History of Rosario - Economic Crisis

Economic Crisis

Hyperinflation (over 3,000%) caused an economic collapse of the country in 1989. In Rosario, protests against the price rises and lack of supplies, coupled with general social discontent and the influence of extremist elements, ended up in riots and looting to supermarkets and other businesses, which then spread to other large cities. Between 26 May and 29 May police repression officially caused 14 casualties in Rosario. President Alfonsín declared a state of emergency (estado de sitio), suspending constitutional guarantees, and on 12 June he resigned, leaving office in the hands of president elect Carlos Menem six months in advance.

The 1990s were the years of the Menem administration. While macroeconomy was healthy and prices stabilized, after a few years of improvement the situation in Rosario turned to the worse, as the industrial sector of the city was dismantled by competition from cheap imports (favoured by the low fixed exchange rate) and the agricultural exports stagnated. In 1995 (the year of Menem's reelection) unemployment in the Rosario area reached 21.1%, the highest in Argentina at the time.

Following the decline of much of the city's once extensive industry, as well as the lack of international competitiveness of agricultural products that make the bulk of production in the region, much of Rosario's population fell under the poverty line. Since then, a sizable proportion of the population lives in villas miseria (shanty towns) lacking toilets, running water and other essential services. These shantytowns have always existed in modern times, but they increased in area and population during this period, often augmented by internal migration (residents of poorer regions of the country, particularly Chaco Province). The last official survey, a study conducted by the Municipal Bank Foundation, dates from 1996; it indicated the presence of 91 precarious settlements, with 115,000 inhabitants (10% of the population of the metropolitan area).

In December 2001, at the peak of the economic recession, poor and unemployed people in Rosario (as in other major cities) again took to looting. Police repression in the December 2001 riots caused 8 casualties in the city, notably that of social activist Pocho Lepratti.