- The Washington Times - Tuesday, July 22, 2003

Today, President George W. Bush will have an opportunity to size up a man who is proving to be as big a question mark as the country he comes from: the new Argentine president, Nestor Kirchner, who took office less than two months ago.

When Mr. Kirchner took office, there were concerns he would be a weak president. He won only 22 percent of the vote in the first round and was denied a certain landslide in the second, after his rival, former PresidentCarlosMenem, dropped out of the race. There was even talk that he would be little more than a puppet for his predecessor, EduardoDuhalde, whose support was crucial to his becoming president.

Todispelsuch doubts, Mr. Kirchner has moved aggressively to exert his authority. He has purged the top ranks of the military and federal police, and declared war on corruption and special privileges. At his bidding, Congress has targeted Supreme Court justices appointed by Mr. Menem, whom many Argentines blame for their economic woes. The chief justice resigned rather than face almost certain impeachment. At least one other justice appears headed for a similar fate.

Argentines are enthralled with their new president, who has been dubbed “Hurricane K.” The media is cheering him on. The government itself has spent heavily on advertising to burnish the president’s image.

To be sure, any attempt to clean up the corruption that has seeped so deeply into Argentina that it has become part of the national fabric is worthy of support and praise. But Mr. Kirchner must still prove his efforts are more than just a populist ruse designed to augment his own power.

Mr. Kirchner also has yet to set a clear course for economic policy. The few measures he has taken to date have had a populist tinge. For instance, he issued an executive order mandating a 50 percent increase in the minimum wage by the end of year.

The new Argentine president has some wiggle room, however. After last year’s virtual meltdown, the economy should grow around 5 percent this year. But without decisive action on Mr. Kirchner’s part, it will be difficult to maintain the recovery.

In the coming weeks, he must also negotiate a new standby agreement with the International Monetary Fund to replace an interim arrangement that expires at the end of August. To get an agreement, Mr. Kirchner would have to agree to undertake all the “structural reforms” that Mr. Duhalde would not. One of those reforms is restructuring the $65 billion in foreign debt that has been in default since December 2001. Another is allowing utility companies to raise their rates, which, despite the sharp devaluation of the peso and inflation, have been frozen since early 2002. A third is overhauling the financial system and compensating banks for the losses they suffered from measures designed to protect debtors. And there are several more. All will be politically costly for Mr. Kirchner.

The IMF, the other multilaterals and the G-7 countries appear inclined to cut Argentina some slack on the pace of reform. But at a time when the international community is making efforts to extend Mr. Kirchner a helping hand, he seems intent on biting it.

When IMF Managing Director Horst Kohler visited Argentina in June, Mr. Kirchner took the multilateral institutions to task for contributing to Argentina’s economic crisis. During a trip last week to Europe, he took a few more swipes at the IMF, blew off a meeting with French investors in Argentina and told Spanish investors to stop complaining about broken contracts and the losses they have suffered in recent years, because they cashed in during the 1990s. He has treated businesspeople in Argentina coldly, too.

For all his bluster, though, Mr. Kirchner has given signals that he understands the importance of private investment to Argentina’s long-term economic growth. As a result, many businesspeople are willing to give him the benefit of the doubt.

Nonetheless, at a time when getting the economy back on track should be the first priority, Mr. Kirchner has opened a new controversy by creating expectations that he will support efforts to re-try former officers from the 1976-1983 military regime, which killed as many as 30,000 thousand people deemed “subversives,” or allow those ex-officers to be extradited to third countries for prosecution.

This is an issue where emotions still run high. There are already signs of the sort of ideological warfare marking that unfortunate period. So far, the conflict has been limited primarily to diatribes by the left and right in the press. But unless the matter is handled with extreme care, it could distract Mr. Kirchner from the task of resolving more immediate problems.

He certainly has his work cut out for him. More than 50 percent of the population is below the poverty line. The country remains the scourge of international investors. Institutions must be fixed.

Today’s meeting with Mr. Bush will give Mr. Kirchner the chance to start defining what kind of relationship he wants with the United States. During the campaign, he took a decidely anti-U.S. line. Since taking office, he has softened his rhetoric. But he insists that he has no intention of returning to the close-knit bilateral relationship Argentina and the United States had in the 1990s, during Mr. Menem’s presidency.

For his part, Mr. Bush will probably want to know if his Argentine counterpart is the kind of pragmatic center-left politician who Brazil’s president, Luiz Inacio Lula da Silva, has turned out to be or only a slightly more moderate version of the populist politician that is still all too prevalent in this part of the world. Ironically, that is the same thing that many people in Argentina are still trying to figure out.

Dan Krishock is managing editor of the Buenos Aires Herald.


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