hat arrangement opened the way for Menem to seek and win reelection with 50% of the vote in the three-way 1995 presidential race.2 The 1995 election saw the emergence of the moderate left FREPASO political alliance. This alternative to the traditional two main political parties in Argentina is particularly strong in Buenos Aires, but as yet lacks the national infrastructure of the Peronist and Radical parties. In an important development in Argentina's political life, all three major parties in the 1999 race espouse free market economic policies. Argentina held mid-term congressional elections in October 1997. The opposition UCR-FREPASO alliance made major gains in the number of seats it held and deprived the Peronists of an absolute majority. The elections are widely seen as setting the stage for the 1999 presidential race. The government's pro-market policies remain unchallenged, but continued high unemployment and growing public concern over corruption have hurt the government's standing in public opinion polls.Chapter 1: EconomyThe biggest problem that the Argentina's economy has is inflation. Inflation is when prices of certain item or items increase and continue to increase. High inflation causes prices to rise faster than people's income can handle. This hurts the Argentina economy because high prices means that people cannot afford to buy things like food, clothes, furniture, and other accessories they need for their household and also to survive, as well as making foreign goods cheaper. In 1998, increasing investor anxiety over Brazil, its largest trading partner, produced the highest domestic interest rates in more than three years and slowed growth to 4.3%. Despite the relatively high level of growth in recent years, double-digit unemployment rates have persisted, largely because of rigidities in Argentina's labor laws. The Mexican peso crisis produced capital flight, the loss of banking system deposits, and a severe, bu...
