Fw: Argentina Crisis

["Nello Margiotta" <animarg@tin.it>]

 Wednesday, December 12, 2001
 Washington Post

 HIS STATURE HURT IN CRISIS
 By Anthony Faiola
 Washington Post Foreign Service


 BUENOS AIRES, Dec. 11 -- As Argentina stands on the brink of financial
 collapse, the fate of the nation more than ever rests on the shoulders of
 its president, Fernando de la Rua. That is why Argentines are panicking.

 De la Rua, 64 and a career politician, swept into office two years ago on a
 campaign slogan that celebrated his reputation as boring but reliable. But
 he is now viewed by many Argentines as an indecisive figurehead whose
 inability to lead has played a major role in the looming crash of Latin
 America's third-largest economy.

 His parliamentary coalition is largely shunning him. His strong-willed
 economy minister, Domingo Cavallo, appears to call most of the shots.
 Cavallo has even delivered key national addresses once considered the
 purview of the president.

 As a result, de la Rua has come to be seen as an overwhelmed, tragic, even
 superfluous leader. He is savaged on television shows and in political
 cartoons and is jeered during appearances. He confronts single-digit
 approval ratings in opinion polls. Argentines have even invented a new
 Spanish verb -- delarruizar -- for being trapped in indecision and
confusion.

 De la Rua's failure to muster support among powerful elements in his
 center-left Radical Civic Union party, as well as among the opposition
 Peronists, has fueled a building political crisis. The political drift,
experts say, is playing a central role in exacerbating the economic crisis
 that has already put Argentina on the verge of default and a potentially
 devastating currency devaluation -- events that could jolt economies
 throughout Latin America.

 De la Rua's electorate has lost faith in his ability to manage the crisis,
 staging a massive run on banks two weeks ago that forced the government to
 freeze accounts to prevent an immediate collapse of the financial system.
 Additionally, doubts about de la Rua's ability to deliver on promises to
 rein in spending and reach a political accord on a balanced budget for next
 year were a key factor in the International Monetary Fund's decision to
 suspend a $1.24 billion loan to Argentina this month.

 On the boulevards of this grand capital -- now tarnished by unemployment
and
 poverty after four years of recession -- Argentines openly wonder whether
 the threat of ruin will lead to de la Rua's early resignation. De la Rua is
 already forced almost daily to publicly deny that he is losing his ability
 to govern and should step aside. Many Argentines also chide de la Rua for
 his choice in advisers, chief among them his 28-year-old son, Antonio, who
 is best known for being the boyfriend of Shakira, a Colombian pop star.

 The opposition Peronists say publicly they have no interest in ousting de
la
 Rua. But the party broke last month with a long-standing Argentine
tradition
 of electing a member of the president's party as head of the Senate. With
 Peronist votes, the upper house instead elected Ramon Puerta, a Peronist
 senator from the rural province of Misiones, to replace de la Rua if he
does
 not complete his term.

 Most analysts here say de la Rua benefits from the fact that virtually no
 politician is eager to immediately wear the presidential sash given the
tenuous economic situation. But a major financial disaster such as a
 devaluation, which is likely to cause a string of corporate and personal
 bankruptcies, could generate a larger wave of social unrest that may yet
 oust de la Rua from power, experts say.

 "The truth is that Argentina's crisis is as much political as it is
 economic," said Rosendo Fraga, a political analyst in Buenos Aires. "There
 is a power vacuum. De la Rua has proven unable to lead. And if there is a
 devaluation of the currency, de la Rua's government will not survive."

 Rather than raise questions about the strength of Argentine democracy,
 restored in 1983 after a seven-year dictatorship, de la Rua's perceived
 weakness has generated a debate about the quality of politicians who have
 emerged since then.

 Former president Raul Alfonsin, a member of de la Rua's party, assumed the
 presidency in 1983, but was forced to call early elections after he led the
 economy into hyperinflation and bloated state spending. He was followed by
 the flamboyant Carlos Menem, a Peronist who did an about-face and embraced
 free market reforms in the 1990s. But Menem's 10-year administration was
 also marred by overspending, as well as corruption. He was jailed in June
 for trafficking arms while serving as president, but was released last
month
 after a successful appeal before the Supreme Court.

 As de la Rua attempts to rally politicians, his efforts have been hemmed in
 by leaders from inside and outside his party -- including Menem and
Alfonsin
 -- who seem more bent on gaining popularity points than generating
political
 consensus.

 "We are a country that has been damned by bad leaders," fumed Rodolfo
 Giletta, 68, a retired lawyer, who was waiting in a line at a bank for two
 hours this week, desperate to get at life savings that were largely frozen
 by the recent government measures.

 With the peso -- pegged to the U.S. dollar at a 1-to-1 ratio since 1991 --
 already trading on the black market at 60 cents to the dollar, Giletta said
 he feels certain he will watch the value of his savings evaporate if an
 official devaluation comes. He blamed de la Rua and Argentina's entire
 political class.

"De la Rua can't lead; Menem robbed the country blind; Alfonsin was a nice
 guy but a horrible administrator," Giletta said. "The only legacy they have
 left us is a disaster for the common man."

 Cavallo created the 1-to-1 peg to the dollar to fight hyperinflation under
 Menem and was brought back by de la Rua last April in a last-ditch effort
to
 save the economy. Since then, he has come to be seen as the president's
best
 asset, but also his biggest problem.

 Cavallo, a Harvard-educated economist with a hotheaded manner, has managed
 to irritate almost everyone, from de la Rua's coalition to the Peronists to
 the IMF to the average Argentine. The clamor for Cavallo's resignation is
 reaching a fever pitch, but analysts fret that his departure would widen
 Argentina's political void.

 Only the most partisan wholly blame de la Rua for Argentina's woes. Most
 Argentines just blame him for failing to end them.

 The tall, aristocratic de la Rua came to power in 1999 on a promise of
 honesty, and few charge him or his administration with corruption. Many add
 that de la Rua inherited an untenable situation from his predecessor,
Menem,
 whose legacy of excess left a time bomb.

 De la Rua, who receives regular treatment for a heart condition and who
 looks more worn out and is more soft-spoken than ever, conceded recently
 that "the reality [of the crisis] is more stubborn than I thought, and it
is
 harder to emerge from this downward slope than I imagined." But he still
 defends himself by saying he is untangling Menem's mess.

 "I have spent the last two years putting out fires," de la Rua told
 reporters recently. He added later, "There will be no default, no
 devaluation. I will do whatever I have to do to lift up the nation."

 Copyright 2001 The Washington Post Company. All Rights Reserved.



>
>
> The Revolution will not be televised: News at 11...
>
> grok
> Independent canadian marxist
>
> The U.S. ruling class: A godzilla monster
> that stalks the world, devouring everything.
> (apologies to Godzilla and friends)
>
>
>