POLITICS-ARGENTINA: President Admits Crisis of ‘Representability’

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Mar 1 2002 (IPS) - President Eduardo Duhalde acknowledged Friday that Argentina is suffering a “formidable crisis of representability” because the population has lost trust in lawmakers, in justice and in political, business and labour leaders.

Duhalde, in his address before a joint session of Congress, said “there is only one guarantee for peace, and that is social justice.” He stressed the urgent need to attend to the dramatic rise in poverty, which, he said, is destroying millions of homes.

The two-chamber assembly took place under high expectations, with a rally outside parliament in favour of the president, and the consequent fear of clashes with others who represent the widespread discontent and fear of economic collapse.

The rally, organised by the governing Justicialista (Peronist) Party in the plaza outside the congressional building, drew a few thousand people, who arrived without incident aboard buses and carrying signs expressing support for Duhalde.

The demonstrators remained behind a fence guarded by some 1,300 police officers.

Duhalde arrived at Congress in a car that passed slowly through heavy security, surrounded by police and a dozen bodyguards dressed in civilian clothing, who jogged alongside the moving vehicle.

In addressing the lawmakers, Duhalde borrowed phrases from the Catholic Church, exhorting the “abolition of privileges” of leaders and demanding efforts to close the gap between values and practices, confronting the heavy responsibility of the crisis, and demanding urgent international assistance.

The Church is calling the international community’s attention to the fact that the social crisis in Argentina constitutes an emergency, and is urging a commitment to complement the internal efforts under way and the facilitation of negotiations for a resource package aimed at an equitable transformation of the country, said Duhalde.

He stated that 15 million of Argentina’s 38 million people now live below the poverty line, six million of whom are indigent, lacking resources even for basic foods.

The president added that in the last two years alone nearly two million people fell from the ranks of the middle class into poverty.

After attributing the social deterioration to the economic model that was in force in Argentina until the end of 2001, Duhalde promised to create two million new jobs and a food assistance fund of 350 million dollars, in spite of the government’s depleted resources.

He said the armed forces would have “an active role” in production, transport and distribution of food, in health services and in public transportation.

With respect to a new economic programme for the country, he noted the need to lay the groundwork for a new model that emphasises production and work, the recovery of markets and a more just distribution of wealth.

Furthermore, Duhalde expressed his determination to maintain the peso, the country’s only currency of circulation. “The dollarisation of the economy would have condemned Argentina to losing its monetary and currency exchange policy,” he said.

“That was the project of the powerful, of those who maintained the previous economic model, and the definitive triumph of a project initiated in March 1976,” he said, referring to the economic policy first implemented by the country’s most recent military dictatorship (1976-1983).

The policy was maintained by the subsequent democratically elected governments of Raúl Alfonsín (1983-1989), Carlos Menem (1989-1999) and Fernando de la Rúa, who resigned Dec 20 last year after violent and massive mobilisations gripped the nation.

Duhalde, shortly after taking office on Jan 1, dismantled the “convertibility” regime that had pegged the peso at par to the dollar, a system that was launched in 1991 by Menem and his Economy minister, Domingo Cevallos, who returned to that post in the final phase of the De la Rúa administration.

That system legally established that one dollar in reserves backed each peso in circulation, a measure that had allowed the country to control inflation for more than a decade.

The current administration was forced to abandon the currency regime as a result of the freefall in cash reserves in the final months of 2001 and due to the fact, say experts, that it was blocking the development of economic productivity.

The immediate consequence of liberalising the currency rate was a sharp rise in the exchange on the dollar, reaching two pesos per dollar in recent days.

Addressing the Congress, Duhalde insisted on the need to promote development of local industry and increasing production and exports.

He predicted that the national economy will grow five percent in 2003, after gradually recovering from the recession that is nearly four years old. The recession is expected to continue until the end of 2002, with the gross domestic product shrinking 4.9 percent.

With respect to the foreign debt, the president assured that renegotiation would begin “soon” and “in responsible terms based on real possibilities of compliance.”

He also stressed that he upholds Argentina’s strategic alliance with Mercosur (Southern Common Market), and its partners Brazil, Paraguay and Uruguay.