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WHAT WE THINK
Argentina after the elections

May 23, 2003 | Page 3

WHEN THE White House starts waxing on about turning Iraq into a free-market success story, remember Argentina. Once hailed as the "star pupil" of the International Monetary Fund (IMF), Argentina is now an economic basket case. Sixty percent of the population lives under the official poverty line, and malnutrition is widespread in a country that is one of the world's great exporters of food.

And the next time that Washington hacks declare that market "reform" equals democracy, consider Argentina's latest presidential election debacle. After getting the most votes in the first round of the election, but not enough to win outright, former Argentine President Carlos Menem pulled out of the second round rather than face defeat at the hands of Néstor Kirchner.

The elections were the first since December 2001, when a mass uprising forced the resignation of former Argentine President Fernando de la Rúa and three other interim presidents in the following days. The Argentine Congress installed Eduardo Duhalde, an old rival of Menem's, as president. Continued protests tied Duhalde's hands, forcing him to call new elections, but stand aside as a candidate. He threw his support behind Kirchner, a state governor who ran a populist campaign based on promises to help the poor.

Duhalde, Menem and Kirchner are all Peronists--members of the party founded in the 1940s by Juan Perón. Menem--whose privatization of state-owned industries earned him the praise of Bill Clinton and Corporate America while he was president--tried to make a comeback this time around by calling for "law and order" and a crackdown on street protests. But his corruption--Menem was briefly put under house arrest after leaving office--limited his appeal to the 24 percent of voters who backed him in the first round of the elections.

By pulling out of the race, Menem aims to undermine Kirchner's legitimacy--and some political commentators accuse the former president of plotting a coup.

In fact, Menem's campaign has already helped to move Argentine politics to the right. In the last weeks before the vote, a judge okayed a police raid on the Brukman textile factory, one of 100 plants across the country occupied and run by workers after employers shut them down amid the economic collapse. Duhalde's failure to intervene was a signal to Argentine business--and Western banks and corporations--that mass action will be curbed, no matter who takes office.

Unfortunately, the far left, which has played a significant role in the mass protests, failed to present a united front in the elections, with some groups participating and others calling for a boycott.

Now, Kirchner will soon be squeezed between his promises of reform and the pressure to repay Argentina's $170 billion foreign debt. That will only lead to new struggles that can lay a challenge to both the ravages of the free market and a corrupt political system.

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