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Political Conflict, Economic Crisis Still Trouble Argentina - 2002-11-15

In Argentina, a power struggle is under way within the governing Peronist party that could affect the scheduled timetable for the Presidential elections early next year. The disarray within the party is a reflection of a wider crisis of confidence in Argentina's politicians, who most Argentines blame for plunging the once-rich South American nation into its deepest recession on record.

The dispute involves two leaders of the Peronist party, Argentina's current President Eduardo Duhalde, and former President Carlos Menem, who wants to return to power. Mr. Menem governed Argentina for 10 years, during which he tamed hyperinflation and promoted economic reforms that brought prosperity to this South American nation.

Mr. Menem's term expired in 1999 and his party's candidate was soundly defeated in that year's presidential election. That candidate was Eduardo Duhalde who had served as Mr. Menem's vice President during the early 1990s.

Mr. Duhalde holds power now as a transition president because the winner of the 1999 election resigned last December. Fernando de la Rua, of the centrist Radical party, stepped down after bloody riots erupted over his government's failure to resolve Argentina's deep economic crisis.

The crisis continues. Argentines have seen their money lose more than 70 percent of its value since January and many have lost their dollar-denominated savings because of measures to prevent the banking system from collapsing. The country cannot get access to international credit lines because it has suspended payments on its massive debt.

All this has had a profound impact on Argentine politics, and especially on the governing Peronist party. The party, founded in the mid-1940s by Juan Peron, has been discredited in the eyes of many Argentines for the years of rampant corruption that has exhausted the treasury.

Adding to its credibility problems are the machinations by both President Duhalde and rival ex-President Menem to control the party's primary to pick a candidate for the presidential election next March. Mr. Menem wants to be that candidate, while Mr. Duhalde is doing everything he can to ensure someone else is chosen.

The Peronist have lost only two presidential elections since Argentina's return to democracy in 1983, so whoever gets the party nomination stands a good chance of being elected president.

Political consultant Felipe Noguera says former President Menem who is strongly backed by some elements of the party could win the primary, especially if there is a low voter turnout.

"Today, many feel if there is a Peronist primary, former President Menem would have the upper hand because he has a stronger, real following," Mr. Noguera said. "In different opinion polls, if one could measure the depth of support, former President Menem might have fewer votes, but of course it's more strongly felt, and he also has his old machine there trying to get back into action."

But at the heart of the struggle is the party's ideology. Under dictator Peron, the party was founded on an alliance between trade unions and the disenfranchised. It promoted large welfare programs, and increased state control over the economy.

When Mr. Menem became president, he changed the party's direction and adopted the free-market-free-trade reforms advocated by Washington. However, Mr. Duhalde, a more traditional Peronist, is skeptical of this model, and more nationalistic. Like many Argentines, he blames the country's financial collapse on the policies of Mr. Menem, whose government was tainted by widespread corruption.

Political analyst Graciela Romer says the struggle between Mr. Duhalde and Mr. Menem is a fight over the party's future ideology.

"Peronism is in the midst of an identity crisis," she said. "This makes it a fragmented force unable to be united by a national leadership. The fight between Mr. Menem and Mr. Duhalde, she says, is not just a struggle for power by two Peronist caudillos, but a fight over the ideological dominance of the party."

It's the lack of a clear ideology that has weakened the party, and by extension Argentina. Analyst Felipe Noguera says the Peronists can be good at politics at the local level, but have often failed nationally.

"In order to stay in power, then there's certain constituencies that you need to tend to. There is a level or a component of know-how, and that know-how I think is greater at the day-to-day level, and at the retail politics level, you know where 'what do we do with the old lady who needs some money in a shantytown,' or 'how do we deal with the strike at city hall', they're very good at that," Mr. Noguera said. "But the lack of a long-term vision, I think, is what has crippled them. And therefore if you don't have a good idea of what you're going to do with power, then of course it's much easier for corruption to run rampant, which is what I think really brought them down, or does bring them down when it brings them down."

This may be sorted out when the Peronist party holds its primary, if it ever does. As part of the struggle between the two men, there is no firm agreement on a primary date, now scheduled for January, or even if there should be a primary at all. If that happens, the various Peronist candidates will run separately in March, which could pave the way for an opposition candidate to eventually win the Presidency in a second round.