The Center for Latin
of the school of business
and public management
American Studies Program
of the Elliott School of international Affairs
Will Argentina's Next President Address
the Country's Social and Economic Needs?
April 7, 2003
On April 27, Argentines will go to the polls to elect a new
president. The new executive will face extremely difficult economic and
political circumstances in the wake of the December 2001 economic crisis.
His Excellency, Eduardo Amadeo, Ambassador of Argentina to the United
States, feels that although Argentina’s economy is still reeling, there
are reasons to be optimistic about his country’s situation. Several recent
indicators show a moderate recovery in the early part of 2003, e.g.,
exports have increased sharply during the past few months. In addition, a
more stable macroeconomic environment should help allay fears of another
slump and should improve investment conditions. Demand for pesos is high,
and the Central Bank has not intervened in market the economy for seven
According to Ambassador Amadeo, these conditions are the result of efforts
by the Duhalde administration to pursue sound economic policies; in fact,
the current administration has more than met the fiscal and monetary terms
laid out in its agreement with the IMF. The successes of the Duhalde
administration are strong incentive for the next president to stay this
course and to lead with consistent, orthodox management of the economy.
The new president must behave predictably in order to build on this
|Ambassador Amadeo presents an
optimistic view of Argentina’s economic situation.
||The panelists voice their concerns
to the audience.
Poverty is the most critical issue that the new
administration must work to alleviate in order to avoid further social
unrest, challenges to the political system, and unstable conditions that
discourage foreign investment. The most positive aspect of the current
crisis in Argentina is that the political and democratic institutions have
proven remarkably resilient. Even during the worst period of crisis, each
transition of power has been made peacefully under the terms dictated by
law. In many ways, says Ambassador Amadeo, coping with the turmoil through
these stable institutions has improved the quality of political dialogue.
Ambassador Amadeo sees several major potential obstacles ahead for any
president who hopes to keep Argentina on the path toward a sounder
economic footing. The first task awaiting the next president will be to
renegotiate the enormous debt, with both private lenders and international
institutions. Second, the world situation presents a great liability for
efforts to attract investment and to spur economic growth. The United
States, while instrumental in supporting the most recent Argentine-IMF
agreement, is focusing heavily on the Middle East; there is presently no
real agenda between the United States and Latin America. The global
economic situation does not work to Argentina’s advantage either, as
recent net flows of financing are negative for the Latin American region.
Finally, the failure of the most recent Doha trade-negotiating round means
that increasing trade in the short term through reductions in trade
barriers will be difficult.
Professor Gonzalo Paz of the Latin American Studies Program at GW sees
signs of damage to the system of representation in the current political
campaign. The top three presidential candidates are all from the Peronist
Party, and the consensus of opinion is that two of these will compete in a
second-round runoff. This is the first time in 20 years that only one
party is seriously involved in elections, indicating a fragmentation of
the party system.
|Professor Gonzalo Paz discusses the
challenges that will face Argentina’s next president.
||The panelists listen to a question
from the audience.
Paz believes that, in addition to maintaining the
economic recovery and dealing with the IMF, the next president also must
focus on achieving less-quantifiable goals. Among these are rebuilding the
trust, social capital, and institutions that were severely damaged as a
result of the crisis of December 2001. Ambassador Amadeo agreed that
cultural shifts would be as important as economic policies, noting that
the middle class tends to spend as if it were rich; all Argentines will
have to learn to live within their means. Part of the effort to build a
sound economy will be increased training for mid-level government
officials, many of whom lack the expertise necessary to implement
effective economic policies.
In order for the power transition to go smoothly, President Duhalde must
prepare well to avoid even the appearance of illegal manipulation of
elections, which some observers are already warning against. Paz noted
also that the results of the parliamentary elections in October 2003 will
provide key information for evaluating the prospects of success for
Argentina’s next president.
Regarding regional issues, Ambassador Amadeo noted that Colombia is not
exclusively a problem for the United States to deal with, but that it is
important for all the nations in the region to support efforts to end the
conflict. It is amazing, he said, that the FARC’s foreign assets have not
been frozen; this would be a relatively easy first step in reducing that