Analysis Of Carlos Menem’s Presidency Strategies
Twice elected president of Argentina, Carlos Menem is one of the most recognized politicians of last decade. His party remained a significant force in Argentina. When Carlos Menem began his presidency, Argentina was in the control of accelerating inflation rate and recession. Menem’s ideology was more towards privatization of several state owned properties. As result of all these privatizations, new actors like national and international banks, companies and shareholders emerged as the new powerful players in economic and political terms. The banking system was restructured with the increased participation of foreign banks by taking control over local banks. The labour market was also transformed with the implementation of new policies like labour contracts with fewer restrictions on dismissal and less taxes, labour contracts for one or two years without any obligation to pay compensation at the end of the contract.
New policies helped the agricultural sector to get access to local credit, machinery and agro chemical products but the most important measures was the suspension of export taxes in 1991 which boosted the earnings along with increasing prices. Due to this, small producers sold land to large land firms which finally resulted in an exit from rural to urban areas and making them unemployed there due to their low level of education and skill. On the other hand the industrial sector has mixed response to new policies. Large companies having access to foreign capital adopted expanses policies based on exploitation of raw materials. So large firms like metallurgical branches increased their production. Another groups of companies like SME’s had to face stiff competition. So in order to make profits, they had to decrease the workforce and replace the local production with imported inputs or sometimes these firms were closed down or bought out by larger enterprises. All these trends shows that large companies increased their efficiency while the SME’s that were once the core of industrial sector continued to lack access to technology, credit and market information which finally lead to increase in unemployment.
Carlos Menem’s cabinet also includes businessmen as he wanted to generate more revenues from greater industries and have the ease to implement his policies to the grasshood level. During december 1989 Argentina fell into hyperinflation and in march 1991 introduced its convertibility program which was an initiative to improve ploicy credibilityand to establish macroeconimic stability. As like India’s centralized and economic Five-year Plans, Argentina also in the second half of 1946 began to prepare a plan of government for the five-year period from 1947 to 1951. The first plan consists of establishing a custom procedure for import and export of goods. It was proposed to unifyin eachoffice those functions under the direction, coordination of central body.
Second Five Year Plan of Argentina (1956-61) was based on encouraging the growth of the heavy industry. President Peron primarily focused on foreign investment. Their main targets were to increase foreign investment, growth of heavy industry, remove most of the subsidies and industrial loans. After 1961 Peron government lose the power and the new government did not find this five year plan more productive for the country and they came up with different policies and schemes.
