Carlos Menem, who during 10 years as Argentina’s flamboyant, scandal-ridden president engineered a stunning economic turnaround only to be blamed for an even more dramatic financial collapse after he left office, died Feb. 14 at a clinic in Buenos Aires. He was 90.
Argentine President Alberto Fernández confirmed the death in a statement. The cause was a urinary tract infection.
Menem, who had been ailing for several months, was serving as a national senator until his death.
“There are Argentines who will never forget what Menem did for this country,” Argentine journalist and author Horacio Verbitsky once told The Washington Post. “And there are Argentines who will never forgive what Menem did to this country.”
Amid a backdrop of hyperinflation and labor strikes, Menem, a popular provincial governor with bushy mutton-chop sideburns, breezed to victory in the May 14, 1989, presidential election. Outgoing President Raúl Alfonsín handed over power five months early on July 8, 1989, to give Menem a head start in pulling the economy out of its tailspin.
“There is no other way to put it. Argentina is broken, devastated, destroyed, razed,” Menem said in his inaugural address. “From these ruins, we will build the country we deserve.”
Menem then surprised his followers by turning his back on the pro-labor, big-government orthodoxy of his Justicialist Party, a movement inspired by his hero, former strongman and president Juan Perón. Instead, Menem sought to deregulate the economy, open up the country to foreign investors, expand trade and pay off government debt.
In what Menem described as “surgery without anesthesia,” he moved swiftly to privatize state companies, roll back the power of labor unions, cut state subsidies and fire thousands of government employees.
These fiscally conservative policies, which were endorsed by the International Monetary Fund and became known as “the Washington Consensus,” would later take hold across much of Latin America in the 1990s.
But Menem’s key move, pushed by his influential economy minister, Domingo Cavallo, was to legally peg the Argentine peso to the U.S. dollar on a one-to-one basis in 1991.
The “convertibility plan” aimed to stabilize prices and restore confidence in the local currency following a period when out-of-control inflation forced grocery stores to announce price changes over loudspeakers because clerks couldn’t re-mark all the merchandise fast enough.
Although unemployment rose, annual inflation fell to the low single digits. With state-run banks, airlines, oil companies, railroads and utilities on the auction block, an estimated $24 billion in foreign investment flowed into the country in the early 1990s. Between 1991 and 1997, the economy grew by 6.1 percent annually, the highest rate in South America, and Argentina was hailed as a model for the developing world.
Menem’s neoliberal economic policies infuriated left-leaning Peronists, as members of the Justicialist Party are known. But Menem was more pragmatist than ideologue.
Even though he had been unjustly imprisoned by Argentina’s 1976-83 military junta, Menem sought to improve relations with an army that had staged three rebellions against his predecessor.
So, on Dec. 29, 1990, Menem issued a blanket amnesty to the leaders of the military dictatorship that waged a dirty war against leftists, union leaders and other political opponents in which between 9,000 and 30,000 people were either killed or disappeared.
Alfonsín, the former president, called it “the saddest day in Argentine history.” But the amnesty brought Menem a measure of stability and allowed him to focus on the economy.
An enthusiastic free-trader, Menem helped negotiate the South American Common Market, or Mercosur, a customs union with Uruguay, Paraguay and traditional rival Brazil. He restored full diplomatic ties with Great Britain, relations that had been suspended since the 1982 Falkland Islands War.
He played tennis with President George H.W. Bush, deployed troops and ships to the first Persian Gulf War, and proved such a staunch U.S. ally that one of his foreign ministers, Guido di Tella, quipped that Argentina was pursuing “carnal relations” with Washington.
By then, Menem had trimmed his sideburns, ditched his loud clothes for French-cut suits, and was enjoying the perks of high office. When an Italian motorcycle company gave him a $100,000 red Ferrari, Menem at first rejected advice to give it back, famously declaring, “The Ferrari is mine, mine, mine!” (It was later sold at public auction.)
Menem also relished his reputation as a Southern Cone Valentino. He kicked his first wife, Zulema Yoma, out of the presidential palace and later married Cecilia Bolocco, a Chilean TV celebrity and former Miss Universe who was 35 years his junior. He publicly flirted with actresses and belly dancers, performed the tango on television, and mused aloud about forming a nearly all-female Cabinet.
Riding a wave of popularity and demands that he stay in office, Menem reached a deal with the opposition Radical Civic Union party in 1993 to change the Constitution to allow sitting presidents to run for one additional term. He was easily re-elected in 1995.
During his second term, Menem seemed to lose his touch. He was widely perceived as ignoring government corruption, especially malfeasance surrounding the lucrative sales of state-run companies. He packed the country’s Supreme Court with allies, adopted a more authoritarian governing style, and tried unsuccessfully to secure another Constitutional change so he could stand for a third consecutive term.
Moreover, his management of the economy – which had been Menem’s great strength – was called into question amid a series of external shocks.
First came financial crises in Mexico and Russia. Then, Brazil devalued its currency in 1999, and investors in Argentina found their dollars would go farther in that neighboring country. Foreign investment began to dry up, exports tumbled and Argentina’s economy sank into recession.
Through it all Menem refused to scrap the peso’s one-to-one peg with the U.S. dollar, even though the exchange rate was no longer in sync with prevailing economic conditions. The policy left his government with few tools to respond.
To goose the economy, the Menem government resorted to extensive borrowing, but that sent up domestic interest rates and forced many businesses to close. All along, Wall Street investment banks and credit-rating agencies provided glowing accounts of Argentina.
Menem left office in December 1999. Two years later, Argentina defaulted on its $155 billion public debt, the largest such default at the time by any country in history. Amid riots, bank failures and massive layoffs that pushed up the poverty rate to 58 percent and provoked an outbreak of crime, many analysts pinned a large share of the blame on Menem.
“The reasonable thing would have been for Menem to start implementing changes. So in that sense he was absolutely responsible for the crash,” said Ariel Armony, an Argentine who serves as the University of Pittsburgh’s senior director of international programs and director of the University Center for International Studies.
Carlos Saúl Menem was born July 2, 1930, in Anillaco, a town in the poor and sparsely populated northwest province of La Rioja. His parents were Syrian immigrants. His father acquired a store and vineyards and put all four of his sons through university.
A Sunni Muslim by birth, Carlos Menem converted in his youth to Catholicism. He received a law degree in 1958 from the National University of Cordoba, joined Perón’s Justicialist Party and was elected governor of La Rioja in 1973.
In 1976, military officials overthrew the government of Isabel Martínez de Perón, who had replaced her husband, Juan Perón, in the presidency following his death in 1974. The new junta sacked all the nation’s elected governors and began rounding up Peronists, among them Menem, who spent the next five years in prison.
The experience left him “fortified in his character and determination,” Eduardo Menem, Carlos’ brother, told the Los Angeles Times in 1991. “When I’d visit him, he would always tell me, ‘When I get out of here I will become president.’ “
After democracy was restored in 1983, Menem was re-elected governor of La Rioja and won a third term in 1987. Campaigning as a successful outsider who was in touch with the neglected people of Argentina’s interior, he defeated a more-establishment politician to win the Justicialist Party nomination for president in 1988.
When Menem stepped down as president, he was dogged by investigations of official misconduct and saw some of his key decisions overturned.
In 2005, Argentina’s Supreme Court ruled that Menem’s amnesty protecting military officials was unconstitutional. Gen. Jorge Videla and other leaders of the 1976-83 junta were later convicted of crimes against humanity and imprisoned.
In 2013, Menem was sentenced to seven years in prison for his involvement in a scheme to smuggle Argentine weapons to Ecuador and Croatia in the early 1990s, a time when those countries were under an international arms embargo. Two years later, Menem received a four-year sentence for embezzling public funds during his presidency. But he remained a free man because he had, by then, been elected senator of La Rioja province, a post that provided him with immunity from incarceration.
Another black mark was Menem’s mishandling of a government probe into the 1994 bombing of a Jewish community center in Buenos Aires that killed 85 people and injured more than 300. It was the most deadly act of terrorism in the country’s history, but the crime was never solved.
Until the end of his life, Menem provided fodder for gossip magazines. At age 73, he fathered a child with Bolocco before they divorced in 2009. A son from his first wife, Carlos Menem Jr., died in a helicopter crash in 1995.
Menem made a final bid for the presidency in 2003, but with polls predicting he was headed for a crushing defeat in the presidential runoff, he withdrew from the race.