Geert Bekaert and Campbell R. Harvey's


Chronology of Economic, Political and Financial Events in Emerging Markets




Major Political and Economic Events


Value-added tax introduced at 16%.p


Two tier exchange rate structure reintroduced.a


The exchange rate structure was merged and unified into the Official Fluctuating Free Market Rate, applicable to virtually all transactions except currency-swap operations with the Central Bank, to which the Official rate still applied.a


Credit controls were removed. Mehrez and Kaufmann Liberalization date. a1


Swap transactions suspended; Official rate inoperative.a


System of minidevaluations (crawling peg) was theoretically abandoned, and the Peso was placed on a controlled, floating basis. However, the minidevaluation system subsequently remained in effect.a


The central bank introduced Advance schedule of daily exchange rates (tablita).a


Banking crisis.y 1980-82 more than 70 institutions were liquidated or subject to central bank intervention accounting for 16% of assets of commercial banks and 35% of total assets of finance companies. Resolution costs amounted to 55.3% of GDP. Causes: (1) high real interest rates, overvaluation of the exchange rate, and higher real wages reduced private enterprise sector's ability to service its debt; (2) liberalization of financial sector without adequate strengthening of regulatory framework and bank supervision; weak bank supervision and enforcement was coupled with 100% state guarantee on bank deposits which led to moral hazard. The government implemented several stabilization plans which proved to be unsuccessful.a2


A two-tier exchange rate structure was reintroduced.a


The two-tier system was abandoned, creating a controlled Effective Rate.a


Argentine soldiers enter the British-occupied Falkland Islands (Islas Malvinas). Beginning of Falkland Island War.a,z


Per dollar tax introduced on all exports proceeds.a


Falkland Island War ends.z


Two-tier system reinstated.a


Beginning of Mexican debt crisis - impacts most of Latin America


Mixed rate was devised for import and export operations.a


Two-tier system abendoned.a


The terms were announced of the U.S. dollar-denominated bonds and promissory notes to be issued by the Government of Argentina in lieu of providing foreign exchange to meet principal repayments falling due on certain private sector foreign debts with exchange rate guarantee by the Central Bank.a3(first entry)


Old Peso replaced at an exchange of 10,000 old Pesos for 1 new Peso (Peso Argentino.)a


The Central Bank issued regulations providing for the compulsory rollover of Argentine private sector foreign loans covered by swap agreements with the Central Bank. a3


All principal repayments falling due on foreign loans for which domestic borrowers had obtained an exchange rate guarantee from the Central Bank during 1982 were required to be rescheduled with at least 3.5 years grace and 5 years total maturity.a3


The U.S. dollar-denominated bonds and promissory notes issued in lieu of providing foreign exchange to meet principal repayments falling due on loans covered by exchange rate guarantees could be issued in the name of the domestic debtors, rather than the foreign debtors, in which case the bonds or promissory notes would serve to guarantee a rescheduling agreed directly between the creditor and the debtor.a3


The National Oversight Commission responsible for the implementation of Law No. 22591 of May 18, 1982, which froze the assets of firms owned or directly or indirectly controlled by British subjects no resident in Argentina, was given the authority to suspend the provisions of that law for specified entities.a3


The provisions of Law No. 22591 of May 18, 1982 were suspended with regard to the transfer of profits, dividends, royalties, and technical assistance payments by financial firms.a3


The provisions of Law No. 22591 of May 18, 1982 were suspended with regard to the transfer of profits, dividends, royalties, and technical assistance payments by nonfinancial firms.a3


Firms participating in the Government's price adjustment accord would be entitled to a reduction of 2% a month in the premium paid for their exchange rate insurance contracts.a3


Emergency controls on all foreign exchange dealings after provincial judge blocks foreign debt negotiations and president of Central Bank is arrested.a


All fixed-term deposits in foreign exchange maturing in the period through Dec. 4, 1983 should be extended for a period of 60 days beyond the original maturity date, and all demand deposits in foreign exchange were frozen until Dec.4, 1983.a3


Raul Alfonsin, first democratically elected President in a decade, assumes power.a


If neither the foreign creditors nor the domestic debtor had, by Nov.4, 1983, taken delivery of the U.S. dollar-denominated bond or promissory note issued in lieu of providing foreign exchange in repayment of loans covered by an exchange rate guarantee of the Central Bank, the accrued interest on that bond or promissory note would be placed in a deposit at the Central Bank and blocked for a period of 180 or 120 days.a3


The Central Bank announced procedures for registration of All Argentine private sector external obligations with an original value in excess of US$15,000.a3


The system under which firms participating in the Government's price accord paid reduced premiums for their exchange rate insurance contracts was terminated.a3


Decree 4070 enacted requiring all imports to have a permit.p,a


The period for renewing outstanding swaps, and paying the associated premiums, was extended to Feb.3, 1984; swap contracts not renewed by that date would be canceled.a3


The Central Bank would consider applications to capitalize amounts corresponding to loans for which the domestic borrower had obtained an exchange rate guarantee from the Central Bank.a3


Rescue package put together by 4 Latin American Countries and U.S. for the payment of interest arrears on Argentina's foreign debt


For exchange rate guarantee contracts in which the premium paid for the exchange insurance was set equal to the difference between domestic interest rates and one-month LIBOR, the relevant domestic rate was changed from the regulated interest rate to the prevailing rate for bankers' acceptance.a3


The exchange rate guarantee contracts matured as of Dec. 31, 1983 would be canceled, and the pesos that had been paid to the Central Bank in liquidation of the loan and the guarantee contract would be returned to the domestic debtor, unless applications for the associated BONOD or promissory notes were received by July 31, 1984.a3


The maximum period for submitting applications for bonds and promissory notes with respect to exchange rate guarantee contracts matured by Dec. 31, 1983 was extended to Aug.31, 1984. For loans with an original maturity of more than one year granted or guaranteed by foreign official institutions, the pertinent forms should be completed but the BONOD (or promissory note) would not be issued before the conclusion of discussions on Argentina's debt rescheduling with the Paris Club.a3


The Central Bank announced a 180-day extension of the compulsory rollover of Argentina's private sector foreign loans covered by swap agreements with the Central Bank. a3


The deadline for submitting applications for bonds and promissory notes with respect to exchange rate guarantee contracts matured by Dec. 31, 1983 was extended to Oct. 31, 1984.


The conversion of foreign loans with exchange guarantees into direct investment was allowed at the official exchange. The difference between the guaranteed and the official rate would be put in a blocked deposit for a period negotiated by the Central Bank with investors on a case-by-case basis.a3


Financial credits received after this date through transactions in the single foreign exchange market should have maturities of at least 180 days, and should always have fixed maturity dates. Principal and interest payments on such instruments should be effected directly through the authorized entity involved, without prior central bank authorization; the outward transfers should be effected in accordance with the original specified maturity when the credit was contracted and not more than two working days in advance.a3


Tentative agreement with creditors on rescheduling, financed by IMF, banks and bilateral lenders.a


The Central Bank announced a scheme for the conversion into 120-day certificates of deposit, of private sector arrears on interest dating from the last quarter of 1983 that were due to foreign commercial banks.a3


The Central Bank extended the deadline for the conversion of foreign loans with exchange guarantee into direct investment from Dec. 28, 1984 to March 29, 1985.a3


Tariff surcharges 10% for imports and 9% for exports.


Banking crisis.y


The deadline for the expiration of the scheme for the capitalization of loans with exchange guarantee into foreign direct investment was extended until May 31.a3


The Central Bank issued a list of debt service obligations refinanced under the the Paris Club accord and announced that these obligations would not be paid upon maturity.a3


A financial support system was established for banks and savings institutions to help them in servicing deposits in foreign currency. The Central Bank also fixed a reserve requirement of 100% on the growth of foreign currency-denominated deposits in the commercial banking system after April 30,1985. Deposits existing before that date were to have been deposited at the Central Bank or lent for the purpose of export finance.a3


Austral plan begins (price and wage controls, devaluation).p


The Central Bank suspended for 120 days deposits into and withdrawals from foreign currency-denominated accounts, with the exception of deposits of foreign delegations and international organizations. Depositors could request BONEX bonds for term deposits as they matured.a3


Central Bank freezes U.S. Dollar bank accounts for 120 days and finally reaches a settlement with the IMF on austerity measures.a


The deadline for the expiration of the scheme for the capitalization of loans with exchange guarantee into foreign direct investment was extended until August 31.a3


The Central Bank issued regulations governing the suspension of deposits into, or withdrawals from, foreign currency deposits, including a schedule for the extension of the maturity of deposits falling due during the period of the suspension.a3


Peso Argentino replaced at an exchange of 1,000 old Pesos for 1.00 Austral. A fixed exchange rate vis-Ó-vis the dollar was introduced.a


The Central Bank raised from 180 days to one year the minimum maturity on inflows of foreign financial capital negotiated in the official exchange market. For exports of grains and principal agricultural products, the maximum permissible terms for payment and for foreign currency export prefinance were shortened from 180 days to 30 days, while for most other exports, the maximum term was set at 360 days.a3


The Central Bank issued regulations governing the refinancing of foreign currency principal obligations of the private sector not covered by exchange guarantee, and the liquidation of accrued interest on these obligations.a3


The list of obligations to be refinanced under the Paris Club could not be settled on their due dates.a3


A deposit scheme was instituted such that persons with debt service obligation not covered by exchange guarantee that matured before July 1,1985 were instructed to constitute a deposit in local currency at the Central Bank before July 27, 1985 equivalent to the debt service obligation. These deposits and the corresponding debt service obligations would be discharged according to the norms established under Communication A 696.a3


The suspension of the withdrawal of funds from accounts in foreign currencies was partially lifted.a3


The banks were required to maintain a 100% reserve deposit on foreign currency demand deposits. Foreign currency time deposits were to be accepted for the account and to the order of the Central Bank for a specified period of 60-360 days. The Central Bank would provide rediscounts to commercial banks for up to 40% of their fix-term foreign currency deposits to be used by banks for foreign trade finance.a3


The Central Bank announced a schedule for the constitution of local currency deposits against debt service obligations.a3


Bank debt restructuring agreement.i


Prior to the presentation of requests for payments abroad in the form of interest and for which the creditor was a foreign commercial bank, the institutions involved and the debtors should check to find out whether the payments were related to transactions to be refinanced through the Paris Club and should refrain from presenting payment requests for transactions included in the list of Circular SEPEX-1-4. a3


FDI in the importation, production, and marketing of computers, telecommunications, and electronic equipment would be subject to prior approval.a3


The 120-day suspension of withdrawal of funds from accounts in foreign currency was lifted.a3


Regulations governing the refinancing of debt owed by the public enterprises and official banks and used by private sector entities with government guarantee or by means of official banks' utilization of external lines of credit were announced.a3


The Central Bank announced provisions for the settlement of private sector obligations, included in the refinancing through the Paris Club, of debts owed to France.a3


The maximum period for direct rescheduling between creditor and debtor was set at five years, but allowance was made for shorter periods. In cases of shorter direct refinancings, the maturity of the BCRA notes would be adjusted to maintain a total refinancing period of 10 years.a3


Principal payments on public and publicly guaranteed debt were made subject to 90-day and 180-day rollovers, with interest payments set at LIBOR plus 1.375%.a3


Phase II of the Austral plan announced.a


Main parts of Austral plan abendoned.p


Austral devalued and system of minidevaluations implemented.a


The Central Bank of Argentina announced a rollover of 180 days of all principal payments falling due between Jan.1, 1986 and Sep. 30,1986. At the option of the foreign creditor, the obligations could be rescheduled also for 180 days.a3


Pending the conclusion of rescheduling negotiations, the Central Bank of Argentina announced the regulations for the regularization of private sector debts with exchange rate guarantees of the Central Bank. Upon maturity, the contracts would be rescheduled through the issuance of dollar-denominated obligations of the Republic of Argentina maturing in 180 days and carrying an interest rate either LIBOR+1.375% or a prime rate+1%.a3


The Central Bank of Argentina announced the mandatory rollover for a minimum period of one year of all commercial obligations of the private sector that are not included in the financing program.a3


The Central Bank announced the regulations for the registration of external debt obligations subject to a possible rescheduling with the members of the Paris Club that fall due in 1986, including the constitution of local currency deposits for obligations that were not guaranteed Argentine public entities.a3


The Central Bank announced that the obligations subject to mandatory rollovers could be effected earlier, provided that the debtor pays a premium to the Central Bank that takes account of the differential between the foreign and domestic interest rates since the original maturity date of the obligation.a3


The Central Bank announced the introduction of an option for the early cancellation of private sector debts with an exchange guarantee of the Central Bank: the domestic debtor accepts a U.S. dollar-denominated bond for that part of the underlying obligation for which the Government is responsible as a result of the foreign exchange contract. The debtor continues to owe the difference between the debt assumed by the Government and the original amount of the obligation. Such amounts are deleted from the Central Bank registry and their servicing is not eligible for the purchase of foreign exchange at the official rate.a3


End of Austral Plan.


Argentina offers amnesty to flight capital in conjunction with debt restructuring agreement reached in same year. The program fails to bring back money because it required one for one matching of converted debt with new money.i


Deposit rates were free. Mehrez and Kaufmann's second Liberalization date. a1


General guidelines were announced for the debt-equity conversion scheme. Most public guaranteed debt would be eligible for conversion, and projects that result in the purchase of new equipment, establishment of new plants, or increases in capacity would be eligible investments and would be converted at face value at the official exchange rate and accompanied by an inflow of matching funds at least equal to the face value of the debt. Redemption of the resulting investment would not be allowed for ten years from the investment date. a3


Bank debt restructuring agreement.i


Alfonsin government implements steps to deregulate the financial sector.p


Two-tier system reinstated.a


The debt conversion scheme was modified. Investors were required to provide matching funds of 30% rather than 50% of the approved investment, and these funds may be in foreign or domestic currency. The import content of any new investment financed through conversion schemes must be covered with foreign exchange. With the introduction of a market-determined exchange rate for nontrade transactions by the private sector, debt will now be converted into domestic currency at the exchange rate in the free, rather than the official, exchange market.a3


Argentina begins accumulating interest arrears.i


Plan Primavera announced. Exchange rate system revised.a


A new three-tier exchange rate system replaced the dual rate.b


Brady plan (adjustment packages that combined debt relief and market-oriented reforms)


The official exchange rate was abolished and all dealing takes place at Free Market Rate.


Free market rate abandoned and fixed Official Rate was set. All other currency trading was illegal.a


New Foreign Investment Regime put into place. All legal limits on foreign investment abolished. Capital gains and dividends can now be repatriated freely.e No need for previous approval of transactions. No legal limits regarding type or nature of foreign investment. Introduction of a free exchange regime (free repatriation of capital, remittance of dividends and capital gains.)


Bekaert/Harvey Official Liberalization date [final version].


Kim and Singal Liberalization date.


Bekaert/Harvey Official Liberalization date [NBER version].


The exchange system was again unified for all dealings under a Free Floating Rate, the currency unit depreciated, and dual export rates existed.a


Banking crises (1989-90): all banks or 50% of deposits were involved in banking crises. Causes: (1) public sector debt distress coupled with loss of access to international credit markets; (2) immediate trigger of 1989 crisis was government's decision to free foreign exchange market and remove all price controls which provoked a sudden price increase and led to bank deposit withdrawals. Overall change in macro policy: introduction of law of convertibility; de-indexation of contracts.a2


Currency made fully convertible making foreign portfolio investment by residents possible.a


Aerolineas Argentinas (Airline) privatized, $260 million.p


Joins Multilateral Investment Guarantee Agency, sponsored by the World Bank.p


Menem extends value added tax to services, implements tax on fixed assets.p


ENTEL (Telecommunications) privatized, $1244 million.p


Molinos Rio de la Plata places 5 year $21 million Eurobond.i


A "crawling peg" exchange rate adjustment mechanism was introduced.b


Convertibility Law (fixed exchange rate to dollar and abolished all exchange and capital controls).p


Export taxes were eliminated, abolishing the dual Export Rates.b


Molinos Rio de la Plata returns with an 18-month $15 million Eurobond issue.i


Petroleo Brazileiro issues $250 million two year note.i


First ADR announced. Telefonica De Agentina SA - B.aa


Law protecting dollar denominated deposits was enacted.p


Argentina raises $300 million in Eurobond two year issue with put option after first year.i


IFC Liberalization date.i


Buckberg Liberalization date.d


Menem signs omnibus decree ordering reform of the state, including deregulation of financial market.p


Argentine Fund begins.i This fund marks the first time US investors can invest in a mutual fund that that represents a broad part of the market. Deregulation decree reformed domestic industry, external trade, and capital markets. The deregulation decree eliminates capital gains taxes for foreigners.e Net asset value $62.4 million in December 1991.aa


Argentina sells share in Entail worth $356 million as part of privatization program.i President Menem signs unprecedented and comprehensive decree giving Argentina one of the most liberalized economies of Latin America.e


ADR effective date. (Company=TELEFONICA DE ARGENTINA S.A., Exchange=NYSE)a11


The introduction of the Insider Trading (IT) Laws. a4


Argentina's Comision de Valores (Securities Commission) issues regulations requiring debt instruments to carry at least 2 risk ratings by credit rating agencies.i


Austral replaced by peso. All transactions in currency could be made on the free market at free negotiated rates.b


Argentina sells shares in Telecom Argentina worth $266 million as part of privatization program.i


Preliminary agreement reached on bank refinancing package to be finalized in December. All new bonds issued in new agreement will be eligible for debt-equity conversion with new privatizations. Three series of call warrants on Argentine commercial bank debt are issued by J.P. Morgan and Merrill Lynch.i


Lehman Brothers launches first public call warrants on a basket of Argentina's shares.i


Moody's upgrades Argentina's sovereign debt rating from B3 to B1.i


Agreement on structure of new national pensions system (to be financed with the privatization proceeds of Yacimientos Petroliferos Fiscales, YPF (petroleum company).


Bank debt restructuring agreement.i


First exchange-traded overseas listing.a9


Credit controls were substantially reduced. Mehrez and Kaufmann's third Liberalization date. a1


Social security reform ( announcement of creation of private pension fund system to begin operation in future). Argentina's Comission de Valores stipulates that only financial intermediary firms belonging to self-regulating organizations can participate in public offering of securities.i This move attempts to cut down on insider trading on the Buenos Aires exchange.


Brady Plan agreement.


Swaps of bonds for eligible debts agreed to under the Brady Plan by Argentina and foreign creditor banks began to take place in accordance with the debt- and debt-service-reduction operations.a3


Import tariffs on capital goods abolished and a 15% tax reimbursement to capital goods producers established. Global debt offering by Transportadora de Gas de Sur.


Yacimientos Petroliferos Fiscales (YPF) partly privatized by selling $2.1 billion in an equity offering in the U.S. and domestic markets (45% sold on NYSE and Buenos Aires Stock Exchange). The issue was the second largest equity offering by a developing country and was one of the largest offerings in the world.i


S&P assigns first time rating of BB- to sovereign debt.i


Integration into Mercosur delayed.


Constitutional reforms related to presidential election process.


Mexican presidential candidate assassinated.


Swaps of bonds for eligible debts agreed to under the Brady Plan by Argentina and foreign creditor banks were completed. a3


Merval Index Futures Market created and Mercosur common market agreement was signed. New pension system began operating.


First T-bill auction in 20 years held.


Devaluation was followed by a withdrawal of foreign investors from Latin American countries, leading to banking crises: eight banks were suspended and three banks collapsed. Events weakened position of wholesale banks that had significant inventories of government securities on which they were incurring capital losses due to the increase in interest rates. Non-financial firms were affected as well. Central Bank provided liquidity assistance through different mechanism. a2


Laeven's banking liberalization (FLI) dates.a13


Announcement that companies listed on the exchange will be allowed to repurchase their shares. Announcement of trust fund (2.5 billion dollars) to be established to help privatize provincial banks.


The Treaty of Asuncion (1991), establishing the Southern Core Common Market (MERCOSUR) became effective.


The statistical tax of 3 percent was reimposed on all imports, with the exception of capital goods, fuel, and goods produced in the paper, computer, and telecommunications sectors. All goods imported from the member countries of MERCOSUR were also exempted. a3


Export rebates were reduced by 25%. a3


Provincial sales tax considered in exchange for lower social security contributions. Escelsa (Espirito Santo) privatized. Deposit Insurance Scheme was implemented to boost confidence in financial sector.


New rules for bank reserve requirements implemented. Announcement of plan to accelerate the privatization of hydraulic energy generator Yacireta and the Corpus Christi hydroelectric projects as well as 25% of Transportadora del Gas del Norte. 


Bank reserve requirement for checking and savings accounts lowered from 33% to 30% and the 2% reserve requirement for time deposits is eliminated.


The first prosecution under the IT laws.a4


Banking crises: suspension of 8 banks and collapse of 3 banks. Causes: devaluation in Mexico followed by withdrawal of foreign investors, increase in interest rates leading to capital losses of wholesale banks that had significant inventories of government securities, and inefficiencies in the Argentine banking system in period of consolidation.a2


A limited system of deposit insurance was introduced in response to the banking crisis.a8


The central bank announced the creation of a $6 billion emergency fund to strengthen the banking sector. Labor reform allows companies to reduce payroll expenses by firing workers without severance pay.t


Economy Minister Domingo Cavallo ousted.t


Tax increases on fuel and public transportation. Government announces plans to increase personal asset tax on holdings over $100,000 to 1%.


Income tax increase proposed.


Congress approves tax and fiscal agreement.


Labor laws weakened making it easier to hire/layoff individuals.


Standard and Poor's announces that it might increase sovereign debt rating.


Standard and Poor's raises sovereign debt rating to BB and upgrades 13 private companies to investment grade.


YPF permits employees to sell their 10% stake in the company.


The Supreme Court would approve an increase in local calling rates. The government approved a rate restructuring that will cut the price of long-distance and international calls. Concerns for the stability of the Brazilian real.


Bank shares dropped on August 8 when the U.S. 30-year Treasury yield surge to 6.6%.


Short selling was authorized at the Buenos Aires Stock Exchange in Telefobuca, Telecom, YPF, and Perez Compac. The government would sell 30-year debt in exchange for Brady bonds. 


Heavy selling in Hong Kong caused a domino effect in other emerging market. On a visit to Argentina, U.S. President Clinton announced he was pushing for fast-track authority to enter trade agreements.


The government pledged to limit the 1998 current account deficit to 3.8%, compared to 3.5% in 1997. Argentina's largest trading partner, Brazil, planed to cut spending and interest rates by four percentage points.


Removal of most entry barriers and branching restrictions of the banking sector.a14


Moody's described the financial sector as "weak." Brazil cut interest rates. Concerns about Asian crisis.


The IMF approved a three-year $2.8 billion line of credit to support Argentina's economic reform program. The major tax package would reduce by 50% the VAT tax on basic consumer goods. The top corporate tax rate would boost to 35% from 33% and reduce by 10% the social security contributions by employers. The 1997 trade gap was $4.9 billion.


The government would open the telephone market to competition by November 1999. President Carlos Menem sent a labor reform bill to Congress where he offered to retain union federation negotiating capacity in collective contracts.


The IMF called for measures to slow economic growth and rein in the trade gap. GDP is expected to grow between 6-7% in 1998. S&P reaffirmed Telefonica's "BBB-" foreign currency corporate rating.


Concern over the turmoil in Indonesia, financial problems in Russia, and the prospect of higher interest rates in the U.S. spread throughout Latin American equities market.


Oil price decrease.


The benchmark MERVAL index dropped to its lowest levels since 1995 due to concern over Russian and Asian economies. 


Limits on the net global position in foreign currency were eliminated.a3


An unexpected cut in U.S. interest rates coupled with optimism over an IMF-led Brazilian aid package boosted the IFCG and IFCI indexes for a second consecutive month.


Falling oil prices, sliding bond prices, and worries surrounding the  Brazilian economy weakened the outlook for the economy.


The devaluation of the Brazilian real cast a shadow over the Argentine equity market in January.


An agreement by OPEC members to curtail oil production and a cut in the 30-day prime rate. 
As the October 1999 presidential elections approach, Fernando de la Rua was elected as the Alianza party candidate while current President  Carlos Menem and Buenos Aires Governor Eduardo Duhualde are competing for the Peronist party nomination.


Spanish oil magnate Repsol made the largest takeover offer of $13.5 billion in Latin American  for the remaining shares of oil producer YPF. Repsol currently owns 15% of YPF and offered $44.78 per share on April 30, a 25% premium to the stock’s previous day closing price.


Macroeconomic figures were weak. GDP contracted 3.0% and unemployment rose to 14.5%. Export to Brazil declined significantly, sparking tensions with the neighboring country.


Peronist presidential candidate Eduardo Duhualde's declaration of his plan to impose a one-year moratorium on Argentine debt sent equities tumbling. He later retracted his comments and the markets stabilized.


President de la Rua, the former mayor of Buenos Aires, was elected, ending President Carlos Menem's 10-year Peronist party rule.


The passage of 2000 budget boosted trade as investors were confident that the new president would be able to lead the country out of a year-long recession.


The Fiscal Responsibility Law limited fiscal policies, and the currency-board system eliminated monetary intervention.  The government announced measures to improve tax revenue, curtail public spending, and restructure revenue sharing with the provinces.


S&P revised Argentina's sovereign debt outlook from negative to stable.


The Senate approved a controversial labor reform bill. Deflation continued. Government reduced salaries to cut spending.


Allegations that a number of senators received bribes in exchange for backing the April labor reform bill triggered a political crisis.


Vice President Carlos Alvarez resigned. The country failed to meet its IMF-mandated fiscal targets due to slower third-quarter growth and higher-than-expected interest rates. Spreads on its FRB Bonds increased to more than 600 basis points.


S&P lowered Argentina's local and foreign currency sovereign credit ratings. IMF-led coalition announced a US$39.7 billion aid package to prevent a debt crisis.


IMF bailout.


Deteriorated fiscal situation forced two economy ministers to resign and Domingo Cavallo took over as Economy Minister.


A market-based solution was sought for the government's near inability to service debt by swapping US$29.5 billion of short-term obligations for long-term bonds. But Argentines, unconvinced by the government's pledge to stick with the currency regime, began to withdraw huge amounts from the banking system.


US$8 billion IMF bailout package failed to prevent double-digit drops in tax revenues.


S&P lowered Argentina's sovereign rating to default status. The government responded by imposing restrictions on deposit outflows and capital flight.


Citizens protested the newly restructured government bonds and lack of access to bank deposits. Mr. Cavallo and President de la Rua resigned. Three more interim leaders followed before Eduardo Duhalde became president.


Argentina imposed capital controls, but ADR can still be traded


Roberto Lavagna was named as Argentina's sixth economy minister in 14 months.


Police assassinated three unemployed demonstrators. Throughout the latter part of 2002, worker and unpaid employee demonstrations in the provinces, especially in the northwest provinces of Salta, Jujuy, and Tucuman, were violently repressed. a16


Argentina failed to make a $809 million payment to the World Bank after weeks of negotiations over rescheduling terms were locked in impasse. Since last December,  Argentina  has frozen repayments on the private part of its $122 billion feign debt but until this month had managed to keep up to date on its obligations to the multilateral lenders.a20


The Supreme Court ruled that conversion to pesos was illegal. According to the Central Bank, approximately to 8,760 million US dollars are at stake. a17


NÚstor Kirchner became president of Argentina with a mere 22% of the vote.


Argentine finance officials reached an agreement with the International Monetary Fund (IMF) for a three-year, US$ 12.6 billion stand-by credit. Under the terms of the new arrangement, the government pledges to raise the consolidated primary fiscal surplus from 2.5% of GDP this year to 3.0% next year. a18


More than 130,000 marchers congregated in the centre of Buenos Aires to hear an impassioned speech demanding criminal-justice reform. a17


Argentina decided to make a $3.1 billion payment to the IMF, a retreat from a vow by Buenos Aires that it would not pay up unless the IMF sends signals it would approve an upcoming report on  Argentina 's economic progress as part of the 2003 accord.


Roberto Lavagna sent a "fiscal responsibility" bill to Congress. This aims to set limits on spending by provincial governments. a17


Argentina filed a shelf registration statement with the U.S. Securities and Exchange Commission, completing the documentation needed to seek regulatory approval in the U.S. for a debt exchange to restructure some $100 billion in defaulted debt. a12


Regulations on Foreign Investors


Restrictions: 1. No restrictions or limits on foreign investment or the repatriation of capital and profits. 2. Investment in financial institutions required approval by the national government. Investments in companies operating radio or television stations are not permitted.

Taxation: No tax on foreign investment.a5(first entry)


Restrictions: No restrictions or limits on foreign investment or the repatriation of capital and profits.

Taxation: No change.a5


No change through 2001.a5


Restrictions: Foreign investment is prohibited in a few sectors, including shipbuilding, fishing, border-area real estate, and nuclear power generation. a16

Taxation: Dividends received by non-resident shareholders of Argentine companies are exempt from income tax withholding to the extent they are distributed out of earnings previously taxed at the corporate level, and are subject to a 35% withholding tax to the extent distributed out of non-taxed earnings. a19


Restrictions: There is no restriction on foreign investment in the telecommunications, data transmission and Internet sectors. The Cultural Preservation Law (No. 25,750 passed on July 4th 2003) limited foreign ownership in media and other cultural firms—such as historical or scientific enterprises—to 30%. a17