Argentina — Doing Business in a Changing Environment

Abstract

During the 1990s, Argentina opened up its economy to world trade and international capital. The implementation of privatization programmes, deregulation and private sector investments were common features on the Argentine economic agenda during the first part of the 1990s — all this in a context of very low inflation and foreign exchange stability provided by the peg of the local currency (the “Peso”) to the US Dollar. However, during the second part of the decade, this was overshadowed by the federal government fiscal deficit, a growing recession, higher unemployment and a huge increase in the external debt, in an international context of financial unrest based on the Asian, Russian and Brazilian financial crises. By the end of 2001, the political crisis triggered off an unprecedented economic and social situation.