Argentina's Elections: Populism, Peronism, and Polls

To say the last four years have been a very tumultuous time in Argentina is something of an understatement. The country's economy has experienced conditions worse than those the US economy experienced during the Great Depression of the 1930s. More than 20% of the labor force remains without work. And next week the country's voters will elect a new head of state and government.

In most countries, bad economic times lead to elections of radical, populist, and often corrupt governments. Argentina has the same risk. Its current President Eduardo Duhalde has brought some stability, but he is an unlikely retainer of power. Mr. Duhalde and his economy minister Roberto Lavagna took some very difficult decisions that enraged Argentine voters. The release of the peso from its link to the US dollar caused the funds in savings accounts in pesos to evaporate. The capital controls on bank withdrawals remained in place throughout Mr. Duhalde's sixteen months as President. As the election campaign intensified, Mr. Duhalde announced those restrictions would be partially lifted. Simultaneous to this revelation, Mr. Lavagna released a report on the Argentine economy that indicated growth expectations for 2003 of slightly more than 4% in annualized terms.

Are these gestures of populism simply designed to help Mr. Duhalde's Peronist Party? Perhaps, but Mr. Duhalde and Mr. Lavagna still have the problem of distribution of unauthorized currencies in some of the provinces. While the candidates for the upcoming election rhetorically dislike this "funny money", few of them have proposed substantive plans to end its circulation.

Enter here former Peronist Party leader and former President Carlos Menem. Mr. Menem has simply been waiting his time through all the chaos and has entered the campaign to cast himself as the leader who can save Argentina. But can he do that?

Consider what happened the last time Mr. Menem ran Argentina. Yes, officially and statistically the country prospered. Yes, many low income Argentine voters allegedly gained from the policies of his administration, but at the end it was all a corrupt chimera. Mr. Menem briefly left the country in disgrace. An arms scandal and some less than plain dealing financial transactions were attributed to several members of his cabinet. Some of those ministers are now in prison or are awaiting trial for those activities. The presumed successes of Argentina under Mr. Menem were simply a series of false measures that created the economy's inevitable collapse.

But will Argentina's voters recognize that situation when they cast their ballots? Mr. Menem remains personally popular - particularly in the working class districts. When you have no employment, and a politician who promised and delivered employment during his last administration makes those promises again, you might believe him again.

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