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Report from Buenos Aires: Don't Cry to Us, Argentina

Wednesday, 02 January 2002 12:00 AM

Television reports seem to suggest the country is in chaos. That is far from the truth. The capital city is tranquil.

While unemployment hovers at 20 percent, there are still fewer homeless on the streets than in any major American city.

Most of the current angst derives from the fact that a large part of the population here are used to free lunches and are unhappy they may have to stop.

Yesterday, Sen. Eduardo Duhalde, a former governor of the province of Buenos Aires, was sworn in as president.

In short order his inaugural speech put Argentina right back on course for a train wreck. Duhalde attacked the free market and international finance agencies as the root cause of his country's problems.

He promised to add 1 million unemployed to the welfare rolls as soon as possible.

This surely went over well. The Argentineans don't want to look in the mirror, to acknowledge that their flouting of market principles – and basic rules of accountability in the public and private sectors – caused the current crisis.

To be sure, the current crisis was long in the making. A hundred years ago Argentina was the seventh-largest economy in the world. By the end of World War II, Argentineans boasted a higher standard of living than Americans.

Dictator Juan Peron and his wives gained power – and took away democratic freedoms – during a period of economic prosperity.

The population here has been hooked ever since and can't kick the habit.

By all measures, Argentina should be a fantastically prosperous country. It has tremendous natural resources and an educated and skilled work force.

Yet the nation remains stuck in a rut.

The recent caretaker, President Adolfo Rodriguez Saa, came to office with promises of reform.

One of his first acts was to stop plans made by his predecessor to cut pensions and government dole payments by a modest 13 percent.

Because Argentina's peso is fixed to the dollar the government here can't simply do what other profligate nations have done in the past – inflate the currency. So Saa decided to create a third currency called the argentino.

His appointment to head the nation's largest bank described the third currency as a wise idea. He said the third currency was working well in two countries, Cuba and China.

So much for any hope of Argentina pulling out of this miasma anytime soon.

The main problem here in Argentina is not due to debts, liquidity or unemployment. Argentina's problem is that its thinking is rooted in Old World socialism.

Only by kicking its habit of government largesse will Argentina have any chance of recovery.

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Television reports seem to suggest the country is in chaos. That is far from the truth. The capital city is tranquil. While unemployment hovers at 20 percent, there are still fewer homeless on the streets than in any major American city. Most of the current angst...
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2002-00-02
Wednesday, 02 January 2002 12:00 AM
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