Domingo Felipe "Mingo" Cavallo (born July 21, 1946) is an Argentine economist and politician. Events 356 BC - Herostratus sets fire to the Temple of Artemis in Ephesus, one of the Seven Wonders of the World Year 1946 ( MCMXLVI) was a Common year starting on Tuesday (link will display full 1946 calendar of the Gregorian calendar. For a topic outline on this subject see List of basic Argentina topics. He has a long history of public service and is known for implementing the Convertibilidad plan, which fixed the dollar-peso exchange rate at 1:1 between 1991 and 2001, and the corralito, which restrained savers from withdrawing their own money from bank accounts and was followed by the December 2001 riots and the fall of President De la Rúa. The Argentine Currency Board pegged the Argentine peso to the U A fixed exchange rate, sometimes called a pegged exchange rate, is a type of Exchange rate regime wherein a Currency 's value is matched to the value of The United States dollar ( sign: $; code: USD) is the unit of Currency of the United States; it has also been The peso (originally established as the nuevo peso argentino or peso convertible) is the currency of Argentina. In Finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how Corralito (koraˈlito was the informal name for the economic measures taken in Argentina at the end of 2001 by Minister of Economy Domingo Cavallo in order The December 2001 riots were a period of civil unrest and rioting in Argentina, which took place during December 2001, with the most violent incidents Fernando de la Rúa (born September 15 1937) is an Argentine politician
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Early years
Cavallo was born in San Francisco, Córdoba Province. San Francisco is a city in the east of the province of Córdoba, Argentina, near the border with the province of Santa Fe, on the intersection Córdoba is a province of Argentina, located in the center of the country He graduated with honors in Accounting (1967) and Economy (1968) at the National University of Córdoba and earned his PhD in Economics (1970). Several years later he got a second doctorate in Economics at Harvard University (1977). A doctorate is an Academic degree that indicates the highest level of academic achievement
Beginnings in politics
His involvement in politics began when he was chosen by his peer students to represent them at the highest government body of the Economics School (1965–1966). However, he was then co-opted by military regimes, acting as Undersecretary of Development of the provincial government (1969–1970), Director (1971–1972) and Vicepresident of the Board (1972–1973) of the provincial Bank and Undersecretary of Interior of the national government.
In 1982, during the military dictatorship, Domingo Cavallo was appointed to the presidency of the Central Bank. The National Reorganization Process (in Spanish, Proceso de Reorganización Nacional, often simply El Proceso) was the name used by its leaders The Central Bank of Argentina (Banco Central de la República Argentina BCRA is the Central bank of Argentina. As it happened before in the history of Argentine economy, he implemented financial policies that allowed Argentina's main private enterprises to transfer their debts to the state, transforming their private debt into public obligations. Argentina benefits from rich Natural resources, a highly literate population an export-oriented Agricultural sector and a diversified industrial base In 1983, more than 200 firms (30 economic groups and 106 transnational enterprises) transferred great part of their 17 billion dollar debt to the federal government, thanks to secured exchange rates, which Domingo Cavallo put into practice in the early 1980s. The mechanism turning private debt into liabilities of the state continued throughout the government of Raúl Alfonsín (1983–1989), and took place again after the economic crisis that followed the devaluation in the 2000s. Raúl Ricardo Alfonsín Foulkes (born 13 March 1927 in Chascomús) is an Argentine politician who was the President of Argentina
The 1980s
Notwithstanding this collaboration, when democracy returned in 1983 he became a close economic advisor to Peronist politician José Manuel de la Sota and was elected as a Peronist deputy for Córdoba Province in the 1987 national polls. Peronism (Peronismo or Justicialism (Spanish Justicialismo) is an Argentine political movement based on the ideas and programs associated with José Manuel de la Sota ( November 28, 1949 in Córdoba) is an Argentine Justicialist Party politician The Chamber of Deputies is the lower house of the National Congress, Argentina 's parliament Based on the Fundación Mediterránea think-tank, he prepared an academic team for taking over the management of the economy, and to that end he participated actively in Carlos Menem's bid to the presidency (1989). Carlos Saúl Menem Akil (born July 2, 1930) was President of Argentina from July 8, 1989 to December 10, 1999 President Alfonsín's efforts to control hyperinflation (which reached 200% in July 1989) failed, and led to food riots and Alfonsín's resignation. Certain figures in this article use Scientific notation for readability The 1989 food riots were a series of Riots and related episodes of Looting in stores and supermarkets in Argentina, during the last part of the presidency
As Menem chose to deliver the Economy Ministry to senior executives of the firm Bunge y Born, he had to wait a few more years to put in practice his economic theories. Bunge y Born was an Argentina -based Multinational corporation. In the meantime, as Menem's Foreign Minister (1989–1991), he was instrumental in the realignment of Argentina with the United States. The United States of America —commonly referred to as the Finally, after several false starts that caused renewed hyperinflation peaks, Menem put Cavallo at the helm of the Argentine economy.
The Menem administration
Cavallo was the ideologist behind the Convertibility Plan, which created a currency board that fixed the dollar-peso exchange rate at 1 peso per dollar. The Argentine Currency Board pegged the Argentine peso to the U At the cost of recession, Cavallo succeeded in stopping inflation and made some progress opening new prospects for foreign investment in Argentina through massive privatization that included the state oil monopoly YPF (now Repsol YPF), the telecoms monopoly; several electrical, gas and water companies; the state airlines; two television stations; 10,000 km of roads and some railway lines; steel and petrochemical firms, grain elevators, hotels and even racetracks. A recession is a contraction phase of the Business cycle. The U Foreign direct investment ( FDI) in its classic definition is defined as a company from one country making a physical investment into building a factory in another country Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business Yacimientos Petrolíferos Fiscales ( YPF -means Fiscal Petroleum Fields - was an Argentine state-owned oil company Repsol YPF SA, ( is an integrated Spanish oil and gas company with operations in 29 countries The state welfare system gave way to private pension schemes. Yet, in spite of the state reduction, the budget deficit of the provinces remained almost the same.
Often derogatively accused of being a technocrat, on one famous occasion Cavallo got furious because of a report by demographer Susana Torrado in 1994, and publicly sent her and the scientist at the National Scientific and Technical Research Council to "go wash the dishes. Technocracy: A form of government in which scientists and technical experts are in control "technocracy is described as that society in which those who govern justify themselves Demography is the statistical study of all Populations. It can be a very general science that can be applied to any kind of dynamic population that is one that changes over ".
Independent
In 1996, shortly after Menem's reelection, the flux of money from privatisation ceased, and Cavallo was ousted from the cabinet, due to his volatile personality and fights with other cabinet members, coupled with staggering unemployment and social unrest caused by his economic policies. Year 1996 ( MCMXCVI) was a Leap year starting on Monday (link will display full 1996 Gregorian calendar) Since mid-1995, the former minister has denounced the existence of presumed "mafias" entrenched within the circles of power. The Mafia (also known as Cosa Nostra) is a Sicilian Criminal Secret society which is believed to have first developed in the mid-19th century After his first public accusations, relations between Cavallo, and Menem and his collaborators became progressively more strained until Menem finally asked for his resignation. Cavallo founded a political party, Acción por la República (Action for the Republic), which allowed him to return to Congress, this time as a Deputy for the city of Buenos Aires. Buenos Aires is the Capital and largest city of Argentina. It is geographically located on the southern shore of the Río de la Plata, on the southeastern
Cavallo ran for president in 1999 but was defeated by Fernando de la Rúa. Fernando de la Rúa (born September 15 1937) is an Argentine politician Cavallo came in third place and received 11% of the vote, far behind both De la Rua and the other main candidate Eduardo Duhalde. Eduardo Alberto Duhalde (born 5 October 1941 is a former president of Argentina. He also ran for mayor of Buenos Aires, and lost to Aníbal Ibarra.
De la Rúa and the crisis
In 2001, Cavallo was called by President de la Rúa to lead the economy once again. Year 2001 ( MMI) was a Common year starting on Monday according to the Gregorian calendar. This time he faced a weak government and several months of recession. He tried to earn more time, renegotiating the external debt with the International Monetary Fund, but the growing country risk and the pressure of the main investors and foreign holdings led to a bank run and a massive capital flight. The International Monetary Fund ( IMF) is an International organization that oversees the Global financial system by following the Macroeconomic Country risk refers to the likelihood that changes in the business environment adversely affect operating profits or the value of assets in a specific country Capital flight, in Economics, occurs when Assets and/or Money rapidly flow out of a Country, due to an economic event that disturbs Investors In November 2001, Cavallo introduced a set of measures that blocked the usage of cash, informally known as the corralito ("little playpen"). Corralito (koraˈlito was the informal name for the economic measures taken in Argentina at the end of 2001 by Minister of Economy Domingo Cavallo in order The anger of the vast majority of Argentines created a framework for the popular middle-class protest termed the cacerolazo. Protest expresses relatively overt reaction to events or situations sometimes in favor though more often opposed Cacerolazo is the name of a popular form of Protest that consists in a group of people creating noise by banging pots pans and other utensils in order to call for attention Political pressure by the Peronist opposition and other organized economic interests coincided with the December 2001 riots. The December 2001 riots were a period of civil unrest and rioting in Argentina, which took place during December 2001, with the most violent incidents This critical situation finally forced Cavallo, and then de la Rúa, to resign.
A series of Peronist presidents came and left in the next few days, until Eduardo Duhalde, the opponent of De la Rua and Cavallo in the 1999 presidential election, took power on January 2, 2002. Eduardo Alberto Duhalde (born 5 October 1941 is a former president of Argentina. Soon afterwards the government decreed the end of peso-dollar convertibility, devalued the peso and soon afterwards let it float, which led to a swift depreciation (the exchange rate briefly reached 4 pesos per dollar in July 2002) and inflation (about 40% in 2002). Devaluation is a reduction in the value of a Currency with respect to other monetary units Floating rate may also refer to a Floating interest rate applied to a Loan or other lending product Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies typically in a Floating exchange rate system
Cavallo's policies are viewed by many as major causes of the de-industrialization and the rise of unemployment and poverty endured by Argentina in the 1990s, as well as the collapse of 2001, the ensuing default of the Argentine public debt and the consequences of the uncontrolled depreciation of the peso. The 1990s collectively refers to the years between and including 1990 and 1999 In Finance, default occurs when a debtor has not met its legal obligations according to the debt contract e
After the crisis
Between April and June 2002 Cavallo was jailed for alleged participation in illegal weapon sales during the Menem administration. April 2002: January - February - March - April - May - June - July - August - September June 2002: January - February - March - April - May - June - July - August - September
Cavallo is currently Robert Kennedy Visiting Professor in Latin American Studies at the Department of Economics of Harvard University. He has also continued to serve as a member of the influential Washington-based financial advisory body, the Group of Thirty. G30 redirects here For other uses see G30 (disambiguation. The Group of Thirty, often abbreviated to G30, is an international
External links
- Personal homepage (in Spanish and English)
| Preceded by Erman Gonzalez | Minister of Economy 1991–1996 | Succeeded by Roque Fernandez |
| Preceded by Ricardo López Murphy | Minister of Economy 2001 | Succeeded by Jorge Capitanich |
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