15
Case Studies
ARGENTINA
Debt and Dictatorship
Argentina's foreign debt skyrocketed under the military dictatorship
of General Videla, which lasted from 1976 to 1981. From 2 April
1976 onwards, the Minister of the Economy, Martinez de Hoz,
pursued an economic policy that marked the beginning of a process
that devastated the country's productive apparatus - and paved the
way for a speculative economy that has bled the country dry. Most of
the loan money granted to the Argentinian dictatorship came from
private banks from the North. It is important to note that the US
authorities (both the Federal Reserve and the administration) fully
supported Argentina's policy of debt accumulation. The architects of
Argentina's policy of debt accumulation were de Hoz and the
Secretary of State for Economic Coordination and Planning,
Guillermo Walter Klein. In order to secure credit from private banks,
the government forced state-owned companies to borrow from inter
national private banks. State-owned companies became the
cornerstone of a strategy aimed at denationalising the state, through
an accumulation of debt that has forced the country to sacrifice much
of its national sovereignty.
Forcing Debt on State-owned Companies
This is how the main Argentinian state-owned company - the
Yacimientos Petroliferos Fiscales (YPF) oil company - was forced to
take on foreign debt even though it had sufficient funds for its own
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