MercoPress. South Atlantic News Agency

Domingo Cavallo, the savior

In 1991 Domingo Cavallo was the architect of radical reforms that extirpated Argentine hyper inflation and ensured several years of sustained growth and stability. In 1996 he split with then Peronist president Carlos Menem, who had given him the formidable political backing to implement his reforms. Since then he formed his own splinter political group that has a small representation in Argentine Congress, but now Mr. Cavallo is being hailed as the savior, the man who can reverse unemployment and pull Argentina away from the brink of default. In recession since July 1998, the newly 1999 elected government headed by President Fernando De la Rúa so far has been unable to turn the Argentine economy around in spite of an international contingency credit of 41 billion US dollars and full support from the business community and financial markets. Mr. Cavallo is the third Economy Minister of the De la Rúa administration, his predecessor, Ricardo López Murphy, lasted just a couple of weeks overtaken by popular reaction and lack of political support to his austerity measures to balance the budget. The ruling Alliance (Alianza) is split over support to stringent, orthodox financial policies to open the economy that are blamed for the solid 15% unemployment Argentina is suffering, while the opposition Peronists, with a more organic sense of unity, and ruling in the main provinces, seem willing to collaborate with Mr. Cavallo, if the government manages to alleviate internal dissent. However as happened with Mr. José Machinea, (the man who organised the massive international assistance) and López Murphy, making Mr. Cavallo's "magic" come true will ultimately depend on Congressional support.

Third political attempt

In his third, and possibly last political attempt, Argentine president De la Rúa finally incorporated last Monday renowned economist Domingo Cavallo to his cabinet as Economy Minister. Mr. Cavallo joined after two weeks of constant political bickering and speculation that saw ministers come and go from President De la Rúa' still incomplete cabinet. In his latest speech to the nation, Mr. De la Rúa called for a unity government and announced he will request special powers fr