Like all Latin American countries, Argentina has a tumultuous history, one tainted by periods of despotic rule, corruption and hard times. But its history is also illustrious, the story of a country that fought off Spanish colonial rule and was once among the world’s economic powerhouses. It’s a country that gave birth to international icons such as the gaucho, Eva Perón and Che Guevara. Understanding Argentina’s past is paramount to understanding its present and, most importantly, to understanding Argentines themselves.
The Spanish Arrive
Although the banks of the Río de la Plata had been populated for tens of thousands of years by nomadic hunter-gatherers, the first attempt at establishing a permanent settlement was made by Spanish aristocrat Pedro de Mendoza in 1536. His verbose name for the outpost, Puerto Nuestra Señora Santa María del Buen Aire (Port Our Lady Saint Mary of the Good Wind) was matched only by his extravagant expedition of 16 ships and nearly 1600 men – almost three times the size of Hernán Cortés’ forces that conquered the Aztecs. In spite of his resources and planning, Mendoza unfortunately arrived too late in the season to plant adequate crops. The Spanish soon found themselves short on food and in typical colonialist fashion tried to bully the local Querandí indigenous groups into feeding them. A bitter fight and four years of struggle ensued, which led to such an acute shortage of supplies that some of the Spanish resorted to cannibalism. Mendoza himself fled back to Spain, while a detachment of troops who were left behind retreated upriver to Asunción (now the capital of Paraguay).
With Francisco Pizarro’s conquest of the Inca empire in present-day Peru as the focus of the Spanish crown, Buenos Aires was largely ignored for the next four decades. In 1580 Juan de Garay returned with an expedition from Asunción and attempted to rebuild Buenos Aires. The Spanish had not only improved their colonizing skills since Mendoza’s ill-fated endeavor but also had some backup from the cities of Asunción and Santa Fe.
Still, Buenos Aires remained a backwater in comparison to Andean settlements such as Tucumán, Córdoba, Salta, La Rioja and Jujuy. With the development of mines in the Andes and the incessant warfare in the Spanish empire swelling the demand for both cattle and horses, ranching became the core of the city’s early economy. Spain maintained harsh restrictions on trade out of Buenos Aires and the increasingly frustrated locals turned to smuggling contraband.
The city continued to flourish and the crown was eventually forced to relax its restrictions and co-opt the growing international trade in the region. In 1776 Madrid made Buenos Aires the capital of the new Viceroyalty of the Río de la Plata, which included the world’s largest silver mine in Potosí (in present-day Bolivia). For many of its residents, the new status was recognition that the adolescent city was outgrowing Spain’s parental authority.
Although the new viceroyalty had internal squabbles over trade and control issues, when the British raided the city twice – in 1806 and 1807 – the response was unified. Locals rallied against the invaders without Spanish help and chased them out of town. These two battles gave the city’s inhabitants confidence and an understanding of their self-reliance. It was just a matter of time until they broke with Spain.
Smuggling in Buenos Aires
It’s not a coincidence that one of the most popular whiskeys served in Buenos Aires is called Old Smuggler. The city’s history of trading in contraband goes all the way back to its founding. Some argue that the culture of corruption, so pervasive in Argentina, is tolerated because the historical role of smuggling in Buenos Aires led to a ‘tradition’ of rule bending.
The Spanish empire kept tight regulations on its ports and only certain cities were allowed to trade goods with other countries. Buenos Aires, originally on the periphery of the empire, was hard to monitor and therefore not allowed to buy from or sell to other Europeans. Located at the mouth of the Río de la Plata, the settlement was an ideal point of entry to the continent for traders. Buenos Aires merchants turned to smuggling everything from textiles and precious metals to weapons and slaves. Portuguese-manufactured goods flooded the city and made their way inland to present-day Bolivia, Paraguay and even Peru.
Later, the British and high-seas pirates found a ready and willing trading partner in Buenos Aires (and also introduced a taste for fine whiskeys). An increasing amount of wealth passed through the city and much of the initial growth of Buenos Aires was fueled by the trade in contraband. As smuggling was an open game, without favored imperial merchants, it offered a chance for upward social mobility and gave birth to a commercially oriented middle class.
When Napoleon conquered Spain and put his brother on the throne in 1808, Buenos Aires became further estranged from Madrid and finally declared its independence on May 25, 1810.
Six years later, on July 9, 1816, outlying areas of the viceroyalty also broke with Spain and founded the United Provinces of the River Plate. Almost immediately a power struggle arose between Buenos Aires and the provincial strongmen: the Federalist landowners of the interior provinces were concerned with preserving their autonomy, while the Unitarist businessmen of Buenos Aires tried to consolidate power in the city with an outward orientation toward overseas commerce and European ideas. Some of the interior provinces decided to go their own way, forming Paraguay in 1814, Bolivia in 1825 and Uruguay in 1828.
After more than a decade of violence and uncertainty, Juan Manuel de Rosas become governor of Buenos Aires in 1829. Although he swore that he was a Federalist, Rosas was more of an opportunist – a Federalist when it suited him and a Unitarist once he controlled the city. He required that all international trade be funneled through Buenos Aires rather than proceeding directly to the provinces, and he set ominous political precedents, creating the mazorca (his ruthless political police) and institutionalizing torture.
The Fleeting Golden Years
Rosas’ overthrow came in 1852 at the hands of Justo José de Urquiza, a rival governor who tried to transfer power to his home province of Entre Rios. In protest, Buenos Aires briefly seceded from the union, but it was reestablished as the capital when Bartolomé Mitre crushed Urquiza’s forces in 1861. From there, Buenos Aires never looked back and became the undisputed power center of the country.
The economy boomed and Buenos Aires became a port town of 90,000 people in the late 1860s. Immigrants poured in from Spain, Italy and Germany, followed by waves of newcomers from Croatia, Ireland, Poland and Ukraine. Its population grew nearly sevenfold from 1869 to 1895, to over 670,000 people. The new residents worked in the port, lived tightly in crammed tenement buildings, developed tango, and jump-started the leftist labor movement. The onslaught of Europeans not only expanded Buenos Aires into a major international capital but gave the city its rich multicultural heritage, famous idiosyncrasies and sharp political differences.
By Argentina’s centennial in 1910, Buenos Aires was a veritable metropolis. The following years witnessed the construction of the subway, while British companies built modern gas, electrical and sewer systems. Buenos Aires was at the height of a golden age, its bustling streets full of New World businesses, art, architecture and fashion. Argentina grew rich during this time based on its meat production. Advances in refrigeration and the country’s ability to ship beef to distant lands was key to its economic success. In fact, by the beginning of WWI, Argentina was one of the world’s 10 richest countries, and ahead of France and Germany.
Conservative forces dominated the political sphere until 1916, when Radical Party leader Hipólito Yrigoyen took control of the government in a move that stressed fair and democratic elections. After a prolonged period of elite rule, this was the first time Argentina’s burgeoning middle class obtained a political voice.
It was also at this time that Argentina’s fortunes started to change, but unfortunately not for the better. Export prices dropped off, wages stagnated and workers became increasingly frustrated and militant. La Semana Trágica (Tragic Week), when over 100 protesters were killed during a metalworkers’ strike, was the culmination of these tensions; some say this radical reaction was due to the government being pressured by moneyed interests. The Wall Street crash of 1929 dealt the final blow to the export markets and a few months later, in 1930, the military took over the country in a coup led by General José Félix Uriburu. The golden age rapidly became a distant memory.
This was the first of many military coups that blemished the rest of the century and served to shackle the progress of the nation. Scholars have argued that the events that culminated in the 2001 economic collapse can be traced back to the 1930 military takeover.
The Age of the Peróns
During WWII the rural poor migrated into Buenos Aires in search of work. The number of people living in the city nearly tripled and it soon held a third of the national population (which is similar to the percentage today). The growing strength of these urban working classes swept populist Lieutenant-General Juan Domingo Perón into the presidency in 1946. Perón quickly nationalized large industry, including the railways, and created Argentina’s first welfare state, cultivating his image at massive popular rallies in Plaza de Mayo.
The glamorous Eva Duarte, a onetime radio soap-opera star who married Perón in 1945, became the celebrity first lady and an icon who would eclipse Perón himself. Known as Evita, her powerful social-assistance foundation reached out to lower-class women through giveaways of such things as baby bottles and strollers, and the construction of schools and hospitals. The masses felt a certain empathy with Evita, who was also born into the working class. Her premature death in 1952 came just before things went sour and her husband’s political power plummeted.
After Evita’s death Perón financed payouts to workers by simply printing new money, bungled the economy, censored the press and cracked down on opposition. He was strikingly less popular without Evita, and was deposed by the military in 1955 after two terms in office. Perón lived in exile in Spain while a series of military coups ailed the nation. When he returned in 1973, there were escalating tensions from left and right parties; even if he’d lived to serve his term of re-election, Perón would have had too much on his plate. His successor, his hapless third wife Isabel, had even less staying power and her overthrow by a military junta in 1976 came as no surprise.
Although the effects of Perón’s personal political achievements are debatable, the Peronist party, based largely on his ideals, has endured.
The Military Dictatorship 1976 to 1983
The new military rulers instituted the Process of National Reorganisation, known as El Proceso, and this was headed by the notorious Jorge Rafael Videla. Ostensibly an effort to remake Argentina’s political culture and modernize the flagging economy, El Proceso was nothing less than an attempt to kill off or intimidate all leftist political opposition in the country.
Based in Buenos Aires, a left-wing guerrilla group known as the Montoneros bombed foreign buildings, kidnapped executives for ransom and robbed banks to finance its armed struggle against the government. The Montoneros were composed mainly of educated, middle-class youths; they were hunted down by the military government. An estimated 30,000 civilians died – many of them simply ‘disappeared’ while walking down the street or sleeping in their beds; some victims had no links to the Montoneros. Many were tortured to death, or sedated and dropped from planes into the Río de la Plata. Anyone who seemed in any way suspicious or sympathetic to the Montoneros could be whisked off the streets and detained, tortured or killed. A great number of the ‘disappeared’ are still unaccounted for today.
The military leaders let numerous aspects of the country’s well-being slip into decay, along with the entire national economy. When Ronald Reagan took power in the USA in 1981, he reversed Jimmy Carter’s condemnation of the junta’s human rights abuses and invited the generals to visit Washington, DC. Backed by this relationship with the USA, the military was able to solicit development loans from international lenders, but endemic corruption quickly drained the funds into their Swiss bank accounts.
The Return to Democracy
The military dictatorship that ruled the country with an iron fist lasted from 1976 to 1983. General Leopoldo Galtieri took the reins of the draconian military junta in 1981, but its power was unraveling: the economy was in recession, interest rates skyrocketed and protesters took to the streets of Buenos Aires. A year later, Galtieri tried to divert national attention by goading the UK into a war over control of the Falkland Islands (known in Argentina as Las Islas Malvinas). The British had more resolve than the junta had imagined and Argentina was easily defeated. The greatest blow came when the British nuclear submarine Conqueror torpedoed the Argentine heavy cruiser General Belgrano, killing 323 men. Argentina still holds that the ship was returning to harbor.
Embarrassed and proven ineffectual, the military regime fell apart and a new civilian government under Raúl Alfonsín was elected in 1983. Alfonsín enjoyed a small amount of success and was able to negotiate a few international loans, but he could not limit inflation or constrain public spending. By 1989 inflation was out of control and Alfonsín left office five months early, when Carlos Menem took power.
Menem & the Boom Years
Under the guidance of his shrewd economic minister, Domingo Cavallo, Carlos Menem introduced free-market reforms to stall Argentina’s economic slide. Many of the state-run industries were privatized and, most importantly, the peso was fixed by law at an equal rate to the American dollar. Foreign investment poured into the country. Buenos Aires began to thrive again: buildings were restored and new businesses boomed. The capital’s Puerto Madero docks were redeveloped into an upscale leisure district, tourism increased and optimism was in the air. People in Buenos Aires bought new cars, talked on cell phones and took international vacations.
Although the Argentine economy seemed to be booming to the casual observer, by Menem’s second term (1995–99) some things were already amiss. The inflexibility imposed by the economic reforms made it difficult for the country to respond to foreign competition, and Mexico’s 1995 currency collapse jolted a number of banks in Buenos Aires. Not only did Menem fail to reform public spending, but corruption was so widespread that it dominated daily newspaper headlines.
The Economic Crisis
As an economic slowdown deepened into a recession, voters turned to the mayor of Buenos Aires, Fernando de la Rúa, and elected him president in 1999. He was faced with the need to cut public spending and hike taxes during the recession.
The economy stagnated further, investors panicked, the bond market teetered on the brink of oblivion and the country seemed unable to service its increasingly heavy international debt. Cavallo was brought back in as the economic minister and in January 2001, rather than declaring a debt default, he sought over US$20 million more in loans from the IMF.
Argentina had been living on credit and it could no longer sustain its lifestyle. The facade of a successful economy had been ripped away, and the indebted, weak inner workings were exposed. As the storm clouds gathered, there was a run on the banks. Between July and November, Argentines withdrew around US$20 billion, hiding it under their mattresses or sending it abroad. In a last-ditch effort to keep money in the country, the government imposed a limit of US$1000 a month on bank withdrawals. Called the corralito (little corral), the strategy crushed many informal sectors of the economy that function on cash (taxis, food markets), and rioters and looters inevitably took to the streets. As the government tried to hoard the remaining hard currency, all bank savings were converted to pesos and any remaining trust in the government was broken. Middle-class protesters joined the fray in a series of pot-and-pan-banging protests, and both Cavallo and de la Rúa bowed to the inevitable and resigned.
Two new presidents came and went in the same week and the world’s greatest default on public debt was declared. The third presidential successor, former Buenos Aires province governor Eduardo Duhalde, was able to hold onto power. In order to have more flexibility, he dismantled the currency-board system that had pegged the peso to the American dollar for a decade. The peso devalued rapidly and people’s savings were reduced to a fraction of their earlier value. In January 2002 the banks were only open for a total of six days and confidence in the government was virtually nonexistent. The economy ceased to function: cash became scarce, imports stopped and demand for nonessential items flatlined. More than half of the fiercely proud Argentine people found themselves below the national poverty line: the once-comfortable middle class woke up in the lower classes and the former lower classes were plunged into destitution. Businesspeople ate at soup kitchens and homelessness became rampant.
Enter Néstor Kirchner
Duhalde, to his credit, was able to use his deep political party roots to keep the country together through to elections in April 2003. Numerous candidates entered the contest; the top two finishers were Menem (making a foray out of retirement for the campaign) and Néstor Kirchner, little-known governor of the thinly populated Patagonian province of Santa Cruz. Menem bowed out of the runoff election and Kirchner became president.
Kirchner was the antidote to the slick and dishonest Buenos Aires establishment politicians. He was an outsider, with his entire career in the provinces and a personal air of sincerity and austerity. The people were looking for a fresh start and someone to believe in – and they found that in Kirchner.
During his term Kirchner defined himself as a hard-nosed fighter. In 2003 he managed to negotiate a debt-refinancing deal with the IMF under which Argentina would only pay interest on its loans. In 2006 Argentina repaid its $9.5 billion debt, not a small feat, which drove his approval rating up to 80%. Annual economic growth was averaging an impressive 8%, the poverty rate dropped to about 25% and unemployment nose-dived. A side effect of the 2001 collapse was a boom in international tourism, as foreigners enjoyed cosmopolitan Buenos Aires at bargain prices, injecting tourist money into the economy.
But not everything was bread and roses. The fact that Argentina had repaid its debt was fantastic news indeed, but economic stability didn’t necessarily follow. In fact, a series of problems ensued during Kirchner’s presidency: high inflation rates caused by a growing energy shortage, unequal distribution of wealth, and a rising breach between rich and poor that was slowly obliterating the middle class.
On the foreign policy front, Kirchner’s belligerence became aimed at outside forces. In November 2005, when George Bush flew in for the 34-nation Summit of the Americas, his presence sparked massive demonstrations around the country. Although anti-US sentiment unites most Argentines, some feared that Kirchner’s schmoozing with Venezuelan president Hugo Chávez alienated potential investors in the United States and Europe.
Kirchner made admirable strides toward addressing the human rights abuses of the military dictatorship. In 2005 the Supreme Court lifted an amnesty law that protected former military officers suspected of human rights abuses, and this led to a succession of trials that put several of them away for life.
The Trials & Tribulations of Cristina
When Néstor Kirchner stepped aside in July 2007 in favor of his wife’s candidacy for the presidential race, many started wondering: would Cristina be just a puppet for her husband, who intended to rule behind the scenes?
In the October 2007 presidential election, Cristina Fernández de Kirchner succeeded in her ambition to move from first lady to president. Weak opposition and her husband’s enduring clout were some of the reasons for her clear-cut victory. While this was not the first time Argentina had had a female head of state (Isabel Perón held a brief presidency by inheriting her husband’s term), Cristina was the first woman to be elected president by popular vote in Argentina.
Cristina’s first term was marked by roller-coaster approval ratings. In March 2008 she significantly raised the export tax on soybeans, infuriating farmers, who went on strike and blockaded highways. Soon after, she enacted a law set to break apart Clarín, a media conglomerate that opposed her presidency. All the while, Argentina was hounded by inflation unofficially estimated at up to 25%. There were plenty of positives, however. The economy grew strongly during the first part of her tenure, and Cristina implemented a wide range of social programs to beef up the pension system, benefit impoverished children and help fight cases related to crimes against humanity. And in July 2010 she signed a bill that legalized same-sex marriage in Argentina, making it Latin America’s first country to do so.
On October 27, 2010, Cristina was dealt a serious blow when Néstor Kirchner died suddenly of a heart attack. The country rallied around Cristina’s sorrow, and her popularity in early 2011 remained high enough that she ran for office again and was easily re-elected. She had run on a platform that appealed to the populist vote, promising to raise incomes, restore industry and maintain Argentina's economic boom. But her popularity wasn't to last.
By 2015, Argentina was ready for a change. Unable to contest a third term under the constitution, Cristina backed the candidacy of Daniel Scioli. The contest was close, but Scioli was narrowly defeated by former Buenos Aires mayor Mauricio Macri, leader of the political coalition 'Cambiemos' (Let's Change). How that change will be realized remains to be seen.