MercoPress. South Atlantic News Agency

Argentina's presidency : Menem again? Surely some mistake?

The popular anger that toppled his predecessor has weakened President Eduardo Duhalde. With other politicians faltering, Carlos Menem could yet return

EVER since rioting in Buenos Aires forced the resignation of President Fernando de la Rua last December, the average Argentine's sentiment towards his country's politicians has been summed up in the chant: que se vayan todos, or kick the lot of them out. In the popular view, corrupt and self-serving political leadership is the chief underlying cause of Argentina's economic collapse. So it would be supremely ironic if this corrosive hostility to politicians were to end up returning to power Carlos Menem, the most brazen representative of the species and the man who as president from 1989-99 bears prime responsibility for the disaster.

Unlikely though this seems, opinion polls suggest that Mr Menem is best placed to win the nomination of his Peronist party for a presidential election now expected to be held in March. That is not because of any sudden upsurge in his popularity. True, the former president's image has improved somewhat over the past month: 70% rather than 75% now say they disapprove of him, according to Ricardo Rouvier, a pollster.

Rather, Mr Menem's resurgence stems from the weakness, or reluctance, of other potential contenders for the poisoned chalice that is Argentina's presidency. Eduardo Duhalde, the man given the job by the Congress in January, has so far failed to reach an accord with the IMF, or halt an economic slump that saw GDP shrink by 16% in the first quarter of this year compared with the same period last year. Mr Duhalde's weakness caused him to bring forward the election, originally set for September 2003. Further unrest on the streets could see the vote held even sooner. Either way, the next president may have to take many of the unpopular decisions required to restore economic confidence which Mr Duhalde has shirked.

That seems to have helped to deter Carlos Reutemann, the Peronist governor of Santa Fe province. An honest and austere administrator, he was seen as the man likeliest to beat Mr Menem in the party primary due to be held on November 24th. But on July 10th he said he would not stand. Unless he changes his mind, that leaves Jose Manuel de la Sota, the governor of Cordoba and a free-marketeer. But his province is almost broke; he is even outpolled there by another hopeful, Adolfo Rodriguez Saa, a populist who declared Argentina's debt default when caretaker president for a week in December.

Hanging over the Peronist primary will be the destructive rivalry between Mr Menem and Mr Duhalde. In 1999, Mr Duhalde blocked Mr Menem's effort to stand for a third term. Mr Menem's pursuit of this goal was behind the fiscal deficits that helped to bring down Argentina's fixed exchange rate. Mr Duhalde in turn blamed Mr Menem for his defeat at the hands of Mr de la Rua. Mr Reutemann is said to fear being crushed between these two hostile wings of Peronism. There are fears that the Peronist primary could be marred by violent clashes between them.

But even if Mr Menem were to win the primary, would he win the presidency? The Peronists, who probably retain a solid minimum of 25% of the vote, look to be the strongest force, but by default. Mr de la Rua's Radicals have all but withered away. Two of his former ministers, Patricia Bullrich and Ricardo Lopez Murphy, are worthy candidates of the centre-right, but have little chance of being elected.

Or perhaps Carrio

Argentina's least unpopular politician is now Elisa Carrio, a former Radical turned populist firebrand. But her newly formed party lacks national organisation. She says she might not stand unless there is a wider political agreement to bring forward elections for Congress to coincide with the presidential contest. Ms Carrio's withdrawal would help Mr Menem, but might devalue the election.

Polls point to a run-off between Mr Menem and Ms Carrio. It is hard to see a strong government emerging from such a contest, in which many Argentines would abstain. Mr Menem's economic recipe is to adopt the dollar; that might provide short-term stability, but would be politically incendiary. Ms Carrio lacks serious policies for government, and would find it hard to engineer any recovery.

All of this puts greater onus on Mr Duhalde to lay the foundations of recovery before stepping down. His government has inched towards an agreement with the IMF. The main oustanding obstacle is what to do about the banks. The IMF wants deposits frozen last December turned into long-term bonds; otherwise, it argues, their release would precipitate high inflation. The government fears public hostility to this scheme. But its attempt to persuade depositors voluntarily to accept bonds has failed, with a take up of only about 15%. Both sides hope that an answer to this impasse may come from an advisory group of eminent central bankers, due to visit Buenos Aires next week.

Mr Duhalde claims that the economy has touched bottom: tax collection and industrial production have shown signs of improvement, and with imports depressed, Argentina had a trade surplus of $6.6 billion in the first five months of the year. But even if Mr Duhalde does clinch a deal with the IMF, which has begun to look a little likelier, it may not amount to much: enough money to prevent Argentina from defaulting on its debts to the IMF itself and to the multilateral banks for another year, perhaps. Much of the work of restoring confidence is likely to fall to the next government. The question facing Argentina over the next few months is whether the election can produce one capable of the task.

Source: The Economist

Categories: Mercosur.

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