• Argentina’s political upheavel in 2001 led to the resignation of President Fernando de la Rua.

• Before 1930, 70 years of political stability facilitated rapid economic development and made Argentina one of the wealthiest countries.

• In 1943, the military intervened, a colonel serving as Secretary of Labor, Juan Peron, took over the country.

• Peron’s mobilization of the working class had an effect on Argentina’s political system over the next four decades.

• He was ousted in 1955, he spent 18 years in exile. A year after his return he died and his second wife took over, with little political experience.

• There was political and economic chaos, political violence surged and Argentina experienced its first bout with hyperinflation.

• The military intervened again in 1976, and ruled until 1983, when it fell into disrepute after the failure of the Falkland Islands war with Great Britain in 1982.

• In 1983, civilian democratic rule returned with the election of Raul Alfonsin, a moderate Radical Civic Union(UCR).

• Because of chaotic economic conditions with hyperinflation and labor unrest, he left office six months before his six-year term ended.

• 1989 election winner, Carlos Menem of the Justicialist Party (PJ, or the Peronist Party), took office early.

• Menem transformed Argentina from a state-dominated protectionist economy into on committed to free market principles and open to free trade.

• Hyperinflation was eliminated; and the economy was opened up to foreign trade and investment.

• Fernando de la Rua won in October 1999 because of high unemployment and government corruption towards the end of Menem’s second term.

• In 2001 Argentina was unable to produce a balance budget. Argentina’s began withdrawing dollars from the bank. The government put a limitation of $1,000.00 per month that could be drawn.

• Denial of bank funds, combined with high poverty and unemployment rates after four years of recession, sparked widespread opposition to the government.

• President de la Rua fled the presidential palace and resigned in 2001. Peronist Senator Eduardo Duhalde became president on January 1, 2002.

• Argentina’s economy stabilized under Duhalde’s government.

• Governor Nestor Kirchner, a center-left Peronist, was inaugurated to a four-year term.

• Kirchner’s policies in human rights, instutional reform, and economic policy have helped restore Argentines’ faith in government.

Relations have been strong since the return of democracy in 1983.

In 1997, the U.S. designated Argentina as a major non-NATO ally, because of its military contributions.

Tough U.S. approach towards Argentina during its political and financial crisis in 20014-2001 caused some friction in the relationship.

In 2003 the U.S. supported Argentina in its negotiations with the IMF, this turned some of the friction.

The U.S. exported $4.1 billion in goods to Argentina in 2005 (machinery, organic chemicals, and electrical machinery topping the list).

The U.S. imported $4.6 billion in goods, almost half consisted of oil imports.

U.S. officials have concerns about the tri-border area (TBA) of Argentina, Brazil, and Paraguay because of activities of the radical Lebanon-based Hezbollah (Party of God) and the Sunni Muslim Palestinian group Hamas (Islamic Resistance Movement).

TBA has been long used for arms and drug trafficking, contraband smuggling, document and currency fraud, money laundering, and the manufacture and movement of pirated goods.

The U.S. is concerned that Hezbollah and Hamas were raising funds among the Muslim communities in the region but stated that there was no corroborated information that these or other Islamic extremist groups had a presence in the area.

In 2006, a U.S. Treasury Department official maintained that Argentina could risk international financial isolation if it did not take action to criminalize terrorist financing.

ARGENTINA’S POLITICAL PARTIES

• Multi-party system with two or three strong political parties or alliances, and many smaller parties.

• Justicialist Party – the strongest party. It is also known as the Peronist party.

• The party’s platform is centered around populism. Peron ordered mass nationalization of public services, strategic industries, and the farm export sector, while enacting progressive labor laws and social reforms.

• Favors technical schools, and promoted urbanization as it raised taxes of the agrarian sector.

• Radical Civic Union – positions on issues range from liberal to social democratic. Is a member of the Socialist International.

• Founded by radical liberals, it is the oldest political party.

• A spin-off of the Civic Union.

• Socialist Party – a social-democratic party. Divided into the radical Argentine Socialist Party and the moderate Democratic Party. The remaining of the PSA formed the Popular Socialist Party.

• Republican Proposal – a centre-right electorial alliance. Referred to as PRO. Principally an alliance between commitment to change and Recreate for Growth parties.

SOURCES

CRS Report for Congress – October 12, 2006

Wikipedia

Google Images