Rise and Collapse of Neoliberalism in Argentina

Abstract

The present crisis in Argentina, the worst crisis in Argentine history that reached rock-bottom levels in 2001-2, can be considered a crisis of neoliberalism, particularly of the severe structural adjustments applied in the 1990s and the beginning of the new millennium under the Menem and De la Rúa administrations. It was in this period that wholesale privatizations, deregulations of all kinds including those tending to the fully-fledged ‘flexibilization’ of labor markets, and an indiscriminate ‘opening’ to the world economy took place. This was also the period in which the foreign debt continued, increasing substantially until the recent default became inevitable. This article analyzes the way economic policy systematically favored the various large economic conglomerates operating in Argentina. In agro-industry, petroleum, telecommunication, electricity, water, and banking, both large national and transnational conglomerates were favored by measures related to structural adjustment programs of successive governments. In the midst of the present crisis these large conglomerates or grupos económicos are once again showing their muscle, pressuring the government to pay the foreign debt, increase public rates, compensate the banks for their losses due to capital flight, etc. In effect, the crisis itself shows the bare anatomy of the economic structure in which these large conglomerates reign supreme while being increasingly contested by numerous popular organizations of civil society.