- The Washington Times - Saturday, May 17, 2003

Argentina’s incoming president, Nestor Kirchner, will have to reassemble the country’s shattered confidence in the democratic system. The cancellation of today’s scheduled runoff presidential election, due to the forfeiture of Mr. Kirchner’s only challenger, highlights just how chaotic Argentina’s democratic process remains.

Given Mr. Kirchner’s soaring lead in polls, the challenger, former President Carlos Menem, backed out of the race at the last minute. By doing so, Mr. Menem robbed Mr. Kirchner of the opportunity to prove his mandate through a show of support at the polls.

Mr. Kirchner’s lost opportunity to reinforce his legitimacy could undermine his political strength and his ability to lead Argentina to economic recovery after taking office on May 25. This is worrisome, because Argentina, which is widely perceived as an example of how liberal economic reform can bring a country to ruin, will be closely watched. Although Argentina’s economic ruin was brought on by the combination of Menem-era corruption and indebtedness, the country was routinely held up as an economic model of success, and its subsequent Great Depression-style collapse is often blamed on those policies.

If Mr. Kirchner is able to sustain Argentina’s ongoing economic recovery through fiscal and monetary prudence, he will help restore Argentines’ confidence in democracy. But his damaged mandate will make it more difficult to keep the spending of Argentina’s rebellious provinces in control. Still, Mr. Kirchner’s apparent doggedness (he was considered a long-shot for the presidency) and steady hand as a governor augur well for his presidency. Also positive is Mr. Kirchner’s plan to keep on Roberto Lavagna, who has engineered the country’s ongoing recovery, as economy minister and Central Bank president.

His pledge to lower Argentina’s 18 percent unemployment through public works projects is less encouraging, given the country’s more than $55 billion foreign debt. And, Argentina’s creditors, including the International Monetary Fund (IMF), may be less willing to roll over or restructure the country’s debt in the face of a large spending campaign. Mr. Kirchner’s government will have to renegotiate an agreement with the IMF, which has pledged $2.98 billion to repay Argentina’s debts to multilateral organizations.

But Mr. Kirchner did maintain fiscal prudence as governor of oil-rich Santa Cruz, ridding the province of $1 billion in debt. The incoming president was also prescient in putting part of the province’s savings in a Swiss bank, thereby avoiding the year-long bank freeze that was lifted in December.

The Argentine people suffered through a Great Depression-style contraction last year and a five-year long recession. They need a respite from crisis. Given Mr. Kirchner’s track record, Argentina might continue its climb out of the abyss.

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