- The Washington Times - Tuesday, December 25, 2001

From combined dispatches
BUENOS AIRES Argentina's new president, seeking to defuse discontent and boost the nation's morale, is embarking on an ambitious works program aimed at creating 1 million jobs.
President Adolfo Rodriguez Saa, who on Sunday suspended payments on the national debt, said yesterday that details of the program would be released today.
He also said he would appeal to the United States and Spain for financial help in reversing a four-year recession that had ground down Argentina's economy.
Meanwhile, Argentina's Central Bank said it was extending through tomorrow a banking and foreign-exchange holiday decreed on Friday. The extension, however, allows financial institutions to pay pensions and permit cash withdrawals from salary accounts.
Anger over surging joblessness and spreading poverty erupted in looting and rioting last week and drove President Fernando de la Rua to resign midway through his term. Mr. Rodriguez Saa was elected by Congress early Sunday to serve as interim president until a special election March 3.
Governor of San Luis province before assuming the presidency, Mr. Rodriguez Saa used his inaugural address on Sunday to declare a suspension of payments on some of Argentina's staggering $132 billion public debt. Reaction was muted yesterday on Wall Street and other financial markets because a default had been expected for weeks.
Mr. Rodriguez Saa is pledging to create 100,000 jobs within a week and 1 million jobs eventually.
"This government is going to undertake precise actions to show Argentines they can start to believe in the country again," the 54-year-old leader said.
It remained vague exactly what sort of jobs the president planned to produce, but officials suggested work clearing public parks, spaces and highways could be in the offing.
A plan to create 11,000 jobs was being prepared for Buenos Aires province, which surrounds the capital and is home to a quarter of the nation's 36 million people. The plan, expected tomorrow, calls for paying each worker the equivalent in bonds of $200 weekly for 25 hours of work.
The 18.3 percent unemployment rate nationwide is just a whisker below the record set in 1995 following a Mexican currency devaluation that upset finances in Argentina and other emerging markets of Latin America.
Casting about for help keeping the cash-strapped country afloat, Mr. Rodriguez Saa said he would appeal personally to the leaders of the United States and Spain.
"I will ask President Bush and Prime Minister Jose Maria Aznar for economic help," he told the magazine Gente. He did not say how much money he would seek.
Hoping to ease the cash crunch and depletion of banking reserves, Mr. Rodriguez Saa is expected to introduce a "third currency" alongside the dollar and Argentine peso.
The newspaper Clarin said yesterday that the parallel currency to be introduced in the Buenos Aires region could reach $10 billion, well above initial estimates of $3 billion to $4 billion.
Economists warn that increasing the money supply could bring back overheated inflation that wreaked havoc in the late 1980s.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide