On a tightrope: The political economy of Argentina in 1988–1989

When President Raúl Alfonsín entered office in 1983, crowds took over the streets, saluting the men who represented the much-anticipated return to democracy. Alfonsín was a charismatic, mild-mannered man from the center-left party Unión Cívica Radical (UCR) who had beaten the Peronists (Partido Justicialista), an unprecedented feat in a free election. The country had high expectations for the Alfonsín administration, which took power after seven years of a violent authoritarian regime that killed more than fourteen thousand people and left the country’s economy in ruins (Bethell Reference Bethell2011).

According to Adair (Reference Adair2020), the new president had two immediate challenges: the country’s foreign debt and consolidation of Argentina’s democracy. Under the junta, its economic team irresponsibly borrowed money from foreign lenders to placate the Argentine elite’s economic interests. After the Federal Reserve increased interest rates in 1981, Argentina’s debt with foreign banks ballooned from US$5 billion in 1973 to US$40 billion in 1982 (Adair Reference Adair2020). The country desperately needed help from the International Monetary Fund (IMF) to renegotiate its debt and develop a plan to manage the crisis. Simultaneously, Alfonsín faced considerable pressure to put on trial the military leaders responsible for the dictatorship and its failures, such as the Falklands War in 1982 (Smith Reference Smith1990).

By the 1980s, the glory days of the Argentine economy were long gone. Once the wealthiest in South America, the country had become mired in low productivity, debt, and growing poverty. Wages had fallen steeply since the early 1970s (Lewis Reference Lewis1992), the middle class was shrinking, and the private sector was weak. The public sector had seen tremendous growth in the postwar period, and state enterprises had jobs protected by labor laws and the fierce oversight of unions. However, rising costs and lack of investment created significant problems for these companies: State enterprises in Argentina, such as the Argentine Railways, were losing approximately US$5 million a day in 1983 (Lewis Reference Lewis1992).

Alfonsín had a popular mandate to carry out reforms to put Argentina’s economy back on track. However, his government struggled to find a viable path to deliver his vision, one that combined social justice and economic development. In his memoirs on the Alfonsín years, Torre (Reference Torre2021) made clear that the new president understood that to consolidate democracy in Argentina, his administration had to avoid the neoliberal model associated with Videla and Martínez de Hoz. His first economic team, led by Bernardo Grinspun, preferred a Keynesian model with solid hints of nationalism to mark a break with the dictatorship’s economic policies (Nelson Reference Nelson2017; Torre Reference Torre2021).Footnote ² Ronald Reagan and European leaders respected Alfonsín, whom they saw as a role model for a democratic and politically stable Latin America (Camou Reference Camou2009). Alfonsín was conscious of their views, and to preserve his status, he eschewed any radical actions that would run counter to the IMF’s interests, such as declaring a moratorium. The president’s decision to not confront the IMF put him at odds with Grinspun, who was fired in 1985.

Following Grinspun’s dismissal, Alfonsín appointed Juan Sourrouille as the new finance minister. Sourrouille had a Harvard degree, and experts saw him as a pragmatic Keynesian who deeply understood Argentina’s economic woes (Lewis Reference Lewis1992). The new finance minister had a bold plan to end inflation, restore confidence in the Argentine economy, and manage the debt problem. In 1985, Sourrouille unveiled the Austral Plan. In his view, a new currency, coupled with fiscal reforms, would stimulate a positive psychoeconomic cycle and generate the revenue needed to pay off foreign debt (Cortes Conde Reference Cortes Conde2013).

The Austral Plan was a massive success in its early months, lowering inflation by a staggering 585 percent in one year (Adair Reference Adair2020). However, without politically costly fiscal reforms, the government had to resort to inflationary policies to cover its expenditures and inflation skyrocketed again to 131 percent in 1987 (from 90 percent in 1986). In the end, the Alfonsín administration’s hands were tied by a challenging context that did not allow it to properly address its fiscal woes. After each revolt in the barracks, the military demanded new wage increases, which the government had no option but to concede for the sake of the fragile political situation (Adair Reference Adair2020).

Thus, by 1988, a weakened president and a beleaguered finance minister were desperately trying to put the economy back on track. The path toward even a small degree of stability was very narrow. Alfonsín understood that, first and foremost, he needed support from the G7 countries to strike a new deal with the IMF (The Economist 1988b). Moreover, his government needed to pursue reforms to restore fiscal stability and investor confidence. Finally, it was vital to export more agricultural products. Unfortunately, the Europeans and the IMF did not make a single concession. The latter wanted meaningful reforms, but Alfonsín and Sourrouille knew it was impossible to deliver them, having lost the congressional majority in 1987.

As finance minister, Sourrouille accepted the stalemate with the IMF. From 1988 onward, he focused on minimalist policies to avoid a total collapse of the Argentine economy. However, economic data showed that the collapse was already underway. By mid-1988, monthly inflation in Argentina was at 28.5 percent, against 10.9 percent in 1987. The poverty rate in Buenos Aires province shot up to 44 percent, the highest level of the century. Shantytowns known as villas miseria proliferated in the late 1980s, and endemic poverty became the norm (Lloyd-Sherlock Reference Lloyd-Sherlock1997). Even the once-affluent neighborhoods of Buenos Aires’ middle class struggled with stagnating wages and crumbling public services. Meanwhile, 60 percent of the country’s export earnings were devoted to debt payment, and income tax evasion stood at US$20 billion a year (Mead Reference Mead1988a).

In that chaotic scenario, the Peronist party had an early lead in the presidential race. After suffering a heavy defeat at the hands of UCR in 1983, the Peronists were reenergized and ready to retake power. At that moment, a new reformist wing of the party led by Antonio Cafiero promised a more centrist economic approach. In 1987, Cafiero became the governor of the Buenos Aires province, the most important in the country. Cafiero would have easily won the nomination in a typical year, but 1988 was anything but typical. The Peronist primary allowed all party members to choose the candidates for the first time, cutting down the influence of the party’s bosses. When the counting ended, Antonio Cafiero lost the nomination to Carlos Menem in one of the greatest political upsets in Argentina’s history (Adair Reference Adair2020; Mead Reference Mead1988b). The depth of the economic crisis made Menem’s populist appeal more enticing for the primary voters, which gave him a decisive edge over Cafiero.

Menem’s rhetoric was populist to the core, and his economic agenda, vague—with platitudes about wage increases (salariazo) and labor protection. The Peronist front-runner also clarified that debt payments and the privatization of state companies were not his priorities, and he even openly entertained the idea of a default (Levitsky Reference Levitsky1998). At the same time, Menem appealed to Argentina’s elites with promises of economic reforms of neoliberal inspiration (Adair Reference Adair2020). At that moment, it was difficult to know Menem’s real intentions, which added another layer of uncertainty to the future of the Argentine economy. After Menem’s nomination, the Argentine currency plunged, and foreign investors’ confidence in Argentina’s economy reached a new low (Financial Times 1988a). The last hope to stabilize the economy before the 1989 elections rested on a strong season of agricultural exports.

The 1980s were difficult years for commodity-exporting nations across the globe. From oil to wheat, international prices were low throughout the decade. In the context of the debt crisis, the low prices made servicing foreign debt even harder for developing nations. Despite decades of falling agricultural output, Argentina was still one of the world’s largest beef, wheat, and corn exporters (Fulginiti and Perrin Reference Fulginiti and Perrin1990). In 1987, a strong harvest gave Argentina a trade surplus of US$287 million. The government expected a US$500 million trade surplus in 1988 and 1989, which would help the ailing economy.

However, in May 1988, the first signs of a La Niña phenomenon started, and with it, the threat of drought became a significant concern for farmers. The main crops cultivated in the Pampa region, the country’s agricultural heartland, needed a steady flow of rain from June until October to grow abundantly. As the 1988 planting season ended, rainfall was well below average for that time of year, and drought only worsened.

To make matters worse, Argentines had lost faith in the Austral and the dollar was again in high demand (Roig Reference Roig2021). Combined with the reports about the drought’s impact on Argentine exports, these factors combined started a major financial panic in the early weeks of 1989 (Financial Times 1988b). As investors and wealthy Argentines sent their Dollars abroad, the economy collapsed. As a result, the Austral saw a devaluation of almost 250 percent between January and April 1989 (Lewis Reference Lewis1992).

After four consecutive months of drought and heat waves, in April 1989, the effects of La Niña weakened. The scheduled blackouts ended, and the presidential campaign was in full motion. In the later stages of the campaign, only a few pundits still believed that UCR’s candidate Eduardo Angeloz could still beat Carlos Menem. While most polls gave Menem the lead by a small margin, the excitement for him was much higher (Financial Times 1989). That impression became true on election day, when Menem easily beat Angeloz by ten points. Surprisingly, during the campaign, neither Angeloz nor Menem devoted any time to the drought or its possible causes. Both candidates preferred to emphasize agricultural policies to woo an important constituency in Argentina’s politics. In the end, both politicians were oblivious to the ecological crisis brought by the La Niña cycle and what it meant to the future of the country’s economic future.

To calm local and foreign stakeholders, Alfonsín called Menem for a meeting at the Olivos presidential mansion. Despite Alfonsín’s efforts of statesmanship to establish a common ground with Menem, persuading investors was a more challenging task. Influential foreign publications, such as The Economist, stated that Menem’s ideology was a mix of “Mussolini and Keynesianism” (The Economist 1989a). Other English-speaking publications were equally harsh, and adjectives such as mediocre were common in early coverage on him (Mead Reference Mead1989b).Footnote ³

Alfonsín was under immense pressure from all political wings to act decisively. Through trusted emissaries and friendly journalists, Menem signaled to Alfonsín that he was open to the idea of anticipating his inauguration. After the May revolt, Alfonsín told Menem that he agreed to start official talks on that matter. In the early weeks of June, both negotiating teams laid down their terms for an early power handover. The first president following the return of democracy resigned in disgrace, becoming the last victim of the 1988–1989 La Niña.

A tale of two droughts: The global drought of 1988 and its effects in Argentina

Argentina’s first experience with drought in 1988 was the news of water shortages in North America and low agricultural output there. Argentina celebrated these prospects because it meant that its grain would get a larger market share, with less US and Canadian grain on the market. However, celebration was premature, and a few months after the North American grain crops collapsed, a devastating drought hit Argentina.

In the spring of 1988, the agribusiness sector in North America started to worry about a possible drought. Dry and warm weather in the midwestern US and Canada were hurting all the major crops in that area. What was a concern in May had become an emergency by June. Important agricultural states, such as Illinois and Minnesota, got very little rain, a pattern that continued throughout the summer. The Chicago grain exchange responded rapidly, as futures prices for wheat and soybeans increased substantially (Ingersoll et al. Reference Ingersoll, Kilman and Kotlowitz1988). In a show of solidarity, both presidential candidates for the 1988 election, George H. W. Bush and Michael Dukakis, visited the states affected by the drought. This demonstration of empathy seemed to be especially important for Bush, who was trailing Dukakis on the polls in several farm belt states (Ingersoll and Farney Reference Ingersoll and Farney1988; Johnson Reference Johnson1988).

President Reagan immediately formed a task force to deal with the drought, which experts argued was the worst since the Dust Bowl. With the prices for agricultural staples soaring, the Reagan administration worried about how Americans would vote in November. The hope for the US government was that the other major grain producers could compensate for the lost crop so that the consumers would be less affected by higher grain prices. In that sense, countries such as Australia, Brazil, and Argentina were instrumental (The Economist 1988a; Financial Times 1988c).

In this context, the Argentine agricultural heartland played a pivotal role in helping the global grain market mitigate the losses incurred by North American farmers. The “Golden Triangle”—the three provinces of Buenos Aires, Córdoba, and Santa Fe—contributed significantly to the nation’s agricultural exports. Situated within the broader geographical region known as the Pampa Húmeda, or “Humid Pampa,” which spans eight additional provinces, the Pampa played an equally indispensable role in supporting the Argentine agribusiness sector by providing a diverse array of essential agricultural staples.

The Pampa grassland stretches from southern Brazil to the province of Buenos Aires, covering an area of seven hundred thousand square kilometers. The Pampa is one of the world’s most fertile areas for agriculture and livestock, comparable to the North American prairies and Ukraine’s chernozem. Summers in this corner of the globe are often warm and humid, and rainfall diminishes during the warmer months (Blue Planet n.d.). These characteristics make the Pampas one of the world’s most diverse biomes and a vital economic asset for Argentina, Brazil, and Uruguay.

In the past forty years, climatologists have realized the importance of the El Niño–Southern Oscillation (ENSO) cycle for weather patterns in South America. According to the National Oceanic and Atmospheric Administration (NOAA), the phenomenon happens when the average trade-wind patterns in the Pacific Ocean cease, affecting sea currents. In the El Niño phenomenon, warm water from the Pacific is pushed back east, toward the west coast of the Americas.

Meanwhile, with La Niña, the opposite phenomenon occurs—stronger trade winds push warm water toward Asia, leaving the waters of the Pacific coast of the Americas colder. While El Niño is often associated with increased rainfall and humidity in the Pampas, La Niña has the opposite effect. By the late twentieth century, grains and livestock represented 71 percent of Argentina’s exports, and the government was counting on both segments to overperform in order to achieve a trade surplus (Manrique et al. Reference Manrique, Julien Brun, Walter and Martínez-Alier2013).

A meaningful body of scholarship has analyzed how La Niña influenced droughts in the Pampas, and current academic research highlights the fact that the most severe droughts of the twentieth century in Argentina were often associated with an intense La Niña event. These same scholars argue that the 1988–1989 La Niña was among the strongest of the century. In their seminal study, Penalba and Rivera (Reference Penalba and Antonio Rivera2016) affirm that the southern summer of 1988–1989 saw a unique combination of colder waters in the Pacific and the Southern Atlantic acting simultaneously on Argentina’s coast. According to them, that combination was responsible for a stronger-than-usual La Niña event, causing the worst drought since 1962 in the process.

According to Minetti et al. (Reference Minetti, Vargas, Vega and Costa2013, 34), the Argentine Pampas have a regular yearly rainfall between 600 and 1200 mm, but the average falls to 300 mm and 600 mm in drought years, respectively. Based on available data, the 1988–1989 drought was caused by a La Niña phenomenon, which led to a rainfall anomaly that dramatically affected Argentina’s agricultural exports.Footnote ⁴

During the fall of 1988, there was no indication of an impending severe drought, as several provinces recorded approximately 488 mm of rainfall between April and May. This amount represented nearly 45 percent of the annual precipitation for the entire Argentine Pampa (La Nación 1988b). While provincial authorities were still grappling with the aftermath of recent floods, farmers were gearing up for the wheat harvest and the planting of coarse grains.

However, over subsequent months, weather patterns transformed dramatically. Most provinces in the Pampas experienced average rainfall of only 0 mm to 50 mm over four months, marking the driest winter since 1871. Furthermore, an exceptionally harsh winter brought a wave of frost that rendered the soil unsuitable for seed growth. This phenomenon, known as “black frost,” was caused by dry and frigid air, resulting in nighttime temperatures as low as –10°C. For instance, Santa Fe province witnessed seventy days of frost between May and August, which not only dried out the soil but also made the planting of maize impossible (Coomans Reference Coomans1988). Ultimately, the frosts during the winter of 1988 inflicted almost as much damage as the preceding lack of rain.

This atypical winter represented a setback, especially for small farmers and ranchers, like Héctor Solaberrieta in the Buenos Aires province. Solaberrieta owned a fifty-five-hectare property dedicated to cattle ranching and wheat cultivation. Because of the extreme cold, the pasture for his cattle diminished. Consequently, he had to sell most of his cattle at significantly reduced prices before they began losing weight. Moreover, providing the remaining herd with feed became prohibitively expensive, with a weekly forage supply costing US$46, a price beyond most farmers’ means (Saguier Reference Saguier1988). Therefore, it is not an exaggeration to say that the winter of 1988 proved disastrous for farmers and ranchers in Argentina. As the La Niña phenomenon strained the Argentine countryside even before the summer harvest season, the combined effects of the economic crisis and failed harvests placed farmers in an untenable position. Ultimately, their recovery hinged on a spring characterized by mild temperatures and consistent rainfall.

Hope was rekindled in the Argentine countryside during the spring, when the La Niña weakened and rainfall returned across the country. In those months, a few provinces found relief from the winter drought, while several others continued to grapple with its effects. Amid all the uncertainty, the La Pampa province was among the fortunate ones. After enduring a brutal winter, with temperatures dropping as low as –15°C, for ninety consecutive days, the planting of coarse grains suffered a severe blow. Fortunately, the province received approximately 120 mm of rain during the first thirty days of spring, compared to a meager 50 mm in the previous five months (Coomans Reference Coomans1988). While the winter drought affected the wheat harvest, there was still hope for other crops like maize, sunflower, and soy. Some much-needed rain finally arrived in other parts of the Buenos Aires and Chaco provinces, but relief remained elusive for most of the Pampas countryside.

The drought also took its toll on the Córdoba province, one of the country’s major producers of maize and soy. Moreover, it was a key hub for global agribusiness giants such as Cargill and Bunge. Collectively, the companies exported US$480 million annually, operating from their private ports in Córdoba (La Nación 1988a, 1988c). Although the province had borne the brunt of the winter drought, which affected maize and soy, large wildfires, sparked by unusually high temperatures, ravaged central and northern Córdoba in November. Wheat farms and pine forests, in particular, suffered extensive damage, with approximately 40 percent of the wheat harvest in those areas being destroyed. The combination of fire and drought proved equally devastating for livestock, resulting in the loss of twenty thousand cattle in the province. Local authorities estimated that it would take twenty years for the region’s environment to fully recover (La Nación 1989b).

While the Alfonsín administration attempted to downplay the crisis by asserting that the drought was a thing of the past and that the 1988–1989 harvest would be bountiful, events took a different turn. The rain that had relieved a few corners of the country in spring had essentially disappeared by November, as the La Niña phenomenon intensified once more. By the end of the year, dry and hot weather, influenced by zones of high atmospheric pressure, placed immense strain on Argentina’s freshwater supply (La Nación 1989b). To exacerbate matters further, the Alfonsín administration imposed even higher taxes on agricultural exports as part of its Spring Plan. In summary, by the conclusion of 1988, an enormous crisis was brewing in Argentina’s farmland, especially in the Pampas.

Nowhere were the effects of La Niña more pronounced than in the Chaco province, which endured temperatures nearing 40°C. The province experienced dry and dusty conditions that decimated all sunflower crops and resulted in the loss of six thousand tons of wheat (La Nación 1989f). Cattle ranchers fared no better, as the drought led to substantial losses, amounting to a staggering US$25 million. Chaco’s farmers had endured the worst drought in twenty years, following six consecutive years of flooding. Ultimately, the drought of 1988–1989 served as the final blow to Chaco’s agribusiness, and recovery would be a lengthy process.

Amid the raging wildfires in northeastern provinces and financial losses that pushed thousands of farmers and ranchers to the brink of bankruptcy, the influential Argentine Rural Confederation (CRA) found itself on a collision course with the Alfonsín administration. The CRA’s leaders demanded greater government intervention, especially in the form of a rescue package for farmers and ranchers. Furthermore, the CRA called for a unified exchange rate to the dollar and lower taxation. In many respects, the CRA’s claims were valid in asserting that the government did not adequately “value or appreciate the farmers” (La Nación 1988a). Given the lackluster response from Ernesto Figueras, the minister of agriculture, to the crisis that had engulfed the countryside, it appeared that the government was struggling to define a clear policy on this critical issue. Furthermore, there was no ecological thinking in Argentina’s political leadership, as both federal and provincial authorities could not fathom the massive scale of the climatic crisis that hit the country. During the summer of 1989, as the La Niña intensified, relations between the Alfonsín administration and the farmers deteriorated.

The land burns: Drought and crisis in 1989 Argentina

The drought was a significant blow to Argentina’s entire economy. Along with the drought and the heat came a long summer of power cuts and higher food prices. While in 1988 the crisis was mainly in the countryside, in 1989, its effects had rippled to urban centers as well. Consequently, people’s backlash against the Argentine elites and the Alfonsín administration culminated with one of the largest waves of social unrest ever seen in Argentina.

The year 1989 commenced much like 1988 had ended, with a scorching heat wave that affected nearly every province in Argentina. Temperatures reached 37°C in the capital area and 45°C in the countryside, compounding the hardships caused by the 1988 winter drought. However, the Alfonsín administration still failed to acknowledge the magnitude of the disaster faced by farmers and ranchers. As Lucy Etcheverry, a landowner in greater Buenos Aires, expressed, “No one cares about the farmers” (La Nación 1989a).

Between December and February, rainfall was significantly below average and unevenly distributed. This scenario spelled near disaster for the summer coarse grains, as significant losses for maize and sorghum became evident. Ranchers also confronted a dire situation due to the increasing need for water and forage for their livestock. In the province of Formosa alone, sixty thousand calves perished, leading to a loss of US$13 million (La Nación 1989p). Agricultural losses resulting from the extreme weather in the province were estimated to be at least double that amount, marking the most severe crisis in Argentina’s farmland since 1962.

The situation was equally dire in Argentina’s agricultural heartland, the province of Buenos Aires. Consecutive heat waves and a lack of rain led to extremely dry soil, endangering all summer crops. An example of the hardship faced by Buenos Aires is the town of Pigüé, located on the southwestern edge of the province. Pigüé relied heavily on sunflower and wheat cultivation, as well as intensive grazing. Provincial authorities reported that half of all cultivated areas in Pigüé were lost to the drought (Delfino Reference Delfino1989). Additionally, the local milk industry collapsed when livestock died from dehydration, and swarms of starving hares wreaked havoc in the countryside, devouring what remained of the sunflower plantations (Delfino Reference Delfino1989). The situation became so dire that the provincial secretary of agriculture decided to make Pigüé the first stop of his farmland tour to demonstrate his support for the farmers.

Córdoba was another province deeply affected by the summer of 1989. As one of the country’s primary maize producers, the summer months were crucial for the annual harvest. Analysts predicted that the local maize crop would suffer a 50 percent loss, and similarly dismal figures extended to other coarse grains grown in the province (Ruiz Reference Ruiz1989). Livestock also perished as the result of a severe shortage of forage brought on by the drought, as the winter supply of alfalfa ran out during the summer. Overall, local authorities estimated that Córdoba lost four million tons of cereals to the drought, dealing a severe blow to Argentina’s agricultural exports (Ruiz Reference Ruiz1989).

Amid the chaos wrought by the worst drought of the 1980s, the federal government’s response was slow and cumbersome. While farmers and ranchers tried to cope with the loss of most of their crops, the Alfonsín administration did not acknowledge the existence of a drought until February 1989. To the farmers’ dismay, the government’s argument relied on data from the National Meteorological Service, which claimed that the yearly average rainfall for 1988 was consistent with historical averages (De Paola Reference De Paola1989). However, the government ignored that almost 40 percent of the 1988 rainfall occurred between March and May, while dry conditions prevailed in the second half of the year (De Paola Reference De Paola1989). Thus, while Argentina technically did not face a drought, the reality on the ground was quite the opposite.

While President Alfonsín and his team appeared more concerned about inflation and the upcoming elections, it was up to provincial authorities and agrarian confederations to assist the farmers in their time of need. Felipe Solá, the agriculture secretary of Buenos Aires province, was the first to declare an agrarian emergency. Solá also toured the rural areas most affected by the drought while calling the federal government’s attention to the plight of the province’s farmland (La Nación 1989i). Meanwhile, several agrarian societies led by the CRA criticized Alfonsín for his lack of action. Daniel Boo, a CRA leader, reprimanded Alfonsín for not declaring a state of emergency in the countryside. Boo also claimed that the government was “unwilling to pass the Agrarian Emergency Law” in Congress, and the farmers’ associations would lobby congressmen to take action (La Nación 1989m).

Under these dire circumstances, the Agrarian Emergency Law became critical for the survival of farmers and ranchers. This legislation offered tax breaks for the 1989 fiscal year and provided affordable credit for farmers. Despite the tremendous pressure faced by the Alfonsín administration, the government declared a state of emergency only in March, and the crucial financial assistance began arriving later that year (La Nación 1989g). It is challenging to pinpoint a single explanation for the federal government’s sluggish response, especially during an election year. Indeed, the crisis caused by the drought was the last straw among a long list of grievances farmers had against Alfonsín. By the end of his presidency, a sour mood had developed between the government and farmers (Adair Reference Adair2020).

Ultimately, the worst-case scenario unfolded for farmers and ranchers during the summer of 1989 as La Niña intensified. A period of dry weather, heat waves, and wildfires had a devastating impact on Argentine farmland. Furthermore, its effects were compounded by the severe drought that afflicted Argentina during the winter of 1988. Unfortunately, rainfall patterns returned to normal only in late March. It was then that the scale of the losses suffered by Argentine farmers became clear. Due to the drought, the seeded area for the 1988–1989 harvest was the smallest it had been in twenty years. Moreover, a preliminary analysis from the government showed losses for the maize and wheat harvests stood at 45.7 percent and 11.1 percent, respectively (La Nación 1989f; Mead Reference Mead1989c). Finally, the loss of agricultural exports amounted to US$1.7 billion, delivering a severe blow to the Argentine economy and exacerbating its crisis (La Nación 1989f; Mead Reference Mead1989c).

Data from the UN Food and Agriculture Organization (FAO) sheds light on the actual scale of the agricultural damage. Its database (FAOSTAT) offers a broad perspective based on official numbers from the Argentine government. Back then, the primary commodities exported by Argentina were, in order of importance, corn, wheat, soybeans, beef, sorghum, sunflower seed, and linseed. The data show that almost all these commodities saw a significant decrease in their yield during the summer of 1988–1989 (FAO).Footnote ⁵

The drought especially affected cornfields, as corn is a crucial export crop for Argentina. Because of its biological characteristics, corn is highly susceptible to drought (Jozami et al. Reference Jozami, Montero Bulacio and Coronel2018), which directly affected all corn producers in Argentina. Data from FAO pointed to a 50 percent loss of the total corn yield in 1989 compared to the decade’s average yield. It was the most extensive loss among any of the leading commodities in the analyzed period and represented a substantial blow to Argentine’s exports (FAO).

Soybeans also took a big hit. In the 1980s, Argentina was still consolidating its position as a meaningful soybean producer in the global market. From 1983 until 1988, the Argentine output for this commodity increased by 350 percent. Once again, data pointed to a steep decrease of 30 percent in 1989, as compared to the 1988 total yield (FAO). Soy was a rising star in the agricultural world of the 1980s, and its demand soared around the globe. The country was well positioned in that market, considering that the Argentine conglomerate Bunge y Born was a world leader in the soybean trade (The Economist 1988c). Thus, soybeans were among the surest ways for Argentina to guarantee a trade surplus, and the losses from the drought were hugely consequential.

Other agricultural staples that fell significantly in 1989 were sorghum and linseed. Sorghum was still important because of its meaningful sales volume to foreign markets, while linseed was an old and established commodity in Uruguayan and Argentine farmland. In this case, the 1989 drought wiped out sorghum crops by 70 percent and linseed by 20 percent (FAO). Thus, Argentina faced a severe cut in its most crucial export commodities due to the La Niña, which combined with capital flight and high inflation, led the country into a deeper economic crisis.

In the summer of 1989, the drought extended its reach to the urban centers of Argentina. As the La Niña phenomenon intensified, heat waves exacerbated the challenges faced by a population already grappling with high inflation, low wages, and rising crime rates. In an economic landscape where each Austral $1 generated by agribusiness had a ripple effect, creating three more in commerce, the looming collapse of the summer harvest painted a bleak picture, foreshadowing a deep recession (La Nación 1989c). This confluence of factors triggered political and social upheaval, culminating in a wave of looting that rattled the nation and ultimately led to the president’s resignation.

At the start of the year, the residents of Buenos Aires experienced the full force of La Niña as a scorching heat wave pushed temperatures to a sweltering 37°C. While the more affluent sought refuge in posh beach resorts like Punta del Este and Mar del Plata, those grappling with poverty sought respite by swimming in the heavily polluted waters of the River Plate (La Nación 1989k). Despite the oppressive heat, the people of Buenos Aires endeavored to maintain their daily routines. However, the drought had caused river levels to plummet to historic lows in Argentina, southern Brazil, and Paraguay, straining hydropower dams that struggled to meet the surging demand for electricity. Consequently, the country experienced widespread power outages, further complicating life in urban centers. By late January, the situation had deteriorated to the point that the government felt compelled to implement a national blackout schedule to ration the electricity supply (Adair Reference Adair2020; The Economist 1989b).

Hydropower dams represented about 18 percent of the country’s electricity supply (Royon et al. Reference Royon, Garibotti, Garavaglia and Ronco2021). Even before the drought, blackouts were frequent in the Buenos Aires province. However, in December 1988, they became longer and more frequent. With its electric grid facing a complete meltdown, most Argentines had dinner under candlelight (Economist 1989b). Under the schedule, imposed on almost every household in Argentina, a three-hour blackout was followed by six hours with power.

The precarious state of the national power grid can be attributed to a lack of investment in energy generation. By the late 1980s, Argentina remained heavily reliant on fossil fuels for electricity generation. Most of its power plants dated to the 1950s and 1970s, equipped with turbines obtained through questionable trade arrangements with countries from the Soviet bloc. Despite a 153 percent increase in electricity consumption from 1970 to 1989, the country had failed to modernize and expand its national grid (La Nación 1989h). A notable incident involving a Czech turbine at the Luján de Cuyo power station prompted the Alfonsín administration to prioritize hydropower in its energy strategy. Unfortunately, the ongoing debt crisis prevented the president from investing in the much-needed new dams, leaving the existing hydropower facilities to bear the overwhelming burden of surging demand.

During the January heat wave, the national power grid reached its breaking point as outages grew in frequency and unpredictability. Argentines were forced to contend with myriad challenges during this period. A poignant example is Luisa Grossi, a seventy-six-year-old pensioner living on the ninth floor whose frail health rendered her unable to navigate the stairs (La Nación 1989n). As power outages became more common, she found herself largely confined to her home, struggling to procure essential items for survival. The tumultuous days in the national capital witnessed surreal scenes, like doctors and dentists working in dimly lit barbershops to examine X-rays and chaotic traffic after the system-wide failure of traffic lights across the city (La Nación 1989n).

The energy crisis prompted a halt in commercial activities, affecting urban grocers significantly, as refrigeration was compromised. Essential services, including medical offices, hospitals, and supermarkets, faced daily partial closures due to scheduled outages. Financial and banking services also grappled with operational difficulties, incurring estimated losses of US$42 million per day (La Nación 1989o). The power outages alone cost the nation roughly US$1 billion in lost trade, adding another heavy blow to an economy already deeply embroiled in crisis.

Moreover, the disruption of the urban water supply resulted from the power outages that paralyzed water pumps throughout the city, directly affecting the efficiency of water treatment stations in Buenos Aires. This underexplored facet of the water crisis contributed to a surge in bacterial diseases among individuals who consumed contaminated water. Hospitals in the Burzaco and Claypole neighborhoods of greater Buenos Aires bore the brunt of this situation, with an average of 150 patients per day seeking treatment for food and water poisoning caused by the power outages (La Nación 1989p).

As the sweltering heat, power shortages and high inflation eroded the population’s morale during the summer of 1989, the mix of revolt and hopelessness became widespread, encapsulated by this passage in Mariana Enriquez’s (Reference Enriquez2016) short novel Los años intoxicados: “Our mothers cried in the kitchen because they didn’t have money or they didn’t have electricity, or they couldn’t pay the rent or inflation had bitten their salary until they couldn’t afford anything more than cheap bread and meat. However, we didn’t feel sorry for it; we only thought about things as stupid and ridiculous as the lack of electricity.”

Ultimately, the power outages exposed the frailty of Argentina’s infrastructure, laying bare the consequences of a decade-long debt crisis and government mismanagement. The nation stood vulnerable to extreme weather events, such as those experienced during the 1988–1989 La Niña, with the severe disruption of commercial activities exacerbating an already precarious economic crisis, pushing Argentina perilously close to insolvency. Additionally, the most vulnerable segments of the population suffered from consuming contaminated water and tainted food, resulting in a silent health crisis at the time.

The disruption caused by the drought had a direct impact on inflation, particularly on food prices. The countryside’s crisis severely affected staple items of the Argentine diet, such as wheat, beef, and maize. As cattle herds dwindled and crops were lost, the food supply dwindled during the summer of 1989, resulting in food inflation rising at a staggering rate of 10 percent per week (La Nación 1989 l). Furthermore, with supply chains growing increasingly unreliable, prices for similar items fluctuated dramatically between provinces, contributing to the uncertainty and confusion experienced by the population. These unstable prices, coupled with stagnant wages, set the stage for a potential showdown between the populace and the government, with the latter fearing the onset of a full-blown social crisis.

Even as Argentines expressed their frustration toward supermarket chains, local grocers found themselves grappling with the challenges posed by outages and skyrocketing inflation. The daily blackouts had instilled fear among Argentines, deterring them from purchasing refrigerated or frozen goods. Butchers in Buenos Aires reported a 20 percent decline in sales during the early weeks of January, resulting in significant losses for this segment (La Nación 1989l). Changing consumption patterns led Porteños to buy perishable goods solely for daily consumption, steering clear of refrigerators. Inflation and the power outages also dealt a substantial blow to larger grocers, as the purchasing power of Argentines dwindled. For instance, Disco, one of Argentina’s largest supermarket chains, saw its profits plummet by 50 percent during the peak of the January heat waves (La Nación 1989 l).

Relief from the heat and drought finally arrived in Buenos Aires on Good Friday, when a torrential downpour drenched the city. However, even this rainfall failed to bring solace, as the storm ranked among the worst of the decade, leaving a trail of death and destruction in its wake. The city, inundated with an impressive 158 mm of rain in just a few hours, witnessed four fatalities and 1,400 individuals losing their homes (La Nación 1989j). The suburb of Tigre faced a flash flood that impacted residential areas, necessitating emergency rescues of 350 people (La Nación 1989d). Other provinces, such as Santa Fe and Córdoba, also grappled with the storm’s aftermath, exacerbating the burdens faced by an already-beleaguered population.

By April 1989, inflation had reached unprecedented levels, with prices for essential food staples like pasta and beef surging by 15 percent and 13 percent, respectively, each week (La Nación 1989e). The specter of looting loomed ominously on the horizon, driven by a long-standing tradition of widespread protests in Argentina. However, with national elections slated for May, the Alfonsín administration lacked a robust mandate to advance urgent structural reforms and woo Argentina’s creditors in a bid to alleviate the crisis.

In this challenging context, the wave of looting that swept across the country in May marked a catastrophic year for Argentina. Desperate Argentines rioted, as they could no longer bear the burden of hyperinflation, meager wages, and hunger. These riots plunged the nation’s largest cities into chaos, despite efforts by law enforcement. Grocers took matters into their own hands, forming vigilante groups and erecting barricades at their stores (Adair Reference Adair2020).

Desperate large crowds all over the country started looting supermarkets and malls in the early weeks of May. The city of Rosario saw the worst episodes during those chaotic weeks. The rage of the looters in Rosario was so intense that a woman died in one supermarket smashed under a giant shelf toppled down by the mob (Mead Reference Mead1989a) The police were overwhelmed, and Alfonsín had to call the army to restore state control in the country. Rosario saw the highest death toll in the entire nation, with sixteen deaths during the worst days of looting.

As demonstrated in this segment, the extreme weather events brought about by the La Niña phenomenon had a direct and profound impact on Argentina’s economy and society between 1988 and 1989. The intensity of these events plunged the countryside into chaos, with the dry winter of 1988 giving way to an even drier spring and summer. Unusual weather patterns, attributed to La Niña, led to the collapse of the summer harvest and the country’s livestock, directly affecting the food supply during a period of rampant inflation. Meanwhile, mounting losses weighed heavily on farmers and ranchers, as the Alfonsín administration struggled to organize a timely rescue package, leading to a loss of support from the farming community just before the general election.

As La Niña intensified during the summer, the crisis that was initially confined to rural areas finally reached the urban centers. Declining river levels precipitated a hydropower crisis, resulting in the collapse of the national power grid. As a solution, the government resorted to scheduled power outages to manage the energy supply, effectively bringing cities to a standstill and further debilitating Argentina’s already-fragile economy. Ultimately, this convergence of chaos led to one of the most severe waves of social unrest in Argentina’s history, underscoring the highly disruptive power of extreme weather events on modern societies.

Conclusion: Unrelenting storm

As we approach the end of the first quarter of the twenty-first century, there are disconcertingly few indications that humanity’s collective efforts to limit global warming to 1.5°C by 2050 will succeed. Each passing year sets new temperature records, solidifying climate change as an inescapable reality. Consequently, the El Niño and La Niña cycles grow more intense and unpredictable. When coupled with the already-formidable challenges of inequality and populism, we find ourselves facing a toxic amalgamation of factors that may lead to a severe cycle of crises over the coming decades.

Examining the Argentine case reveals the potential for extreme weather to disrupt economic stability and incite political turmoil. In-depth analyses of the intricate interplay between extreme weather and economic crises are imperative, given the challenges that lie ahead in a world increasingly shaped by climate change. According to a recent United Nations report on climate change (IPCC 2023), events reminiscent of the 1988–1989 La Niña in South America are bound to recur.

Over the past two years, Argentina experienced its worst drought since 2009, attributed to another La Niña cycle (La Nación 2023). Mirroring the events of the 1980s, the drought significantly disrupted food prices and energy supplies, exacerbating poverty rates and inflation. Parallel to 1989, a severe crisis coincided with a drought during an election year. President Alberto Fernandez (2019–2023), much like to Alfonsín before him, found himself weakened by economic challenges, marking his legacy with adversity. Once again, the race for the presidency was wide open, offering an opportunity for an outsider like Javier Milei to secure victory in the 2023 presidential elections, echoing the circumstances that propelled Carlos Menem to power thirty-four years ago. Like Menem before him, Milei combines a charismatic and populistic leadership style with a radical neoliberal economic platform. The new president lacks any ecological thinking, much like his predecessors. To his own peril, he may find out soon how devastating a La Niña–induced drought can be for Argentina’s economy and his own political survival.

Given these circumstances, it is crucial to comprehend how climate change will influence Southern Oscillation cycles and subsequently impact South America’s weather patterns—a region perpetually grappling with severe economic inequality and low productivity. Collaborative research in multidisciplinary teams should scrutinize the socioeconomic repercussions of severe droughts caused by La Niña, paving the way for actionable policies capable of mitigating the effects of increasingly unpredictable weather.