Carlos Menem was elected as the president of Argentina for the first time in 1989, when the country was going under major economic crises like hyperinflation and recession. His predecessor was Raul Alfonsin who became unpopular due to his faulty economic policies which stemmed up the inflation to more than 900%. His vowed to bring about productive revolution and salary increases for working class people, which were based on traditional Peronist idealism.

During Menem’s presidency finance minister Domingo Cavallo introduced several drastic reforms in the economic sector of Argentina. As one of the reforms Argentine peso was pegged to U.S. dollar. Another drastic reform was privatization of many public utilities including oil companies, the post office, telephone, gas, electricity and water utilities. There was also a huge foreign investment in the argentine economy in order to curtail inflation. With the huge foreign investment, inflation plunged from 5000% a year in 1980s to nearly zero in the 1990s. But this happened at the cost of huge unemployment.
He also played vital role in launching Mercosur customs union in 1991. Menem’s policies reversed the economic trend in Argentina. From 1990 to 1994, GDP of Argentina increased by 35%. This helped Menem a lot in winning his second presidency with large majority in 1995.

In 1996, Cavallo is dismissed from his office. Recession starts creeping in the Argentine economy. Public debt also increases rapidly. In 1999, Fernando de la Rua of the centre-left Alianza opposition coalition wins the presidency, inherits 114 billion-dollar public debt.

Menem is charged with heading an 'illicit organisation' that violated international arms embargoes against Croatia and Ecuador in the early 1990s. A court threw out all arms trafficking charges against Menem, freeing him after five months of house arrest. Menem runs for presidential election in 2003. He managed to gain most number of votes in the first round but lost in the second round. Nestor Kirchner is sworn in as Praseident.

In April 2004, judge issued international arrest warrant for former President Carlos Menem, over allegations of fraud.In december the same year former President Carlos Menem returns from self-imposed exile in Chile after two arrest warrants are cancelled.