- The Washington Times - Thursday, April 26, 2001

BUENOS AIRES — A month ago, Domingo Cavallo was heralded as the "Savior," the man who would turn around the economy as he did a decade ago when he rescued Argentina from rampant inflation and financial disarray.
Today, with stocks wavering in the region and investor worries mounting, many Argentines are wondering whether Mr. Cavallo will succeed again.
Mr. Cavallo — long the darling of Wall Street for his stewardship of the economy in the 1990s — was named economy minister by President Fernando De la Rua on March 20. The new ministers task: to dig Argentina out of a 33-month-old recession.
First there were laudatory editorials, encouraging words from investors and the support of Argentine lawmakers and labor leaders as Mr. Cavallo announced his first steps.
But lately, with no clear signs of recovery, recent turmoil on the markets and Mr. Cavallo lashing out against "myopic" economists and market "conspiracies," doubts have arisen over whether he can still weave his economic magic.
"Patience is growing thinner and thinner," said Alberto Bernal, the Latin American economist at Idea Global, a U.S.-based think tank. "Theres no doubt Cavallo is the best person to be on the job … but the situation is grave and hes overstepped the line a bit."
Analysts say few can fault Mr. Cavallo for effort.
In contrast to Mr. De la Rua, whose sedate style left many despairing, Mr. Cavallo has rushed through 18-hour days of speeches, news conferences and meetings with government leaders worldwide.
Three trips to Europe, two to North America, and two more to Brazil have earned the energetic Mr. Cavallo headlines abroad as he tried to allay international worries about Argentina.
At home, Mr. Cavallo persuaded Congress to grant the executive branch certain decree powers to implement economic reforms and introduced a tax on checking account transactions in order to help Argentina cover its debt repayment until the end of the year.
Moreover, the very return of Mr. Cavallo, with his upbeat, fast-talking style and his internationally renowned expertise, seemed to raise hopes overnight. Polls showed consumer confidence rising steeply in the first days of his appointment.
But since the beginning of April, the news has become steadily worse.
With no clear signs of an economic springtime, Mr. Cavallos plan to scrap external tariffs on capital goods provoked a rift with Argentinas biggest trading partner, Brazil.
Then came Mr. Cavallos riskiest move yet.
In an attempt to "flexibilize" Argentinas currency regime — which pegs the Argentine peso at one-to-one with the dollar — Mr. Cavallo began talking of eventually tying the Argentine peso to an average of the dollar and the euro.

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