Who is Domingo Cavallo?

  • Between 1976 and 1983 a Military Junta forcibly seized power in Argentina. These eight years of dictatorship, characterized by bloody repression, ended with 30,000 ‘disappeared’ people, thousands of prisoners, and a society changed forever. But the dictatorship also brought about less-known changes in the country’s economic structure. To start with, the external debt almost quadrupled, rising from 12 billion in 1978 to 43 billion dollars in 1982. At the end of this government, Domingo Cavallo became Director of the Central Bank of Argentina (Banco Central de la República Argentina), where he implemented financial policies that allowed Argentina’s main private enterprises to transfer their debts to the state, transforming their private debt into public obligations to be paid by the Argentine people. In 1983, more than 200 firms (30 economic groups and 106 transnational enterprises) transferred great part of their 17 billion-dollar debt to the Argentine society, thanks to secured exchange rates, which Domingo Cavallo put into practice in the early 1980s. This mechanism turning private debt into liabilities of the state continued throughout the Government of Raúl Alfonsín (1983-1989).

  • In 1989 Carlos Saúl Menem was elected President of Argentina, and he governed until 1999. His presidential terms were characterized by high corruption. Between 1989 and 1991, Domingo Cavallo was the Minister of Foreign Relations. In 1991, he was appointed Minister of Economy (a post he held until July 1996). He implemented the famous convertibility plan that pegged the ‘peso argentino’ to the dollar. During this period Cavallo promoted the privatization of Argentina’s public enterprises in a highly irregular process. These companies were sold for ridiculously low prices in comparison with their real value, and it has been proved since that the sales’ procedures were ridden with corruption. Moreover, the regulatory frames imposed on the privatized enterprises are weak and therefore completely unfavorable to the customers of these firms. Because of these policies approved under Cavallo’s leadership, the privatized enterprises have obtained extraordinary profits amounting to more than 9 billion dollars until late 2000. In addition, these firms contributed to the rise in unemployment, firing 7 out of 10 of their employees.

  • In 1999 Fernando de la Rúa was elected President of Argentina. Cavallo, who had been elected Congress Representative for the City of Buenos Aires in 1997, was appointed Minister of Economy once again in March 2001. The Argentine Congress granted him "extraordinary powers," and he promised to solve the economic crisis and to take Argentina out of the longest economic recession in its history. To 'balance' the public accounts, he reduced the already low salaries of the public sector (which produced a decrease of wages in the private sector as well). This policy of contraction worsened an already serious economic recession. In the legislative elections of October 2001, the majority of the population showed its rejection of these policies, voting against De la Rúa’s political party. In December, in the middle of a critical political and economic situation, worsened by the interventions of international organizations such as the IMF, the unemployment rate rose to 18.3%. This situation prompted popular uprisings and riots against the government. Because of their inability to understand or to solve the situation, De la Rúa and his officers, among them Cavallo, had to resign.

  • From April to June 2002 he was jailed for alleged participation in illegal weapon sales. The case remains open.


Today, Cavallo cannot walk freely in Argentina because people consider him directly responsible for some of the most harmful economic policies in recent history. We deeply regret that serious academic institutions such as Columbia University and New York University still consider that he has the moral authority to share a panel with renowned specialists who aim at analyzing the Argentine crisis from a serious perspective.

* This text was part of the ‘escrache’ that students made to Cavallo at Columbia University during a conference entitled “Argentinean Economic Crisis and Its Implications for Emerging Markets”

Learn more