There was widespread rejoicing as news of the President's resignation spread. Most Argentinians hold him responsible for their woes. He was perceived as being indecisive. Law and order has returned for the time being as Argentina once again begins to chart a difficult course towards economic recovery. The last time Argentina was in a big financial mess was in 1988 during the presidency of Raul Alfonsin, also of the Radical Party. Mobs had then gone on the rampage, as the peso became almost worthless.

It took the legislators more than two days to decide on an interim President to replace de la Rua. Finally, on December 23, Adolfo Rodriguez Sua, the tough-talking Personist Governor of the province of San Luis, the most popular politician in the country at the moment, was named for the post. One of his first acts was to renege on repayment of the country's huge foreign debt.


Looting a food store in Rosario, 320 km north of Buenos Aires. Violence engulfed the capital and its suburbs from mid-December.

A survey done in the middle of 2001 found that 42 per cent of Argentinians wanted the foreign debt to be restructured while 22 per cent wanted it to be repudiated. Commentators have described the new government's action as the biggest debt default in history. Many analysts believe that the renegement on the repayment of Argentina's debt, a staggering $132.1 billion, has the potential to impact adversely on the global economy. Argentina's interest payments alone account for $10 billion a year. Many neighbouring countries are waiting with bated breath for the economic repercussions. Argentina is among the five largest debtor countries in the world. The new President is a votary of a strong peso and is obviously making a last-ditch attempt to stave off the inevitable. Most economists are of the view that devaluing the currency and changing the national currency are the only two alternatives before the country. Rodriguez Sua has a business-friendly profile and has so far eschewed the populism that Peronists have been well-known for since the time of Juan and Evita Peron. Besides, Sua is known to have long-term political ambitions. He was the front-runner among the Peronists to be their flag-bearer in the election that was due in 2003.

All indications are that Sua will tread cautiously while attempting to please the voter. At the same time he has to keep the international financial institutions happy.

Argentina had not too long ago enjoyed European standards of living. At the turn of the last century, Argentina was among the 10 richest countries in the world. Today, around 20 per cent of Argentinians live below the poverty line. Demonstrations have already begun outside the presidential palace to protest against the supplanting of one set of free marketeers by another.

–from Frontline (Indian Fortnightly)


From ZNet Commentary:

Two, Three, Many Argentinas?

January 24, 2002 Jeremy Brecher and Dennis Brutus

International investors have imposed their will on the world by means of a "creditors cartel"– embodied in the IMF, the World Bank, the G-7/8, and their creatures and allies.  They have imposed cruel and destructive policies on the people of debtor countries.  The elites that control most debtor governments have often cooperated with the foreign investors and enriched themselves.  Now the people of Argentina have said: Enough! 

As long as Argentines act alone, the creditors cartel will have the power to impose further cruelties on them--and they're preparing to do so.  But there's a strategy for turning the tables on the moneylenders.

Popular organizations from all over the world are meeting at the end of January in Porto Alegre, Brazil.  They have the opportunity to fire a (non-violent) shot that will be heard around the world: The launching of a global campaign for a debtor's cartel.

It is common knowledge among lenders – but a secret they keep from borrowers – that creditors are dependent on their major debtors for their own well-being.  If debtors can't or won't service their debts, creditors are left holding the bag.

But the only way today's debtor countries can take advantage of such dependence is to break out of the current framework in which each debtor country approaches its problems separately, as a matter between it and the creditors cartel.

Just as a worker is individually powerless before a boss but strong in a union with other workers, so today's debtor countries need to work together to limit their domination by international creditors.  Once debtor countries begin dealing collectively with their creditors – summed up in the phrase "debtors cartel" – the result could be a radical shift