Argentina’s new president says first `work plan’ coming Christmas Day | TahoeDailyTribune.com
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Argentina’s new president says first `work plan’ coming Christmas Day

BILL CORMIER, Associated Press Writer

BUENOS AIRES, Argentina (AP) _ A day after defaulting on the national debt, Argentina’s new president said the first details of an ambitious works program aimed at creating a million jobs would be unveiled on Christmas.

President Adolfo Rodriguez Saa also said Monday that he would appeal to the United States and Spain for financial help in reversing a four-year recession that has ground down Argentina’s economy.

Anger over surging joblessness and spreading poverty erupted in looting and rioting last week and drove President Fernando de la Rua to resign midway through his term. Rodriguez Saa was elected by Congress early Sunday to serve as interim president until a special election March 3.

Governor of San Luis province before assuming the presidency, he used his inaugural address Sunday to declare a suspension of payments on some of Argentina’s staggering $132 billion public debt. Reaction was muted Monday on Wall Street and other financial markets because a default had been expected for weeks.

Seeking to defuse discontent and boost the nation’s morale, Rodriguez Saa is pledging to create 100,000 jobs within a week and 1 million jobs eventually.

“This government is going to undertake precise actions to show Argentines they can start to believe in the country again,” the 54-year-old leader told reporters late Sunday.

It remained unclear exactly what sort of jobs the president plans to produce, but officials suggested work clearing public parks, spaces and highways could be in the offing.

A plan to create 11,000 jobs was being prepared for Buenos Aires Province, which surrounds the capital and is home to a quarter of the nation’s 36 million people. The plan, expected Wednesday, calls for paying each worker the equivalent in bonds of $200 weekly for 25 hours of work.

The 18.3 percent unemployment rate nationwide is just a whisker below the record set in 1995 following a Mexican currency devaluation that upset finances in Argentina and other emerging markets of Latin America.

Casting about for help keeping the cash-strapped country afloat, Rodriguez Saa said he’d appeal personally to the leaders of the United States and Spain.

“I will ask President Bush and Prime Minister Jose Maria Aznar for economic help,” he told the magazine Gente. He did not say how much money he would seek.

There was no immediate reaction from either capital. But the U.S. State Department said Bush earlier told Argentina’s new leader that he intended to maintain good relations between the two nations.

Bush’s message to Rodriguez Saa was delivered Sunday in Buenos Aires by U.S. Ambassador James D. Walsh and did not deal with Argentina’s suspension of debt payments, State Department spokesman Frederick Jones said Monday.

Although Rodriguez Saa insisted debt repayments were being suspended only temporarily, the move will make it even harder for Argentina to obtain credit, which could worsen its economic slide.

For now, U.S. and international financiers are awaiting a dialogue that the new government promised on the debt suspension.

In a sign of the continuing crisis, long lines of elderly Argentines formed at banks Monday to withdraw government pensions. Many had to wait for hours in the hot sun at the outset of the South American summer.

A partial banking freeze was imposed by de la Rua on Dec. 1 after a run on banks by panicky depositors trying to pull their money out. Long lines at banks and ATMs have become commonplace since, with people limited to withdrawing a total of $1,000 in a month.

Hoping to ease the cash crunch and depletion of banking reserves, Rodriguez Saa is expected to introduce a “third currency” alongside the dollar and the Argentine peso.

The newspaper Clarin said Monday that the parallel currency to be introduced in the Buenos Aires region could reach $10 billion. That figure is well above initial estimates that placed the amount between $3 billion and $4 billion.

Economists warn that increasing the money supply could bring back overheated inflation that wreaked havoc in the late 1980s, the last time food riots and supermarket looting plagued this country of 36 million people.

Since assuming office, Rodriguez Saa has declared his intent to maintain the peso’s parity with the U.S. dollar despite calls from organized labor and small businessmen to devalue Argentina’s currency and thus make its exports more competitive.


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