Origins On December 20, 2001, Fernando de la Rua, President of Argentina, resigned from office and left the Government House by helicopter. This act symbolized the weakness of the Government of Argentina in an economic and political crisis whose origins go back over the previous three decades. Three days later, interim President Adolfo Rodriguez Saa announced the cessation of payments on Argentina’s external debt. On January 3, 2002, the new President Eduardo Duhalde devalued the Argentine peso from 1:1 with the US dollar, to 3:1 and to a floating currency. Argentina was in the midst of the worst economic crisis in its history. The story of the crisis, its causes, and its serious consequences have been the subject of many books, commentaries, and as is frequently the case, also the casting of blame in many directions. Although the economic and political history of the country has been dramatic, with many twists and turns during the twentieth century, it is clear that the crisis, which came to a head on December 19, 2001, was different and marked a turning point in the understanding not only of Argentines but of the world at large. Comparison with other financial and economic crises of the 1990s in East Asia, Russia, and Brazil underline the severity of the crisis and support the assertion that this crisis was the worst in the recent economic history of nations. It was also a dramatic crisis of state performance. The government could not manage its international economic relations effectively and this in turn had significant domestic economic and political consequences. It could also be argued that its failure to manage the domestic economy and establish effective statesociety relations precipitated the international crisis. Clearly the causation was multi-directional. As this chapter will show, the crisis itself was more than an economic crisis alone. The economy of Argentina has always been somewhat of a puzzle. The country enjoys enormous natural wealth, land area, water, fertile soils, and has been inhabited by a population, many of whose families came from Europe in the late nineteenth and early twentieth centuries. In 1910 at the time of its cen-

attraction for those seeking to go to “America.”1 Immigrants arrived in a place in which the land was very productive, as Argentina became known as the breadbasket of the world, exporting huge quantities of beef and grains to Europe. Agricultural productivity was matched by rapid development of industries and services as the national government clearly pursued its national project in supporting new institutions, education, infrastructure, and many of the components of a new nation-state. Investment, rising incomes, consumption, and improved welfare were the mark of a rising new country. In this almost half century, Argentina had grown at six percent per year from 1870 to 1913, making it the fastest growing country in the world, along with Japan.2