to the long-term, instability in power gave impetus to this economic collapse.

It is necessary to go further back for the beginning of the collapse. After the Second World War, after the successive coups, Juan Peron seized power with another coup. During this period the country Peronist Populism managed by a process called During this period, military coups took place frequently.

The real critical process started with the overthrow of Peron. With another coup, the administration changed hands again.

The incoming military junta administration was in this process. It prepared the end of Argentina. An oppressive rule began in the country. Parliament, political parties, trade unions were closed. It opened incurable wounds in the country and this situation cost the future of the whole country.

First in the country under the military junta 30,000 people There was a time when it disappeared. Many dissidents have been eliminated, there are various strong theories about the death of these people. Some of these theories are; that people’s corpses are thrown into the oceans, from helicopters to the ground from high distances.

The people of Argentina still lament this period. The biggest mistake made by the military junta administration was the struggle against England in 1982: Falklands War.

located near Argentina Falklands There are many islands called These islands are a strategically important British overseas territory from the British colonial era. In addition to the geopolitical position of the islands, it is very rich in oil and underground mining.

Argentina landed on these lands in 1982. An official agreement between the two countries, which lasted for 6 weeks, was followed by the UK’s response with a military action. war took place. With the surrender of the Argentine side, the war ended in an absolute British victory.

After the war, against Argentina from many countries, especially the USA and England. embargoes were placed. Argentina’s economy collapsed during this period. With the last point of money printing, inflation rates rose to 5000%.

The military junta handed over the administration back to civilians in 1983. Thus, democracy reigned in the country again: The Era of Carlos Menem

El Turco Carlos Menem, nicknamed, of Syrian origin (who immigrated to Latin America as Ottoman subjects at the beginning of the last century, is called “El Turco” in this continent), Carlos Menem was elected president of Argentina for a period of 10 years. During his tenure, he came to the fore many times for allegedly taking bribes from global companies.

Carlos Menem, in order to make improvements in his tenure in a short time, to show strength to his people, all of Argentina’s privatized public institutions. There was even a 7% growth in this period.

However, although this privatization policy, which is an instant solution, showed benefits in a short time, the Argentine state became unable to generate any income from public institutions in the long run. The Argentine economy, which has no income from public institutions and cannot receive new investments decline in economy continued to live.

Corruption, wrong policies, global crises caused a deep crisis in 2001 in Argentina, which was already in need of hot money.

The crisis, which also caused widespread protests in the country, affected the Argentine economy. caused a bankruptcy. The economic model, in which the government tried to be more interventionist, remained very limited. In this process, Argentina, which experienced political instability, was dragged into intense poverty with its entire population.

The problem of heavy unemployment has emerged in the country and in many places strikes began. Argentina repeatedly asked for loans from the IMF during this period. Foreign debts swept the Argentine economy.

When the politicians remained a spectator to this situation and did not give a fight, the collapse continued, gaining momentum like an avalanche.

The poverty experienced by the Argentine people, the records in unemployment, inflation rates, the increase in foreign debts, the inability of the country’s income to meet the expenses are no longer has reached an unavoidable level.

Although the IMF implements its policies to the letter, the Argentine economy can never be he can’t breathe. Argentina, which has experienced two serious economic crises as recently as 2018, is now close to completely losing its international image.

In summary; The state of the Argentine people and the recent political history of Argentina are giving a lesson to the world.

Argentina is a secular, federal constitutional republic, currently dominated by a presidential system. Timely coups, embargoes, political strife Because of this, he still suffers from that period. In 2001, they grappled with a crisis like ours.

Last month, the minimum wage in Argentina increased by close to 50%, as in our case, but despite the increase, salaries are decreasing rapidly due to inflation. Again, like us, they will go to the elections in 2023. It can be said that we share a very similar fate.

Sources: Independent Turkish, 21st Century Turkey Institute, Wikipedia, Ministry of Foreign Affairs of the Republic of Turkey, BBC, DergiPark, Legislation Magazine, ResearchGate, Forbes, Reuters