Argentina Votes as Economy Falters. BRINK OF BANKRUPTCY

ON the eve of Sunday's general elections, Argentina is on the brink of bankruptcy. So desperate are the authorities for cash that Economy Minister Juan Carlos Pugliese has spent the past few days personally convincing the chairmen of several hundred top businesses to subscribe to a new bond issue.

The issue is designed to raise $500 million, needed in order to redeem another bond issue that falls due next week.

The bond sale is part of a packet of measures introduced, President Ra'ul Alfons'in told Congress last week, to show ``our firm will to stabilize the economy, definitively reestablish order ... and guarantee the democratic transition until December 10, 1989, when the new President will take over.''

The government is literally living from hand to mouth. It has even sold the residence of its ambassador in Tokyo, bringing an astonishing $290 million in that hyperinflated market.

Fears that democracy itself is in danger have arisen from the gravity of the economic crisis, which has been in an accelerating tailspin for the past three months.

With everyone from big business to small savers getting into dollars as a hedge against uncertainty, a critical shortage of dollars has developed both in the marketplace and in the treasury. The government's foreign reserves are independently estimated at less than one billion dollars - scarcely enough to pay for two months of imports.

At the root of the problem is a persistent and widening fiscal deficit, but there is little that Alfons'in can do about it at the current juncture. A new package of taxes unveiled on May 1 requires parliamentary approval, and the Peronists have refused to vote for them, at least until the elections.

Were foreign loans forthcoming, the government would find it easier to meet its obligations, but neither commercial banks nor international institutions such as the International Monetary Fund are willing to step into the breach.

The banks are reluctant to offer fresh loans when Argentina has paid hardly a cent of interest on its existing $58 billion foreign debt for the past year, and IMF officials have made it clear that only structural reforms - such as hefty hikes in public utility fees - will convince them that a loan would be wise.

At such a politically delicate moment as the present, however, the Argentine authorities fear that such hikes could provoke the kind of popular rage that broke out last February in Venezuela, provoking riots in which 300 people were killed.

Inflation is already running at 35 percent per month, according to official figures for April, and the average worker's purchasing power has dropped by a third since last Christmas. And a price freeze, imposed as one of the May 1 economic reforms, has not been honored by shopkeepers.

For the moment, the Peronist- dominated General Labor Confederation trade union umbrella group has refrained from any action for fear of endangering Peronist presidential candidate Carlos Menem's chances at Sunday's polls. But CGT leader Saul Ubaldini threatened on Tuesday that he could not promise to keep a lid on his members' discontent indefinitely.

Whether Menem wins on Sunday, as the opinion polls predict, or whether Radical party candidate Eduardo Angeloz emerges victorious, President Alfons'in is due to remain in office until next December. If there is one certainty amid the clouds of doubt obscuring Argentina's future, it is that drastic action on the economic front will be called for long before the next president takes power.

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