POLITICS-ARGENTINA: New President Faces Soaring Poverty, Debt

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Dec 10 1999 (IPS) - Fernando de la Rúa was inaugurated as Argentina’s new president Friday, and must now confront the challenges of an enormous fiscal deficit, growing poverty and high unemployment, which jumped 157 percent in the 10 years his predecessor, Carlos Menem, led the nation.

More than a third of Argentina’s 34 million people live in poverty, and three million live in abject poverty. The gap between rich and poor has grown, especially in recent years, reaching its greatest disparity in the nation’s history.

The new De la Rúa government must also take on the foreign debt left by his predecessor. When Menem took office in 1990, external debt reached 64 billion dollars. Today, despite the 1991 debt negotiations, and profits from the privatisation of government enterprises, the debt stands at 114 billion, not including private debt, estimated at another 40 billion dollars.

In assuming his post, De la Rúa called on the Argentinean people to forge an ethical, united and progressive society, while he promised to perform his presidential role with transparency, honesty and austerity.

As the first step of his administration, the new leader declared that the nation’s finances must be put in order with a new budget and tax reforms, which he had hoped to have by Friday. But parliament rejected the policy bills that sought to reverse the nation’s 10 billion-dollar account imbalance.

In Friday’s inauguration ceremonies, Menem presented De la Rúa with the presidential sash and baton. Afterwards, both commented – separately – that this change of government represents one more step in the nation’s democratic consolidation, now in its sixteenth year.

For the first time in Argentina’s history, a Justice (Peronist) Party president has turned over power to the opposition, in this case to De la Rúa of the centre-left Alliance coalition, made up of the Radical Civic Union (UCR) and the Country with Solidarity Front (FREPASO).

It is also the first time Argentina will be governed by a coalition. De la Rúa (UCR) was elected along with his vice- president Carlos Alvarez (FREPASO), and both have repeatedly declared they will govern the country together.

Attending the ceremony were the presidents of Brazil, Bolivia, Chile, Colombia, Paraguay, Panama and Uruguay, as well as former presidents, foreign ministers, princes, president-elects and other officials from Latin America and around the world.

Prior to the inaugural ceremonies, the new president spoke before the Legislative Assembly, emphasising that he won the post as a result of the Argentinean electorate’s longing for change, “for a new era that leads to a ethical, cohesive and progressive society.”

De la Rúa said that this change implies the “strict application” of values such as “transparency, austerity, honesty, the fight against corruption, and the deep conviction (by the government) of serving the people – not itself or privileged groups.”

His statements underscore his differences with the outgoing administration, which had a reputation for corruption, frivolity, and using power for personal gain. More than 60 percent of Argentineans polled who had voted for De la Rúa said they did so for his honesty and to end government corruption.

With the ceremony barely concluded, demonstrators outside the “Casa Rosada,” the presidential residence, shouted insults at the exiting officials who were part of Menem’s 10-year government – some face trial for irregularities while in office.

De la Rúa accompanied Menem to the Casa Rosada exit, and then spoke from the building’s balcony to thousands of supporters who awaited him with flags and banners in the Plaza de Mayo.

From the balcony, De la Rúa promised “a better future of peace and work” and underscored his role as president “of all Argentineans.” He called for unity among all, even his adversaries, “in order to achieve the hopes and dreams that have long been delayed.”

De la Rúa, 63, is an attorney who until this week headed the Buenos Aires city government. Prior to that, he had served as senator and representative to the Legislative Assembly. His image as a serious and honest leader has now won him the opportunity to lead the nation after 10 years under Menem.

Menem was able to stabilise the economy, opening the country to foreign trade and investment, and privatising public entities. But his second term, which began in 1995, did not resolve the unemployment problem, which hit 18.4 percent in 1994, and currently stands at 15 percent.

Friday morning, speaking before the nation’s legislators, De la Rúa lamented that they had not approved his proposed year-2000 budget, tax reform, or new law on government ministries. The tax law would gradually increase the tax burden for wealthier sectors, and the ministerial reform would eliminate some 50 government offices.

“I want to be sincere. The situation is serious. There is an enormous budgetary deficit, the debts of the provinces have expanded and contributions to social security have collapsed,” said the new head of state, set on putting Argentina’s accounts in order.

De la Rúa targeted the representatives of the now-opposition Justice Party, who had offered to collaborate with the new government. So far, “their help has not arrived, and the new government takes office without the approval of next year’s budget,” he chastised.

Humberto Roggero, head of the Justice bloc, explained Thursday that his party’s representatives had been willing to vote for the ministerial law and for the budget, but wanted to study the tax reforms. The three issues were included in just one legislative package.

But the new vice-president Alvarez responded saying, “it’s useless to vote for (the bill) in parts, because a new budget without taxes leaves us with an enormous fiscal hole.”

For the president, reducing the budgetary imbalance means opening the way for economic growth and investment, reducing interest rates, creating consumer confidence and increasing employment. He also emphasised that he will fight poverty, “which expanded dramatically in recent years.”

Regarding the State, De la Rúa promised to create an efficient government, without bureaucracies, and which incorporates the efforts of the Catholic Church and non-governmental organisations. “State assistance must reach the poor, young people, women heads of household, and retirees,” he said.

“The true measure of progress is not in giving more to those who already have, but in assuring a more decent life for those who have less,” he remarked, adding that more than 40 percent of the country’s people lack health insurance and seek medical services at public hospitals, which also face severe shortages.

“There is no economic development without social development,” he said, calling on the public to push for a new concept of society, one with greater solidarity.

De la Rúa also reaffirmed Argentina’s desire for growth within the Southern Common Market (Mercosur), a trade bloc made up of Argentina, Brazil, Paraguay and Uruguay. The trade partners must be open to admitting new member-countries as well as attending to the common good of all members, he stated.

De la Rúa also criticised the heavy farm subsidies granted in industrialised countries, because they obstruct the path for Argentinean products in the world market – a statement that received loud applause in the Legislative Assembly.

“Globalisation is a reality, with risks we must foresee. We must not blindly accept the rules of international trade that demand unrestricted imports and exports of goods and services, while creating new barriers beyond tariffs or incorporating explicit or hidden subsidies,” he affirmed.

Argentina will be a land of “opportunity, certainty and transparency,” a country based on “honesty, peace and work,” promised the new president, who will hold the office until December 2003.