Carlos Menem
Carlos Saúl Menem was an Argentine politician who served as the president of Argentina for ten years, from 1989 to 1999. He identified as Peronist, serving as President of the Justicialist Party for 13 years, and his political approach became known as Menemism.
Born in Anillaco, La Rioja, to a Syrian family, Menem was raised as a Muslim, but later converted to Roman Catholicism to pursue a political career. Menem became a Peronist during a visit to Buenos Aires. He was elected governor of La Rioja in 1973, deposed and detained following the 1976 Argentine coup d'état, and re-elected in 1983. He defeated the Buenos Aires governor Antonio Cafiero in the primary elections for the 1989 presidential elections. Hyperinflation and riots forced outgoing president Raúl Alfonsín to resign early, shortening the presidential transition.
Menem's presidency supported the Washington Consensus and tackled inflation with the Convertibility plan in 1991. The plan was complemented by a series of privatizations and was initially a success. Argentina re-established diplomatic relations with the United Kingdom, suspended since the 1982 Falklands War, and aligned itself with the United States. Under his administration, the country participated in the 1991 Gulf War and suffered two terrorist attacks: an attack on the Israeli embassy in 1992 and the 1994 AMIA bombing. The Peronist victory in the 1993 midterm elections allowed him to persuade Alfonsín, by then leader of the opposition party Radical Civic Union, to sign the Pact of Olivos for the 1994 amendment of the Argentine Constitution. This amendment allowed Menem to run for re-election in 1995, winning a second, four-year term. A new economic crisis began, and the opposing parties formed a political coalition, winning the 1997 midterm elections and the 1999 presidential election.
Menem was investigated on various criminal and corruption charges, including illegal arms trafficking, embezzlement of public funds, extortion and bribery. His position as senator earned him immunity from incarceration.
Menem ran for the presidency again in 2003, but faced with a likely defeat in a ballotage against Néstor Kirchner, he chose to pull out, effectively handing the presidency to Kirchner. He was elected senator for La Rioja in 2005. By the time he died in 2021 at age 90, he was the oldest living former Argentine president. He is regarded as a polarizing figure in Argentina, mostly due to corruption and economic mismanagement throughout his presidency.
Early life and education
Carlos Saúl Menem was born on 2 July 1930 in Anillaco, a small town in the mountainous north of La Rioja Province, Argentina. His parents, Saúl Menem and Mohibe Akil, were Syrian nationals from Yabroud who had emigrated to Argentina. He attended elementary and high school in La Rioja, and joined a basketball team during his university studies. He visited Buenos Aires in 1951 with the team, and met the president Juan Perón and his wife Eva Perón. This influenced Menem to become a Peronist. He studied law at the National University of Córdoba, graduating in 1955.After President Juan Perón's overthrow in 1955, Menem was briefly incarcerated. He later joined the successor to the Peronist Party, the Justicialist Party . He was elected president of its La Rioja Province chapter in 1973. In that capacity, he was included in the flight to Spain that brought Perón back to Argentina after his long exile. According to the Peronist politician Juan Manuel Abal Medina, Menem played no special part in the event.
Governor of La Rioja
1st term (1973–1976) and arrest
Menem was elected governor of La Rioja in 1973 when the proscription of Peronism was lifted. He was deposed during the 1976 Argentine coup d'état that overthrew President Isabel Perón. He was accused of corruption and having links with the guerrillas of the Dirty War. He was detained on 25 March, kept for a week at a local barracks, and then moved to a temporary prison on the ship 33 Orientales in Buenos Aires. He was detained alongside former ministers Antonio Cafiero, Jorge Alberto Taina, Miguel Unamuno, José Deheza, and Pedro Arrighi, the unionists Jorge Triaca, Diego Ibáñez, and Lorenzo Miguel, the diplomat Jorge Vázquez, the journalist Osvaldo Papaleo, and the former president Raúl Lastiri. He shared a cell with Pedro Eladio Vázquez, Juan Perón's personal physician. During this time he helped the chaplain Lorenzo Lavalle, despite still being a Muslim. In July he was sent to Magdalena, to a permanent prison. His wife Zulema visited him every week, but rejected his conversion to Roman Catholicism. His mother died during the time he was a prisoner, and dictator Jorge Rafael Videla denied his request to attend her funeral. He was released on 29 July 1978, on the condition that he live in a city outside his home province without leaving it. He settled in Mar del Plata.Menem met Admiral Eduardo Massera, who intended to run for president, and had public meetings with personalities such as Carlos Monzón, Susana Giménez, and Alberto Olmedo. As a result, he was forced to reside in another city, Tandil. He had to report daily to Chief of Police Hugo Zamora. This forced residence was lifted in February 1980. He returned to Buenos Aires, and then to La Rioja. He resumed his political activities, despite the prohibition, and was detained again. His new forced residence was in Las Lomitas in the province of Formosa. He was one of the last politicians to be released from prison by the National Reorganization Process.
2nd and 3rd terms (1983–1989)
Military rule ended in 1983, and the Radical Raúl Alfonsín was elected president. Menem ran for governor again and was elected by a clear margin. The province benefited from tax regulations established by the military, which allowed increased industrial growth. His party gained control of the provincial legislature, and he was re-elected in 1987 with 63% of the vote. The Partido Justicialista at the time was divided into two factions, the conservatives that still supported the political doctrines of Juan and Isabel Perón, and those who proposed a renovation of the party. The internal disputes ceased in 1987. Menem, with his prominent victory in his district, was one of the leading figures of the party and disputed its leadership.Presidential elections
, who had been elected governor of Buenos Aires Province, led the renewal of the Partido Justicialista, and was considered their most likely candidate for the presidency. Menem, on the other hand, was seen as a populist leader. Using a big tent approach, he got support from several unrelated political figures. As a result, he defeated Cafiero in the primary elections. He sought alliances with Bunge and Born, union leaders, former members of Montoneros, and the AAA, people from the church, "Carapintadas", etc. He promised a "revolution of production" and huge wage increases, but it was not clear exactly which policies he was proposing. The rival candidate, Eduardo Angeloz, tried to point out the mistakes made by Menem and Alfonsín. Jacques de Mahieu, a French ideologue of the Peronist movement, was photographed campaigning for Menem. His campaign slogans were ¡Siganme! and ¡No los voy a defraudar!The elections were held on 14 May 1989. Menem won by a wide margin, and became the president-elect of Argentina. He was scheduled to take office on 10 December, but inflation levels took a turn for the worse, growing into hyperinflation, causing public riots. The outgoing president Alfonsín resigned and transferred power to Menem five months early, on 8 July. Menem's accession marked the first time since Hipólito Yrigoyen took office in 1916 that an incumbent president peacefully transferred power to an elected successor from the opposition.
Presidency
Economic policy
Hyperinflation forced Menem to abandon party orthodoxy in favour of a fiscally conservative, market-oriented economic policy.At the time, most economists thought that the ideal solution was the Washington Consensus; i.e. reduce expenditures below the amount of money earned by the state, and open international commerce to free trade. Alfonsín had proposed similar reforms in the past, alongside some limited privatization of state-owned enterprises; those projects were resisted by the Partido Justicialistal opposition party, whose internal factions were actually benefiting from the prevailing protectionist policies. The magnitude of the crisis, however, convinced most politicians to change their minds. Menem, fearing that the crisis might force him to resign as well, embraced the Washington Consensus and rejected the traditional policies of Peronism.
The president invited several conservative figures into his cabinet, such as Álvaro Alsogaray, as well as a businessman from Bunge and Born; Miguel Roig, the company's then-vice president, became Menem's first appointed minister of economy on 30 May, although he would be replaced just five days after taking office due to his sudden death by myocardial infarction; in his place was appointed Néstor Mario Rapanelli, who had succeeded Roig as vice president at Bunge and Born.
Congress passed the economic emergency and state reform laws. The first allowed president Menem to reduce or remove subsidies at his discretion, and the latter to privatize state enterprises – the first being telephones and airlines. These privatizations were beneficial to foreign creditors, who replaced their bonds with company shares. Despite increased tax revenue and the money gained from privatizations, the economy was still unstable. The Bunge and Born businessmen left the government in late 1989, amid a second round of hyperinflation.
The first measure of the new minister of economy, Antonio Erman González, was a mandatory conversion of time deposits into government bonds: the BONEX plan. It exacerbated the recession but was successful in reducing the inflation rate, which was its intended purpose. His fourth minister of economy, Domingo Cavallo, was appointed in 1991 and deepened the liberalization of the economy. The Convertibility plan was sanctioned by Congress, setting a one-to-one fixed exchange rate between the United States dollar and the new peso, which replaced the austral. The law also limited public expenditures, but this was frequently ignored. Under Cavallo, there was increased free trade, alongside a general reduction of tariffs on imports and state regulations to tackle inflation, and high taxes on sales and earnings to reduce the deficit caused by it. Initially, the plan was a success: the capital flight ended, interest rates were lowered, inflation fell to single digits, and economic activity increased; in that year alone, the gross domestic product grew at a rate of 10.5%.
The money from privatizations allowed Argentina to repurchase many of the Brady Bonds issued during the crisis. The privatizations of electricity, water, and gas services were more successful than previous ones. YPF, the national oil refinery, was partially privatized as well, with the state keeping a good portion of its shares. The project to privatize the pension funds was resisted in Congress and was approved as a mixed system that allowed both public and private options for workers. The national state also signed a fiscal pact with the provinces, so that they reduced their local deficits as well; Buenos Aires Province was aided with a fund that gave the governor a million pesos daily.
Although the Convertibility plan had positive consequences in the short term, it caused problems that surfaced later. Large numbers of employees of privatized state enterprises were fired, and unemployment grew to over 10%. Big compensation payments prevented an immediate public reaction. Free trade and the expensive costs in dollars forced private companies to reduce the number of workers as well, or risk bankruptcy. Unions were unable to resist the changes. People with low incomes, such as retirees and state workers, suffered under tax increases while their wages remained frozen. Some provinces, such as Santiago del Estero, Jujuy, and San Juan, endured violent riots as well. To compensate for these issues, the government started a number of social welfare programs and restored protectionist policies over some sectors of the economy. It was difficult for Argentine companies to export, and easy imports damaged most national producers. The national budget soon slid into a deficit.
Cavallo soon began the second wave of privatizations, this time targeting the national postal service, the Correo Argentino, and the country's nuclear power plants. He also limited the amount of money released to the provinces. He still had the full support of Menem, despite growing opposition within the Justicialist Party.
The Mexican Tequila Crisis of 1994 impacted the national economy, causing the deficit, recession, and a growth in unemployment. The government further reduced public expenditures, the wages of state workers, and raised taxes. The deficit and recession were reduced, but unemployment stayed high. External debt increased. The crisis also proved that the economic system was vulnerable to capital flight.
The growing discontent over unemployment and the scandals caused by the privatization of the postal service led to Cavallo's removal as a minister, and his replacement by Roque Fernández. Fernández maintained Cavallo's fiscal austerity; he increased the price of fuels, sold the remaining state shares of YPF to Repsol, fired state employees, and raised the value-added tax to 21%. New labor law was met with resistance, both by Peronists, opposition parties, and unions, and could not be approved by Congress.
The 1997 Asian financial crisis and the 1998 Russian financial crisis also affected the country with consequences that lasted longer than the Tequila Crisis and started a depression.