Argentina And The Imf Essay

2906 words - 12 pages

Argentina, the IMF, and the WTO
In 1999, over 40,000 people came to protest in the streets outside the Seattle Conference Center, where the delegates from the World Trade Organization (WTO) and the International Monetary Fund (IMF) came to Seattle to discuss new international trade agreements. Many came to protest not only against the WTO and the IMF, but also against globalization itself; Thousands were protesting for anti-globalization because of increasing concerns that certain trade and investment measures were encroaching on national sovereignty. Everyone feared that too much power was being centralized into organizations like the WTO and the IMF. Other reasons included the widening gap between the rich and the poor; the creation of a harsher working conditions for women, children, and the disabled; the inequality of pay between men and women; how a boom in stock prices impoverished thousands, especially the poor and people of color , and that social welfare, health, and education benefits had been lessened significantly. To many protestors, the Battle of Seattle was seen as a victory, as the event sparked many new discussions of anti-globalization. It made people discuss why there was so much outcry against these huge international banks, and so it brought several important issues concerning globalization to the forefront of everyday conversation. However, anti-globalization was not focused solely in the US. While protestors in Seattle were battling for better lives, Argentina was going through its own kind of battle. From 1998 to 2001, Argentina went through one of the worst economic recessions in all of its history. In the space of three years, the economy shrunk by 28%, and unemployment was up to 53% in 2001 . This particular recession is known as “The Argentine Paradox”, to describe the nature of how this economic crisis has left many confused as to how it could have happened, considering Argentina’s large middle class and social stability at the time. There is no definite answer as to why Argentina went into such an economic crisis, but looking at its tumultuous history gives clues and possible causes that could have contributed. When Argentina first gained independence from Spain, all of the provinces fought each other until a very tenuous democracy was formed in 1860. Along with a considerably shaky government, economic policies generally caused more harm than good. At the time budget deficits were handled by printing more money, so inflation was a constant issue that still continues to affect Argentina to this day. In the late 1800s and early 1900s, Argentina’s economy began to increase, due to rising exports of beef and wheat to Europe, made possible by the new technologies of railroads and refrigerator ships. During the 1930s, when Argentina was going through difficulties with its trading partners, it switched its economy to an “import substitution” economy—a “largely closed, self-sufficient economy, with high tariffs and...

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