US Applauds Argentina's Transition. Democracy seems rooted; but aid for troubled economy awaits president-elect's revival plan


UNITED STATES officials point proudly to Argentina's coming transfer of power from one civilian President to another as a shining example of democracy's maturation in the Western Hemisphere. Since Argentine military rule ended 5 years ago, ties with the US have developed into a normal working relationship, these officials say. And though President-elect Carlos Menem made campaign statements that raised alarm bells in some foreign capitals - such as a promise to recover the Falkland Islands ``even if blood has to be shed'' - the US is willing to give the flamboyant Peronist the benefit of the doubt.

Traditionally, the US has distrusted Peronists, going back to party namesake Juan Peron's pro-Axis stand during World War II. The US is also well aware that past periods of Peronist rule have always ended in a military takeover.

But now, US officials are hoping a more pragmatic Peronism may emerge, born of economic necessity. One State Department official, for example, dismissed the Falklands statement as not a serious threat. And with memories of Argentine armed forces' early-1980s human rights abuses still fresh, the military is discredited.

Argentina's most urgent matter is its economy. During the campaign, Menem presented only vague proposals for pulling Argentina out of its tailspin. He seemed to promise all things to all people: higher wages for workers, lower prices for all, greater incentives to business. Despite the difficulty of fulfilling them all, some US observers are being optimistic.

``The size of Menem's victory offers the opportunity to control the levers of policy,'' says a US specialist on Argentina. ``The question is, Who does he listen to?'' Menem's Cabinet selections will provide clues to his policies.

But with the quickly deteriorating economy, it is unclear what kind of situation Menem would inherit if he is not permitted to take power until Dec. 10, as stipulated by law. Movement on Saturday, however, indicates a transition may come more swiftly.

Lame-duck President Raul Alfonsin, who had said he would not turn over power early, was reported to be considering an early transition.

``The people are suffering ... the consequences of a sharpening economic crisis caused by the uncertainty of present, unprecedented circumstances. The President is thus considering the possibility of bringing forward the assumption of the President-elect,'' Alfonsin spokesman Jos'e Ignacio Lopez said.

Menem was reported to have agreed to take over power early, if Alfonsin stepped down. ``If the present authorities take a decision and the people request it, I accept the possibility,'' Menem told the official Telam news agency. June 20, July 9, and Oct. 12, all Argentine national holidays, were mentioned as possible dates.

Although the US is committed to help solidify Latin democracy, a necessary component of which is economic order, observers do not see the US doing much for Argentina right now. First, Argentina needs a new plan for fixing its economy. Inflation is running at a yearly rate of 2,000 percent. Foreign debt is close to $60 billion. Argentina has paid no interest on debt in more than a year.

Once a reform program is in place and Argentina is back in line with International Monetary Fund guidelines, it could become a candidate for debt reduction under US Treasury Secretary Nicholas Brady's March 10 proposal. At that point, the US could also help with a ``bridge loan'' to ease adjustment hardships, says former Argentine Finance Minister Jos'e Maria Dagnino Pastore, who was in Washington last week.

Menem said Friday a joint mission of Radical and Peronist representatives would be sent to meet creditors in the United States to request between $1.5 billion and $2 billion in fresh loans to help solve the economic challenge.

Peter Hakim, staff director of the Inter-American Dialogue, says Argentina's economy is in such bad shape that ``it needs debt reduction before it can restructure its economy.''

But for now, it is the countries that are reforming - Mexico and Venezuela - which are first in line to get their debt reduced.

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