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Argentina had an opportunity in '98 to do what it has just done (devalue) under the cover of the "Asian Flu" that was sweeping developing markets at that time. In fact, Brazil's devaluation caused a fair amount of friction as it made Argentine manufactures uncompetitive in Brazil and across the Mercosur area.

Now, what if the Argentines had decided not to stick it out with the currency board and had just devalued straightaway?

1. Argentina pulls out of her recession in '99, driven by Mercosur exports. Conversely, further pressure is put on Brazil to reform as their devaluation is no longer a competitive one. The Brazilian attempt to further integrate Mercosur beyond the most basic level stalls even faster.

2. Foreign capital flows drop off somewhat, but the effect is muted in practice since nobody wants to put money into these places at the time, anyway. DI might not be hurt too badly, as at the devalued rate. Argentine labor becomes somewhat more competitive within the world market.

3. The '98 crisis look a little worse than OTL, causing US short-term rates to drop even further. This may result in an even bigger spike in the NASDAQ in '99 (God help us.)

4. Given the additional turbulence in Mercosur, Chile opts to push harder for entrance into NAFTA. Can Clinton push it through? Does he even want to?

5. At least 4 more Argentine politicians continue to have careers through to 2002 than would otherwise be the case. :^)

6. Agitation for dollarization in Argentina increases as living standards take an immediate hit due to devaluation rather than a prolonged one due to recession, and the recipients of said hit tend to be more likely to own a savings account.
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