Economic Impact
Storm economic impact on the population by level of openness to multinationals, regulatory and social protection of the country ‘Kherson is the last major city on the Dnieper River before it drains water into the Black Sea. Despite some people who opened the spring in shorts and shoes, light, Kherson is nothing spa. In each city the communist Ukraine was assigned a task to a service economy streamlined to the extreme: it corresponded to Kherson shipbuilding, manufacture of paper and the construction of agricultural machinery. (Redirected from Convertibility Law) Domingo Cavallo, finance minister of Carlos Menem that momentum Convertibility
The Convertibility Law of the Austral (Law N 23928) was enacted on March 27, 1991 by the Congress of Argentina, during the government of Carlos Saul Menem, under the initiative of then Minister of Economy Domingo Cavallo, and was in force for 11 years.
According to her, was established from 1 April 1991 a fixed rate of exchange between the currency and the U.S. at a rate of 1 (one) U.S. 10,000 (ten thousand) Southern, which would later be replaced by a new currency, the Convertible Peso, also at fixed value of U S 1. Main objective was to control hyperinflation affecting the economy at that time. It also demanded the existence of reserves in support of the currency in circulation, thus restricting the monetary emission to increase the National Treasury. The period in which the hard convertibility law was popularly called “The One to One”, in clear reference to equal dollar weight.
Initially the law, together with market opening measures and other orthodox economic policies, had an apparently beneficial effect on the course of Argentina’s economy: the country restore stability and credibility with international capital, while inflationary horror ghosts and recalled that the hyperinflationary crisis of 1989. Argentina had very low levels of inflation throughout the period in which this law was in force (approximately 10 years), something rare in the country’s economic history.
The cheap price of the dollar, along with measures to open markets, facilitate the import of goods and services from other countries. Many people have debts in dollars, and the government of Carlos Menem benefited electorally from this situation, as during the electoral process could introduce an element of pressure as the consequences for those people that the dollar increase in price. This situation was named as “Voting shares”, in reference to property acquired through purchases in installments.
However, the extension of these policies over time is highly detrimental to the economy as a whole, especially in the long term: the inability to deliver money from the state, causes the gradual fall-deficit only in a tremendous increase external debt. Moreover, the overvaluation of domestic currency, which imposed such a law potentiate the effects of the violent economic openness, the negative trade balance, and devastating to the weak local industry.
