Former President Menem Who Revived Argentina's Economy Passes Away

Published 15 Feb.2021 11:18(KST)

Stabilized 5000% Hyperinflation
But Sudden Neoliberalism Introduction Side Effects

[Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Carlos Menem, former president of Argentina who saved his country's economy from hyperinflation through neoliberal policies, passed away on the 14th (local time) at the age of 90.

According to the Associated Press, former President Menem died while receiving inpatient treatment at a hospital in Buenos Aires on the same day. It was reported that his health had recently deteriorated. Alberto Fernandez, President of Argentina, declared a three-day national mourning period.

Born into a family of Syrian immigrants, former President Menem was a lawyer-turned-politician who ran as the Peronist Party candidate, a left-wing populist, in the 1989 presidential election and served as president until 1999.

Although a left-wing Peronist, he implemented neoliberal policies after taking office. He carried out large-scale privatization of state-owned enterprises, abolished price control policies, and worked to attract foreign investment. He introduced a peg system fixing the peso to the dollar at a 1:1 exchange rate.

As a result, he stabilized inflation, which had approached 5000% annually, to single digits and revived Argentina's economy, which was in a critical state. Diplomatically, he strengthened relations with the United States and restored diplomatic ties with the United Kingdom, which had been severed since the 1982 Falklands War.

However, in the latter part of his administration, the side effects of rapid neoliberal implementation appeared. The gap between rich and poor widened, unemployment soared, and foreign debt continued to increase. The peg system failed to respond efficiently to global economic fluctuations.

Argentina's economic crisis led to a massive debt default in 2001. Toward the end of his term, he was embroiled in corruption scandals including embezzlement and faced allegations of illegal arms exports.