Argentina

[Sjax]

Any of you know why things have been going so wrong in Argentina. It is supposed to be the most western world minded country in South America and it is bankrupt. On the news today I heard someone talking about civil war. what went wrong??

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[Idnew]

Don't know. Do they have anybody running it? Here we go again, lets blame it on the government their always guilty of something.

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[ogb]

It's all because of the corruption over there. Similar to Brazil. Globalization opponents always claim the injustness that some people in the rich countries own too much money and don't give it to the poor ones. They completely ignore that in the poor countries the financial structures are the real problem. In Argentina and Brazil 2% of the people have 50% of the nation's money. Maybe they should think about it before criticizing the structure in the western countries. As long as this corruption doesn't end, these countries have no chance to survive financially.

[Phreakmeister]

Well, we have certainly gotten 1 thing straight these last few weeks: Argentina is a democracy alright. These revolts are democracy in its purest form.

What went wrong is this:
I think it was in the early 90's, the government decided to link the Argentine peso to the US dollar. They did this in order to reduce the inflation, which sometimes rose to 300% within a week. It did reduce the inflation. An unpleasant side-effect however, turned out to be, that because of the link between the dollar and the peso, the prices of Argentine products abroad rose. Argentine products became more expensive in other countries. This way, their export revenues dropped.

It is up to psychologists and other experts to discuss the motivations behind these actions, but what was the direct cause for the economic crisis, was this.

Some time ago, I heard that the Argentinean government wants to link the peso to the euro. Are there any economists in here, who can explain if that will make a change?

[This message has been edited by Phreakmeister (edited February 04, 2002).]

phreak is right.
Laso, the American economy has had a slight recession recently and i cant help but think that the pegging of the dollar has some how caused this to have a large effect on the argentinia economy

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