Rodrigazo
Encyclopedia
Rodrigazo is the name given to a group of economic policies announced in Argentina
on June 4, 1975, and their immediate aftermath. The name Rodrigazo stems from the fact that the policies were announced and implemented by Celestino Rodrigo, the Minister of Economy of Argentina
appointed by President Isabel Perón in May of that year.
The main measures were
As a consequence of these measures, the real wage
(the purchasing power of the wage) fell, as prices overall doubled between May and August alone, and continued to fall until well into 1979. The crisis had political consequences, as well, though not all were negative. Blindsided by the draconian measure, the normally supportive CGT
(the largest trade union in Latin America, at the time), called a general strike
the first ever under a Peronist government. Demanding a 125-150% mandatory wage hike, the CGT initially obtained Mrs. Perón's commitment to its enactment. As they gathered at the storied Plaza de Mayo
on June 27 in gratitude for her concession, however, the president abruptly cancelled the benefit, sending demonstrators into a riot directed at Rodrigo's benefactor, the powerful Social Welfare Minister and Perón family confidant, José López Rega
. Appointing him Ambassador to Spain
on July 11, the president had the Triple A death squad leader flee Argentina, and subsequently removed Rodrigo, as well as the Armed Forces Commander, General Alberto Numa Laplane, and numerous other López Rega protégés.
According to economist Guillermo Calvo
, the economic turmoil that followed the Rodrigazo, including an inflation rate
of around 35% a month, was one of the main pretexts for the March 1976 coup that removed the Peronist government.
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
on June 4, 1975, and their immediate aftermath. The name Rodrigazo stems from the fact that the policies were announced and implemented by Celestino Rodrigo, the Minister of Economy of Argentina
Minister of Economy of Argentina
The Minister of Economy is the head of the Ministry of Economy and Production of Argentina, concerned with finance and monetary matters. The position within the Government of Argentina is analogous to the finance ministers of some countries and the United States Treasury Secretary...
appointed by President Isabel Perón in May of that year.
The main measures were
- A 150% devaluationDevaluationDevaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....
of currency for the commercial exchange rateExchange rateIn finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency... - A 100% increase in utility and transportation prices
- A 180% rise in the price of fuel
- A 45% increase in wages
As a consequence of these measures, the real wage
Real wage
The term real wages refers to wages that have been adjusted for inflation. This term is used in contrast to nominal wages or unadjusted wages. Real wages provide a clearer representation of an individual's wages....
(the purchasing power of the wage) fell, as prices overall doubled between May and August alone, and continued to fall until well into 1979. The crisis had political consequences, as well, though not all were negative. Blindsided by the draconian measure, the normally supportive CGT
General Confederation of Labour (Argentina)
The General Confederation of Labour of the Argentine Republic is a national trade union centre of Argentina founded on September 27, 1930, as the result of the merge of the USA and the COA trade union centres...
(the largest trade union in Latin America, at the time), called a general strike
General strike
A general strike is a strike action by a critical mass of the labour force in a city, region, or country. While a general strike can be for political goals, economic goals, or both, it tends to gain its momentum from the ideological or class sympathies of the participants...
the first ever under a Peronist government. Demanding a 125-150% mandatory wage hike, the CGT initially obtained Mrs. Perón's commitment to its enactment. As they gathered at the storied Plaza de Mayo
Plaza de Mayo
The Plaza de Mayo is the main square in downtown Buenos Aires, Argentina. It is flanked by Hipólito Yrigoyen, Balcarce, Rivadavia and Bolívar streets....
on June 27 in gratitude for her concession, however, the president abruptly cancelled the benefit, sending demonstrators into a riot directed at Rodrigo's benefactor, the powerful Social Welfare Minister and Perón family confidant, José López Rega
José López Rega
José López Rega was Argentina's Minister of Social Welfare during the Peronist government started in 1973 by Juan Perón and continued after Perón's death in 1974 by his third wife and vice-president, Isabel Martínez de Perón , until the coup d'etat of 1976 that initiated the so-called National...
. Appointing him Ambassador to Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
on July 11, the president had the Triple A death squad leader flee Argentina, and subsequently removed Rodrigo, as well as the Armed Forces Commander, General Alberto Numa Laplane, and numerous other López Rega protégés.
According to economist Guillermo Calvo
Guillermo Calvo
Guillermo Antonio Calvo is an Argentine economist who is currently Director of Columbia University's mid-career Program in Economic Policy Management in their School of International and Public Affairs ....
, the economic turmoil that followed the Rodrigazo, including an inflation rate
Inflation rate
In economics, the inflation rate is a measure of inflation, the rate of increase of a price index . It is the percentage rate of change in price level over time. The rate of decrease in the purchasing power of money is approximately equal.The inflation rate is used to calculate the real interest...
of around 35% a month, was one of the main pretexts for the March 1976 coup that removed the Peronist government.