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The Argentine economic crisis was a financial situation, tied to political unrest, that affected [http://en.wikipedia.org/wiki/Economy_of_Argentina Argentina's economy] during the late 1990s and early 2000s. In [http://en.wikipedia.org/wiki/Macroeconomics macroeconomical] terms, the critical period started with the decrease of real Gross Domestic Product (GDP) in 1999 and ended in 2002 with the return to GDP growth, but the origins of the collapse of Argentina's economy, and also the effects on the country's population, can be traced back to both poor economical and political decisions.

Argentina was subject to military dictatorship (alternating with weak, short-lived democratic governments) for many years, that resulted in a number of significant economic problems. During the National Reorganization Process (1976–1983) huge debt was acquired for money that was later lost in unfinished projects, the Falklands War, and the state's takeover of private debts; in this period, a neoliberal economic platform was introduced. By the end of the military government the country's industries were severely affected and unemployment, calculated at 18% (though official figures claimed 5%), was at its highest point since the [http://www.english.illinois.edu/Maps/depression/depression.htm Great Depression].

In 1983, democracy in the country was restored with the election of president Raúl Alfonsín. The new government's plans included stabilizing Argentina's economy including the creation of a new currency (the austral, which was the first of its kind not to carry the word peso as part of its name), for which new loans were required. The state eventually became unable to pay the interest of this debt and confidence in the austral collapsed. Inflation, which had been held between 10 and 20% per month, spiraled out of control. In July 1989, Argentina's inflation reached 200% that month alone, topping 5,000% for the year. During the Alfonsin years unemployment did not substantially increase but real wages fell by almost half (to the lowest level in fifty years). Amid riots President Alfonsín resigned five months before ending his term and Carlos Menem, who was already President-elect, took office.

1990s: Following a second bout of [https://burton.house.gov/posts/Government-Spending-and-Hyperinflation hyperinflation], in late 1990 Domingo Cavallo was appointed Minister of the Economy. In 1991 he took executive measures that fixed the value of Argentine currency at 10,000 per U.S. dollar. Furthermore, any citizen could go to a bank and convert any amount of domestic currency to U.S. dollars. To secure this "convertibility" the Central Bank of Argentina had to keep its U.S. dollar foreign exchange reserves at the same level as the cash in circulation. The initial aim of such measures was to ensure the acceptance of domestic currency because, after the 1989 and 1990 hyperinflation peaks, some people had started to reject it as payment and demanded U.S. dollars instead. This regime was later fixated by a law (Ley de Convertibilidad) which restored the peso as the Argentine currency with a monetary value tied to the value of the U.S. dollar. 

As a result of the convertibility law inflation dropped sharply, price stability was assured and the value of the currency was preserved. This raised the quality of life for many citizens who could now afford to travel abroad, buy imported goods or ask for credit in dollars at very low interest rates.

Argentina still had external debts to pay and needed to borrow more money for these. The fixed exchange rate made imports cheap, producing a constant flight of dollars away from the country and a progressive loss of Argentina's industrial infrastructure which led to an increase in unemployment.

In the meantime, government spending continued to be high and corruption was rampant. Argentina's public debt grew enormously during the 1990s and the country showed no true signs of being able to pay it. The IMF, however, kept lending money to Argentina and postponing its payment schedules. Massive tax evasion and money laundering explained a large part of the evaporation of funds toward offshore banks. A congressional committee started investigations in 2001 over accusations that the Central Bank of Argentina's governor, Pedro Pou, as well as part of the board of directors, had failed to investigate cases of alleged money laundering through Argentina's financial system. Clearstream was also accused of being instrumental in this global financial process.

Other countries, such as Mexico and Brazil (both of which also happen to be important trade partners for Argentina), faced economic crises of their own leading other countries to mistrust Latin American countries moneywise and affecting the overall economy of the region. For more information on economic crisis please check [http://survival.crisiswealth.com/economic-crisis economic crisis].The influx of foreign currency provided by the privatisation of state companies had dried up. After 1999 Argentine exports were harmed by the devaluation of the Brazilian real and a considerable international revaluation of the dollar effectively revaluing the peso against its major trading partners, Brazil (30% of total trade flows) and the euro area (23% of total trade flows).

By 1999, newly elected President Fernando de la Rúa faced a country where unemployment had risen to a critical point and the undesirable effects of the fixed exchange rate were showing forcefully. In 1999 Argentina's gross domestic product (GDP) dropped 4% and the country entered a recession which lasted three years ending in a collapse. Economic stability became economic stagnation (even deflation at times) and the economic measures taken did nothing to avert it. In fact the government continued the contractive economic policies of its predecessor. The possible solution (abandonment of the exchange peg, with a voluntary devaluation of the peso) was considered political suicide and a recipe for economic disaster. By the end of the century, a spectrum of complementary currencies had emerged.

While the provinces had always issued complementary currency in the form of bonds and drafts to brave shortages of cash, the maintenance of the convertibility regime led to this being done in an unprecedented scale. This led to their being called "quasi-currencies", the strongest of them being Buenos Aires province's Patacón. The national state also issued its own quasi-currency—the LECOP. 

Criticism of the IMF: The International Monetary Fund suffered no discounts in its part of the Argentine debt. Some payments were refinanced or postponed on agreement. However, the authorities of the IMF at times expressed harsh criticism of the discounts and actively lobbied for the private creditors.