Argentine Crisis

Abstract

This paper discusses the crisis of Argentina in 2001, it will mainly talk about what happened before and after the crisis, also a section will provide the leading to that crisis and also what actions were taken to overcome and get out of this deep recession. Multiple external and internal issues are evaluated and assessed. Graphs will be provided to show the country statistical view during this period. There is an argument about the actions the government took during the crisis and also the position of the IMF in this situation. At the end of the paper there will be a valid opinion provided by our team about this particular of crisis. The resulting recovery value estimated from Argentine global bonds starts out above 50% and falls to 25% after.

Introduction

Wide roads and elegant buildings are signs that show that Argentina was a country that was once booming. Earlier before the crisis, in 1913, Argentina was part of the ten richest countries in the world. But in 1998 right before the crisis, it downgraded to the 36th position in the countries ranking. Since 1982, the IMF has granted the country credits to avoid financial disaster over nine times. A seventh of the total debt amount of developing states in 2001 was $132 billion of Argentina’s external debt. What could be the cause of that? It’s safe to say that there’s excessive spending on welfare states and wages in state sectors, also high levels of corruption played a big role. Due to the spending on these development states, Argentina was not able to meet the goals suggested by the IMF. After suffering one of the worst economic disasters in its history just a little then a decade ago, Argentina has set a historical point not only for them as a country but also to the world. During the year of 2002, Argentina was experiencing the largest debt default then any other country in the world. Following four years of depression, the unemployment in Argentina extended to over...