The following welcoming address was delivered by Roberto Cortés Conde, President, International Economic History Association.

1. Welcome to Argentina

It is a pleasure and a great honor for me to welcome you in Buenos Aires and to this XIII Congress of the International Association of Economic History. In this century, the Association begins a new stage in its history, initiated in the sixties and developed throughout twelve Congresses held in Europe and the United Sates. It does so, because this is the first time that a Congress convenes outside Europe and US.

When, in 1998, Buenos Aires was chosen as a venue for the next congress, the IEHA had two different aims. One was to recognize the growing importance of the discipline in Argentina and in Latin America; the second one, to give an important step in its full internationalization. Needless to say that some steps in that direction were already taken in the past. One Japanese scholar was elected member of the Executive Committee, and in 1990 it was the turn of a Latin American. In Milan, in 1994, a Canadian and an Australian were incorporated.

The last decade saw the foundation of three national associations in Latin America: the Uruguayan, the first one after Argentina in the year 1992; the Brazilian one in 1993, the Northern -Mexican and finally the Mexican National Association, that in due course were accepted as members. A Brazilian scholar was elected member of the Executive Committee in 1998 and from the Middle East two members came, one from Turkey and another from Israel.

That proves the growing importance that our association gave to different regions and the purpose to strengthen the collaboration among scholars all over the world.

I have the pleasure to inform you that on Thursday two new applications for membership – already approved by the Executive Committee – will be submitted to the General Assembly. One from China and the other from India; also, among the candidates presented by the new Executive Committee, one is from India.

Our Association is reaching a wider international audience, a true global scope. But this implies some challenges and new problems. Widening the audience allows us to reach scholars that previously had few occasions to attend international conferences, lacking the opportunity to know others from different parts of the world. By doing this, we contribute to the development of economic history in those countries. The number of Argentines and Latin Americans that participate in this Congress is a clear indication of the positive effects of promoting the discipline in a specific country when such country is selected as a venue for the Congress. On the other hand, it will also benefit us by granting us access to research done in other countries.

But there are some problems as well. Although we have now the help of the electronic mail, extending the geographical reach will demand to travel more extensively and to get accustomed to meet in places far away from those that we were used to meeting in the past half-century. In addition, it will require considering up to what extent the IEHA is in a condition – or believes it is desirable – to subsidize associations or scholars coming from poorer areas of the world. In this occasion, the Argentine LOC has made an important effort in this direction. In spite of the country’s difficult economic situation, we have spent almost the full amount of the participants’ fees in scholarships, especially for outlying countries where travel cost are terribly high and resources almost non-existent. Scholars from India, Armenia, Georgia, China, among other countries, were the beneficiaries up to an amount of USD 30,934.-. Besides, the LOC has given scholarships to 12 doctoral dissertations and contributed by funding their awards for the amount of USD 16,344.-. Finally, for the first time in any Congress it is contributing with USD 6,000.- to the IEHA Treasury. Payments for the installations, the local personnel during several years, the publications and CD‘s, receptions, etc. are made by locally raised funds and not from participants’ fees. Given the enormous economic difficulties, this has been possible thanks to the cautious administration of the LOC, that has started an early fund raising campaign in late 1998, during 1999 and 2000. Otherwise, under the present circumstances, it would have been impossible to do so.

I have to thank many organizations for their support and financial help, but mainly the Inter American Development Bank (IADB) and his President Enrique Iglesias, who since the beginning committed the support of the Bank and guaranteed the realization of this event. We have to extend our thanks also to the Central Bank and the Banco de la Nación Argentina and many other institutions. Particularly, we would like to express our gratitude to those who gave us institutional sponsorship: Universidad de San Andrés and the Academia Nacional de la Historia.

This Congress is an outcome of regional collaboration. We had the support of our neighbor associations from Uruguay and Brazil; responding to this, Raul Jacob from Uruguay and Tamás Szmrecsányi from Brazil are on my side as Vice Presidents of this Congress. I would like to thank them for their permanent support. Also, I have to thank Florencia Schindler for her outstanding work as coordinator in the last four years.

2. Changes at the Association, rules and government

As the IEHA expanded, more people attended its meetings and more scholars joined national associations. Their number increased and with this, the sense and need to fully participate in all instances of the International Association. In the last decades a complete change already occurred in the government body. Being elected to the Executive Committee in Leuven in 1992, I witnessed one of the most profound changes that I have ever seen. I remember when I attended the first meeting, I was one of the new ones having the honor to share the responsibilities of the association with those who were already famous when I started my academic career. Crouzet, Mathias, Van der Wee, Cameron, Landes, Fisher and several others. In 1996 at Milan the statutes were reformed to suppress an old provision that had given the three big powers two seats each. That change allowed us to incorporate new members from Canada, Australia, and Eastern Europe. Later on, in Madrid, new members came form Turkey, Israel and Brazil. This expanded our global reach. Now just only three of the ones elected in 1990 remain in Executive Committee, but we are definitively leaving on Thursday, giving way to new incorporations.

The National Association had given, in the past, a clear message asking for more participation in the government of the association, which for many reasons had mainly rested in the Executive Committee. In answer to that, in 1998, a Reform Committee chaired by RS and integrated with very prestigious scholars, excluding almost all the members of the Executive Committee but the Chairman and Secretary General, was created. The Reform Committee has worked in consultation with numerous people and after a thoughtful analysis, it has proposed several amendments to the statutes. In the meantime, the Executive Committee enacted new House Rules that were immediately applied, establishing the present and simpler format for the Congress, and outlined the procedures to choose candidates with the participation of national associations.

The proposal of new statutes already informed to the National Assoc. is going to be submitted to the General Assembly, and will incorporate to it discussion amendments proposed by some of them. Once the new statutes are approved, this association will start a new stage with different rules, among them, the one establishing that the President will no longer be the organizer of the Congress, and that such responsibility will fall on the Vice President and President for the next period. Besides, it will limit the tenure of the Executive Committee members and the role of the honorary presidents in the Executive Committee. At the end of the week the General Assembly will vote for the venue of the future XIV Congress of 2006.

The more serious challenge for the future Congress in a world of increasing budget constraints will be how to organize them, depending mainly on the participants’ contribution (the consumers) and not on external funding. Something has already been done in this direction by eliminating the expensive publications of volumes that reached only limited public, but according to my experience more has to be done to secure the continuous realization of futures Congresses, without conditioning them to hazardous external financing.

I took the Presidency of the Association in a difficult moment, as a result of events and divergences, which it is not the case to discuss now. It was my intention, ever since, to lead the Association with fairness and moderation, trying to heal wounds and accepting the need for change on condition that such changes respected continuity with a past that has been notoriously successful thanks to the work done by our predecessors. That is why I have the honor to invite, as our key speaker today, former President Herman Van der Wee, who adds to his merits as a scholar an invaluable work at the Executive Committee as member, president and honorary president.

In these four years as head of the Assoc., I have had the invaluable collaboration of our Secretary General Jan Luiten van Zanden. I met him for the first time in Madrid ’98, but along these years working together, I have been able to witness his capacity, his devotion to the Association, and I guess we started a new and permanent friendship that -by the way- is not a result of the more recent links of the Dutch Royal House with my country. Not less important was the collaboration of Vice President Patricia M. Thane and all the members of Executive Committee, where everybody agreed in working in a climate of respect and tolerance, that allowed us -through those four years- to successfully face the challenges of promoting change while respecting continuity.

3. The Economic History in the XXI Century New and old, good economic history

More than four hundred papers that will be presented in 77 sessions are a sample of the state of the discipline in the present time and the way in which it is practiced in different countries of the world.

Although the old lively debate between historians and economists on what economic history is, is no longer in the center of the stage, there still exist important differences in the way in which everyone practices it. Increasingly large numbers are using economic theory and statistical methods that are commonly applied in standard economics, but others follow methods and theories closer to other social sciences. In spite of that, it seems to me that, since the time of our early encounters, much has changed. Today economists admit that history matters, because institutions exist and there are different outcomes in diverse institutional frameworks (path dependence), and also because in the work of many prestigious economists, Cagan, Barro, Sargent, North, etc., historical events help economic intuition in the formulation of economic theories. On the other hand, historians increasingly accept that economic theory is needed to explain the economic behavior of individuals in the present as well as in the past.

4. Argentina

We meet in Argentina in a very difficult time for my country. When, following the suggestion of some Executive Committee members, I undertook the responsibility of organizing the XIII Congress in Buenos Aires, a venue that was unanimously approved by the General Assembly, Argentina was going through a period of sustained economic growth, only interrupted by the 95 Mexican crisis that was shortly overcome without abandoning convertibility and strengthening, instead, the financial system and the monetary institutions under a fix exchange regime. Although many people had been warning about the fact that the labor reforms and fiscal regime were not suitable enough to that regime, and that the government trying to get reelected in 1995 had lost momentum, nothing allowed us to presume that the trend would reverse so dramatically in just a few years. Neither the fiscal deficit, nor the size of the debt (less than 50 % of GDP) at that time indicated that the country was going to experience such a dramatic fall.

Let me say that I always sustained that this crisis and the measures to be taken in order to exit from it, are our responsibility as Argentines. Thus, in explaining now the chronology of the crisis, I do not intent to escape our responsibilities.
Already in a phase of deceleration, the Asian and the Russian crisis affected Argentina’s terms of trade, and the capital inflows that had been coming in, in large amounts, during the preceding years. The outflow of capital was accentuated later on in January 1999 by the Brazilian devaluation, that also had unfavorable effects on regional trade. As a result of those crises, there was a reversal in the direction of capital flows. Lenders began to be more cautious about emerging markets and Argentina, where although there was not a huge debt vis à vis the size of the economy, there was a recent past of debt problems and hyperinflation harming the country’s reputation. In fact, the deficit was larger than the one acknowledged by the government’s creative accounting, paying extra budgetary liabilities issuing new debt. It is true that a large part was the enormous previous arrears from pensions that were consolidated in bonds in 1982. The government had an additional burden coming from the reform of the social security system in the early 90’s, which diminished its liabilities in the long run, but increased them in the short run.

As a result of that, there was a rise in interest rates and the government resorted to paying by renewing old debt with new and more expensive one. The increase in interest rates, the rise in taxes and the reduction of government expenditure had recessive consequences. Under convertibility, the country had to deflate and, since prices were not flexible (due to unionization and cartelization in non tradables), the recession was prolonged. This, in turn, caused the fall of revenues and so on. The De la Rua Administration, believing that by showing fiscal restraint and responsibility, it would be possible to reverse the direction of capital flows, responded by increasing taxes to narrow the deficit, and later on, by reducing the salaries of public employees, with the discouraging outcome of an accentuated recession and an additional fall in revenues. Deflation also affected debts, which rose in real terms, and unemployment reached unknown highs. After two agonic years without support to pass a budget that could guarantee long run solvency and without reaching an agreement with the provincial governors on the distribution of revenues, the De la Rua Administration felt in December 2001.

The new administration that followed De la Rua, ingenuously believing that the main problem was a fix exchange system and the debt overhang, declared the country in default and proceeded with an asymmetric devaluation (including bank and other assets denominates in dollars). They did not realize that policies applied in the 30’s in USA, UK and even in Argentina, could not work in Argentina within a framework of a hyperinflationary memory that made the Argentine case more similar to that of Germany or France in the ‘30s. The capital losses produced by the devaluation and the freezing of deposits had a consequence in the dramatic fall in the demand for local money and the strong hoarding in dollars. People fled from local money, which resulted in a deep fall in investment, consumption and GDP. Besides, this asymmetric devaluation produced a strong distributive conflict, which made it more difficult to generate political consensus.

While it is possible to understand the causes of the present crisis and even its possible outcomes, it is clear that any solution implies solving a collective action problem. The continuation of the crisis will depend on when it will be possible to arrive at an agreement with an ample consensus.

But Argentina is not destroyed. Her physical and human capital is intact. Once confidence is restored, she will be in a condition to recover and grow again.

I regret that you come in a time of trial for us Argentines, but I hope you will enjoy the many things that this splendid city has to offer, and I am confident that in a future not too distant, you will see this country again in the road to growth with equity.