Argentine leader's handling of Army crisis could help party in vote. But economic decline may give opponents campaign ammunition

President Ra'ul Alfons'in has emerged from the Army rebellion of six weeks ago with a more heroic than battered public image. This could bolster his party's political chances in the September congressional and gubernatorial elections. Although the President appears to have conceded to military demands in approving a ``due obedience law'' that would exempt mid- and lower-level military officers from prosecution, the Argentine public favorably views his handling of the six-day April rebellion, observers say. The officers are being prosecuted for human rights abuses committed during the military's so-called ``dirty war'' against leftists during the 1976-83 military rule.

An A & C Associates poll conducted in Buenos Aires in early May showed an 87 percent approval rating of the way President Alfons'in handled the rebels - and that included substantial support among the major opposition party, the Peronists.

In order to ensure any sort of success in his political plans, Mr. Alfons'in would have to maintain his Radical Civic Union Party majority in the Chamber of Deputies, the lower house of Congress. The President wants to change the system to a parliamentary-style government, which could perpetuate his leadership past the end of his presidential term in 1989.

``In principle, he [Alfons'in] will reap [electoral] benefits thanks to the way the crisis was handled. In the immediate term, people will understand the due obedience law. They're saying it's the only thing he could do, though maybe the families of 9,000 missing people will never understand,'' says Dan Newland, editor of the outspoken English-language daily, the Buenos Aires Herald.

The Senate passed the bill Friday, following the Chamber of Deputies' approval of the bill on May 16.

Though Argentines ``want to get on with democracy'' rather than risk continued confrontations with the military, the long-term consequences could be dangerous, Mr. Newland says. ``The military has always believed they can get away with what they want and it [the due obedience concession] is a little like paying protection money to the Mafia.''

Pollster Felipe Noguera says that Argentines, shaken by the crisis, ``don't want to rock the boat. Alfons'in was elected to reestablish democracy. From that perspective surviving is the victory.''

``For this to turn into a political watershed for him it has got to be shown he mismanaged the crisis and someone clean has to be apparent as an alternative [political leader],'' Mr. Noguera says. But, he adds, there are no alternatives because ``Alfons'in was very cunning in the way he brought all political parties to sign a pact with him.'' During the crisis, all but two fringe parties signed a pact of solidarity with the President.

After a mid-term low in public opinion polls, Alfons'in was gaining political ground just before the April 16-21 rebellion. Argentina had just won from foreign creditor banks favorable renegotiation of half of the nation's foreign debt. Inflation had dropped to 3 percent a month in April after hitting alarming near-double digit monthly rates early in the year.

And Alfons'in had thrown the divided and bickering Peronist opposition for a political loop by naming Carlos Alderete, a powerful Peronist union figure, the labor minister.

The Peronists and unions have used the economic issue - a 20 percent decline in real wages in the last 18 months - as their biggest criticism of Alfons'in and as a reason for calling eight national strikes during the three and a half years Alfons'in has been in office.

Antonio Cafiero, leader of the renovadores faction, which is pushing for change within the Peronist party - and a gubernatorial candidate for the province of Buenos Aires, criticizes the Alderete appointment as only a token gesture at solving the nation's economic troubles.

Political pollster Monica la Madrid says the Peronists improved their combative image by putting aside their political differences and cooperating with Alfons'in during the April rebellion. This, she says, cannot be underestimated, especially because Alfons'in still runs the chance of being blamed for failure to solve the military problem if further military troubles emerge before the election. The months remaining before the elections could bring unforeseen economic problems that might overshadow the military crisis for the average wage-earning voter.

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