page_title: Economic history of Argentina
section_title: Post-Peron era and the 1960s
hierarchical_section_title: Economic history of Argentina / Relative lag / Post-Peron era and the 1960s
caption_attribution_description: Español: Computadora Clementina
context_page_description: The economic history of Argentina is one of the most studied, owing to the "Argentine paradox", its unique condition as a country that had achieved advanced development in the early 20th century but experienced a reversal, which inspired an enormous wealth of literature and diverse analysis on the causes of this decline. Since independence from Spain in 1816, the country has defaulted on its debt nine times and inflation has often been in the double digits, even as high as 5000%, resulting in several large currency devaluations.
  Argentina possesses definite comparative advantages in agriculture, as the country is endowed with a vast amount of highly fertile land. Between 1860 and 1930, exploitation of the rich land of the pampas strongly pushed economic growth. During the first three decades of the 20th century, Argentina outgrew Canada and Australia in population, total income, and per capita income. By 1913, Argentina was the world's 10th wealthiest state per capita.
  Beginning in the 1930s, however, the Argentine economy deteriorated notably.
context_section_description: In the 1950s and part of the 1960s, the country had a slow rate of growth in line with most Latin American countries, while most of the rest of the world enjoyed a golden era. Stagnation prevailed during this period, and the economy often found itself contracting, mostly the result of union strife.
  Wage growth beginning in 1950 pushed prices up. The inflation rate increased faster, and soon real wages fell. High inflation prompted a stabilization plan that included tighter monetary policy, a cut in public expenditures, and increases in taxes and utility prices. Increasing economic wariness as the 1950s progressed became one of the leading causes for Perón's downfall in the Revolución Libertadora of 1955, as the working classes saw their quality of life diminished, thus stripping Perón from a large part of his popular support.
  Arturo Frondizi won the 1958 presidential election in a landslide. In the same year he announced the beginning of the "oil battle": a new attempt at import substitution which aimed to achieve self-sufficiency in oil production by signing several contract with foreign companies for the mining and exploitation of oil. In 1960, Argentina joined the Latin American Free Trade Association.
  Another coup in June 1966, the so-called Argentine Revolution, brought Juan Carlos Onganía to power. Ongania appointed Adalbert Krieger Vasena to head the Economy Ministry. His strategy implied a very active role for the public sector in guiding the process of economic growth, calling for state control over the money supply, wages and prices, and bank credit to the private sector.
  Krieger's tenure witnessed increased concentration and centralization of capital, coupled with privatisation of many important sectors of the economy. The international financial community offered strong support for this program, and economic growth continued. GDP expanded at an average annual rate of 5.2% between 1966 and 1970, compared to 3.2% during the 1950s.
  After 1966, in a radical departure from past policies, the Ministry of Economy announced a programme to reduce rising inflation while promoting competition, efficiency, and foreign investment. The anti-inflation programme focussed on controlling nominal wages and salaries. Inflation decreased sharply, decreasing from an annual rate of about 30% in 1965–67 to 7.6% in 1969. Unemployment remained low, but real wages fell.
  A gradual reversal in trade policy culminated in the military announcing import substitution as a failed experiment, lifting protectionist barriers and opening the economy to the world market. This new policy boosted some exports, but an overvalued currency meant certain imports were so cheap that local industry declined, and many exports were priced out of the market. The Ministry of Economy put an end to the exchange rate policy of previous governments. The currency underwent a 30% devaluation. In 1970, the "peso moneda nacional" (one of the longest-lived currencies in the region) was replaced by the "peso ley" (100 to 1).
  In May 1969, discontent with Krieger's economic policies led to riots in the cities of Corrientes, Rosario and Córdoba. Krieger was removed, but the Onganía administration was unable to agree on an alternative economic policy. By 1970, the authorities were no longer capable of maintaining wage restraints, leading to a wage-price spiral. As the economy started to languish and import substitution industrialization ran out of steam, urban migration slowed. Per capita income fell, and with it the standard of living. Perón's third term of office was characterized by an expansive monetary policy, which resulted in an uncontrolled rise in the level of inflation.
caption: In 1961, a Ferranti Mercury II named "Clementina" became one of the first computers in use in Argentina.[107]
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