Many Argentines only wish they believed him. Just 10 months ago they eagerly swore in the dour lawyer as president, confident he would give their weary, recession-plagued country a fresh start. They expected de la Rua to be a sober, predictable, squeaky-clean antidote to the errors and excesses of his predecessor, the flamboyant Carlos Menem. Now the people’s bold hopes seem more like daydreams; the ruling Alliance coalition is disintegrating, and the government could be doomed to three years of paralysis while the hamstrung leader serves out his term. Two weeks ago de la Rua’s chief Alliance partner, the charismatic Carlos (Chacho) Alvarez, abruptly quit as vice president, accusing the president of being soft on corruption. “You cannot treat cancer with aspirins,” Alvarez told a cheering crowd of supporters. “You either go with the old, which must die, or you fight for the new.”
Cancer sounds like a strong word for such a murky little scandal. All the same, de la Rua may never recover from it. Two of the president’s top advisers are under scrutiny for allegedly bribing several senators to support a government-sponsored labor-reform bill. Both men insist they are innocent. Recent polls suggest most Argentines think bribes were paid, but hardly anyone expects it will ever be proved. No one has been arrested. No formal charges have been filed. So far investigators have produced no solid evidence of any wrongdoing at all. But the vice president demanded that de la Rua discipline the two aides: the Labor minister, Alberto Flamarique, and the government’s intelligence chief, Fernando Santibanes. Instead, the president stood by his two friends, even promoting Flamarique to the job of secretary-general.
The result was a disaster for de la Rua. Infuriated by Flamarique’s promotion, Alvarez resigned–followed a few hours later by Flamarique himself, belatedly trying to spare the president any further damage. (As of the weekend Santibanes was still on the job, but word was he would soon be gone.) “The whole thing was totally clumsy,” says Marcela Bordenave, a deputy from Alvarez’s center-left Frepaso party. The worry is that de la Rua’s leadership may get even clumsier. As criticism of him has mounted, the president has increasingly withdrawn into his tight inner circle consisting largely of political novices, including Santibanes, a close personal friend, and several relatives. Advisers with more experience might have helped the president resolve his differences with Alvarez. De la Rua’s friends chose instead to stage a no-win test of wills against the vice president.
Argentines might forgive such amateurish blunders–except for de la Rua’s handling of the economy. He came to office promising he would put the country back to work. Unemployment stood at 13.8 percent. By May of this year (the latest figures available) it had risen to 15.4 percent. Every afternoon hundreds of desperate job-seekers keep a vigil at the loading docks of the daily newspaper Clarin on the outskirts of Buenos Aires. Everyone wants to get a jump on the next day’s help-wanted ads. Marcelo Fernandez has been making the pilgrimage from his home in Florencia Varela, 25 kilometers outside the capital, for the past month. Broken promises from potential employers are all the fortyish unskilled worker has managed to get. “Businesses might be recovering,” he says. “But for the workers things are getting worse and worse.”
In fact, businesses are hardly better off. J.P. Morgan’s analysts are projecting that Argentina’s growth rate will be the worst on the continent this year. The latest crisis will only put more pressure on the president, who urgently needs to set lenders’ minds at ease. The country has more than $11 billion in debts coming due in the last half of 2000. “Argentina must do something quickly,” says Walter Molano, an analyst at PCP Securities, an investment bank based in Greenwich, Connecticut. “The government needs to resolve the crisis in order to return to the capital markets.”
At least de la Rua hasn’t lost all his powerful friends. Last week the International Monetary Fund hurriedly issued a declaration of faith in his administration. Not everyone is quite so sanguine, though. The New York-based investment bank Goldman, Sachs issued a bulletin recommending “caution” to anyone thinking of committing capital to Argentina.
De la Rua’s first order of business now is to decide whether to rescue the Alliance or live without it. Deputy Bordenave is betting on the former. She predicts that the president will submit to the authority of a leadership council to be set up and led by Alvarez and former president Raul Alfonsin. Such a capitulation sounds likely but would leave de la Rua far too weak to be re-elected in 2003, figures pollster Ricardo Rouvier. A bolder alternative would be for the president to jettison Alvarez’s party and form a new coalition with Menem and some of the opposition Peronists. “This is the scenario that the president finds most attractive,” says Rouvier. “But I don’t know if he would dare.” The breakup would free Alvarez to build strength outside the Alliance. “A very risky play,” says Rouvier. “Audacity is not in [the president’s] character.”
De la Rua needs to move quickly. The afternoon crowd at the Clarin loading dock is running out of patience. “Years ago, when people talked about the possibility of a social explosion, it was unthinkable,” Fernandez recalls. “Now it seems natural. I have reached my limit. We are in the year 2000 and we don’t have enough to eat.” No one can exclude the possibility that if the crisis keeps deepening, de la Rua might eventually have to resign–like the last member of his party to be elected president, Alfonsin. Argentina has had 16 presidents since 1958. Only three of them have finished their allotted terms, notes political analyst Felipe Noguera.
One of the three was Carlos Menem. Last week the former president was one of the few Argentine leaders who seemed utterly untroubled by the mess in Buenos Aires. While the embattled de la Rua and his advisers were barricading themselves in the presidential palace, Menem was visibly enjoying himself, performing an impromptu pas de deux with a sultry dancer at a party sponsored by the Argentine Arab Association. The former president had nothing to say for the record on the current political imbroglio. Besides, he clearly had his mind on the next dance–the one coming up in 2003.
