Tackling Argentine economy
FEW people welcome criticism. Probably the citizens of Argentina were less than thrilled when Ra'ul Alfons'in, their President, recently accused them of viewing the world as a dangerous place, full of outside threats; he said many Argentines have retreated spiritually to the ``cave man'' era. Occasionally a leader feels compelled to go to some lengths to rouse his fellow citizens into accepting change and thinking more imaginatively. Clearly Mr. Alfons'in thought that moment had come. His civilian presidency, which succeeded a military dictatorship three years ago and reaches its midpoint this week, faces major economic and political challenges. He wants broad citizen support for his best answers; some are far-reaching: He talks about economic unity with Brazil and about decentralizing the government and moving the capital from Buenos Aires to rural Patagonia.
He inherited a stagnant economy marked by an overstaffed federal bureaucracy, low wages, high inflation, and rising unemployment. Argentina's foreign debt of $50 billion is the third highest in Latin America. To tackle inflation and buy time with the creditors, the so-called Austral plan of wage and price controls was imposed in the summer of 1985 and has recently been renewed. Foreign analysts have hailed it as a sound move, arousing suspicions among some Argentines that modernization is a ``foreign'' concept. Austral results have not been spectacular, but inflation, once approaching an annual 2,000 percent rate, is expected to finish the year at a more modest 50 to 70 percent. A 5 percent growth rate is expected.
The President is also moving ahead with his plan to streamline the government. The number of employees is expected to fall naturally - through attrition, retirement, and the proposed 600-mile move to the new capital of Viedma, which many employees may not choose to make. Several small state-owned companies, losing money for the government, have been sold; others will be managed by a new holding company.
Politically, Alfons'in faces no strong threat at the moment. While not as popular as when he first took office, his approval rating remains reasonably high. The Peronists who control the major labor unions are still politically divided. Most Argentines appear willing to give their fragile new democracy more time.
President Alfons'in deserves credit for at least trying to get a better handle on the economy even if results are not yet impressive. And in a country where capital flight and tax evasion have been persistent problems, his efforts to prod Argentines to think along new lines and develop more confidence in their nation's future are right on the mark.