ARGENTINA: EDUARDO DUHALDE BECOMES FIFTH PRESIDENT IN TWO WEEKS.
Escalating protests throughout Argentina during mid-December forced both President Fernando de la Rua and his Economy Minister Domingo Cavallo to resign. Within ten days, the country saw three other presidents take office and quickly leave. Finally, on Jan. 2, Eduardo Duhalde, who was defeated two years ago by de la Rua, assumed the presidency of the troubled country. In the process, Argentina has defaulted on its debt-service payments, devalued its currency, and declared a lengthening "banking holiday."
De la Rua unable to resolve crisis
As the economy hovered on the verge of collapse after four years of recession, the de la Rua government struggled to make payments on its US$132 billion debt, partially froze bank accounts to prop up the banking system, and faced rising joblessness and plunging consumer confidence (see NotiSur, 2001-12-14).
De la Rua and Cavallo tried a series of unsuccessful measures to turn the economy around, but they adamantly held on to the currency peg Cavallo had introduced in 1991, which tied the peso to the dollar at an exchange rate of one to one. Cavallo called a devaluation "unthinkable."
"Convertibility is the monetary system we have in Argentina, and I think the people want it to continue. Very few people want to abandon it," Cavallo told a news conference Dec. 14. "On the contrary, there's more support for dollarization."
"The government is introducing new measures every day," said former deputy economy minister Eduardo Curia. "But no one is proposing any alternative to the dollar peg."
Cavallo's decision, effective Dec. 3, to curb the amount of cash a person could withdraw from the bank each month enraged the public and led to widespread protests. A 24-hour strike on Dec. 13 against the measures was widely supported, bringing the country to a standstill.
Although the government dismissed the effectiveness of the strike, on Dec. 14, Daniel Marx, the highly respected deputy economy minister, resigned. Although he cited personal reasons, most analysts said he left because of his disagreement with the caps on bank-account withdrawals.
As the situation deteriorated, de la Rua met with his predecessor Carlos Saul Menem (1989-1999), leader of the opposition Partido Justicialista-peronista (PJ), to discuss efforts to save Argentina. Still, convertibility had become an obsession and an end in itself, and ultimately it not only brought down the government but also had to be discarded.
On Dec. 17, the government said it would slash spending by another 20% in 2002, which set off renewed protests that soon turned violent. Angry demonstrators in Buenos Aires burned tires outside supermarkets demanding food handouts. Police in riot gear used tear gas and rubber bullets to disperse protestors and looters who ransacked shops and supermarkets in some of the worst rioting in a decade.
By Dec. 20, the death toll had risen to 27, and de la Rua declared a 30-day state of siege, suspending constitutional rights and giving the government broad powers to respond to the violence. Cavallo resigned, and a judge issued an order banning him from leaving the country. Late that night, de la Rua also resigned, leaving the presidential palace by helicopter.
In his last comments as president, de la Rua lashed out at the opposition Peronists for rejecting his request the day before for a unity government. "The Peronists made a mistake," he said.
Series of presidents
Congress met Dec. 21 to accept de la Rua's...
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