Argentina has a New President - Again

The people of Buenos Aires welcomed the new President in much the same way that they drove the last two presidents out of office - with angry demonstrations.

On Wednesday, thousands of people took to the streets of the Argentinian capital. They banged pots and pans to show their dissatisfaction with the country's politicians.

Pamphlets read "No to Duhalde. Elections now".

Many of the demonstrators belong to Argentina's middle class. Over the years, they have gotten used to one of the highest standards of living in Latin America.

But the country's economic crisis has shattered their confidence in politicians and officials of all colors. Many of them see the country's political elite as incompetent and corrupt.

Late sense of revenge

When Eduardo Duhalde became Argentina's new President, he must have felt a deep sense of satisfaction. He had finally achieved a goal he had tried to reach in vain only a few years ago.

In the 1999 presidential election, Duhalde had lost to Fernando de la Rua. But President de la Rua was forced to resign in December, midway into his four-year term.

De la Rua's government was brought down by widespread protest against its economic policies. At least 27 people died in the violent unrest and rioting that shook the country in December.

Political analysts say Duhalde could be the only politician with the ability to garner the legitimacy and popular backing necessary to rule Argentina.

Duhalde is due to run the country until the next general elections in December of 2003.

End to free market policies

In his inauguration speech, Duhalde said he would announce a detailed new economic program for Argentina on Friday.

But he already made one thing very clear: he promised he would finish with free market policies that have been implemented in Argentina during the last decade.

Free market policies have transformed the country over the last ten years, but did little to reduce unemployment. Almost 20 percent of the Argentinian workforce is without a job.

Debt payments

Duhalde also made clear that he would continue with his predecessor Rodriguez Saa's policy of suspending debt payments. "Argentina is bankrupt. Argentina is destroyed," Duhalde said in his inaugural speech.

"We need international cooperation and understanding," the new President said. He added that the country was not in a condition to pay its debts now. "The only way to honor our internal and external commitments is through economic growth, which comes from true human development."

Argentina has piled up a €148 billion ($132 billion) debt. The country's default on its public debt has rattled financial markets and hit banking shares elsewhere in the world.

Financial analysts fear that Argentina's collapse could spread to other emerging markets. It would also affect European and American companies that have invested in Argentina.

"We have to recreate the conditions for Argentina to be once again able to attract investment," President Duhalde said.

Peso peg

Financial analysts expect Duhalde will abandon the one-to-one peg of Argentina's currency, the peso, to the U.S. dollar.

The devalued peso could then be pegged to a new basket of currencies, including the euro, the Brazilian real, the U.S. dollar and the Japanese yen.

Many Argentinians would be greatly relieved if debts were transformed into pesos. Most of them earn their wages in pesos but have debts such as mortgages in dollars.

"My commitment from today is to finish with an economic model that has brought desperation to the vast majority of our people," the new President promised his fellow Argentinians in his inauguration speech.