Argentina's Menem leaves his successor a poisoned chalice

Politics in Argentina took a new turn at the weekend when the outgoing president, Mr Carlos Menem, handed over power to his successor…

Politics in Argentina took a new turn at the weekend when the outgoing president, Mr Carlos Menem, handed over power to his successor, Mr Fernando de la Rua, the first time a Peronist leader has left office without going straight to jail or into exile.

However, while Argentinians welcomed the peaceful transition, they are anxious at the deteriorating social situation which may well prove an even greater threat to the nation's democratic institutions.

Carlos Saul Menem assumed the presidency of Argentina in 1989 as the country suffered hyper-inflation, supermarkets were looted and a sense of impending doom hung in the air. He promised more jobs, higher salaries and increased social spending, raising hopes that the nation's economic tailspin might be at an end.

The dynamic leader sold off state assets, attracted foreign investment and implemented the "convertibility" plan, whereby the peso was pegged to the dollar, thus ending inflation.

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However, something went terribly wrong in the years that followed, as crime soared, un employment doubled and corruption flourished, plunging the nation into an even greater economic depression.

No one knows precisely when the rot set in, when "the tiger of the plains" became the laughingstock of the nation, unwelcome even at Argentina's international soccer fixtures, such was the aura of bad luck which hung around him.

The downward spiral had something to do with the Ferrari which Mr Menem received as a gift from car traders currying presidential favour in 1990. Mr Menem brushed aside questions about the gift, squealing "mine, mine, mine" as he took off down the highway at high speed.

The rot had become permanent by 1995 when Mr Menem's son, Carlos jr, was killed in a suspicious helicopter crash. Mr Menem accepted it was an accident while Ms Zulema Yoma, Mr Menem's estranged wife, believed forensic experts who spotted bullet holes in the fuselage.

Days before Mr Menem stood down from office he suddenly agreed with his former wife's analysis, conveniently leaving any further investigation to the new government.

Mr Menem inaugurated a new airport in his home town, Anillaco, in 1997, a small village which now boasts the largest airstrip in the country. He won't be short of friends there either, as he recently issued a decree approving $250 million a year for Anillaco's upkeep.

The controversial president was too impatient to seek consensus for his dramatic reform programme, bypassing parliament over 700 times, invoking an emergency executive decree to indulge his whims. His predecessor, president Raul Alfonsin, used the emergency measure a dozen times in his entire administration, despite facing army mutiny and looting in the streets.

On the positive side, Mr Menem ended military conscription and helped create Mercosur, the region's common market, bringing Brazil, Uruguay and Paraguay into one free trade zone.

However, President de la Rua's new Economics Minister, Mr Jose Luis Machinea, spotted a $5 billion dollar hole in the fiscal deficit last month, truncating hopes of greater social spending. The new President is pinning his hopes of economic recovery on an anti-corruption crusade and a campaign to end tax evasion, which costs the country up to $20 billion each year.

The new budget, announced this week, promises tax hikes and salary freezes. Mr de la Rua apologised to the nation in advance, saying the "fiscal hole had to be fixed". Argentinians are weary of Mr Menem's promises of full employment and economic re covery, welcoming a leader capable of telling them uncomfortable truths.

The most apt symbol of Mr Menem's dramatic fall from grace was the large empty hall which forced followers to cancel last Thursday's planned public farewell to the president.

One of Mr Menem's last decrees was in favour of the loyal General Confederation of Unions which was awarded an annual gift of $360 million.

Argentina's trade union movement, loyal to Mr Menem's Peronist party, obediently swallowed every unpopular measure in the past 10 years, their leaders rewarded with six-figure salaries. Now they will take up their opposition role, making life difficult for the new administration.

This week brought further disturbing news to the Menem political camp, when his favourite minister, Ms Maria Julia Alsogaray, the Environment Secretary, came under investigation as $177 million was detected in an offshore Cayman Islands account.

The bad news never let up as a prominent businessman and Menem ally was named in a money-laundering scandal this week, hinting at further scandals which will pursue the former president in the coming months.

"Menem might well be looking for a home in Ireland in the future," joked an Irish diplomat some time ago, in a reference to the former Mexican president, Mr Carlos Salinas, who fled to Ireland when his brother Raul was detained on murder charges in 1995.

Mr Menem issued a farewell letter to the nation this week, in which he congratulated himself for having the "courage and strength to make hard, traumatic decisions" during his rule.

In the same spirit of sacrifice, Mr Menem has already begun his election campaign for 2003, putting up posters and retaking his position as head of the Peronist Judicialist party, despite stiff internal opposition.

In addition to the economic crisis, Mr de la Rua inherits a grave public security problem, as police continue to use repressive methods associated with military rule. "Police violence remained rampant in 1999" said Human Right's Watch this week, as it reported 140 civilian deaths at the hands of police in the first six months of this year.

The US-based organisation expressed concern at statements by government officials which appeared to justify unlimited brutality in the suppression of crime. Mr Carlos Ruckauf, the incoming Peronist governor of Buenos Aires province, promised "a bullet for every criminal".

"This is a government which will not have a wedding night, let alone a honeymoon," said one political analyst, as Argentinians welcomed a new political era which promises stability rather than change.