Argentina's Capitalist Revolution Revisited

In 1989 Argentine president Carlos Saul Menem launched a capitalist revolution that has made this large South American country a model among modern states trying to shift from statist stagnation to free-market growth. During the late nineteenth and early twentieth centuries, Argentine development was on a par with that of the United States. But during the 1930s a populist statism emerged that was institutionalized during the late 1940s by Juan Domingo Peron and thereafter contributed to a decades-long decline that dumped Argentina from the seventh-richest country in the world to the seventy-seventh. When Menem took over in 1989, annual inflation was almost 5,000 percent and the economy was in chaos. Menem and his minister of economy, Domingo Cavallo, have reorganized and restructured the economy by balancing the budget, stabilizing the currency, selling off unprofitable state-owned enterprises, and generally throwing Argentina into the world economy. In 1993 the government began trying to coordinate and make better use of the limited federal and provincial funds available for health, education, and other social programs. These reforms have brought to the surface and sought to deal with social problems created largely by previous leaders and policies. They seek to help individuals and communities improve their conditions through assisted self-help, to reduce inefficiency and corruption, and to coordinate and monitor government expenditures. The thrust of the program is correct, though it is too early to judge its effectiveness or to expect it to have a significant immediate impact on Argentine politics.