Accessibility links

Breaking News

Argentina's Neighbors Hope the Crisis Doesn't Spread - 2001-12-21

Argentina's neighbors are carefully watching as the crisis unfolds in that country. They are hoping Argentina's problems will not spread beyond its borders.

South America's leaders have mostly discounted fears that Argentina's economic and social turmoil would spill over its borders and affect the rest of the continent. At the Mercosur Presidential Summit in Montevideo, Uruguay Thursday, leaders said they sympathized with Argentina's troubles but emphasized that their own countries are strong.

Meanwhile, residents of the quiet, seaside capital did not seem worried about similar violence crossing the River Plate, from Argentina into Uruguay.

Argentina, Brazil, Paraguay and Uruguay, plus associates Bolivia and Chile form the southern cone common market, or Mercosur, the world's third largest trade bloc. And while trade between the member states has multiplied in the 10 years since the bloc was formed, tensions between member states have also multiplied.

Argentina was torn apart this week by widespread looting and violent confrontations between security forces and angry protesters. Looters ransacked and set fire to a McDonald's restaurant and Blockbuster Video outlet in downtown Buenos Aires, as well as targeting banks and stores. Often, the outnumbered police stood by or fired tear gas that was unable to quell the violence.

The anger boiled over as Argentina's economic crisis enters its 43rd month and the official unemployment rate hovered above 18 percent. Many locals blame the length and severity of the Argentine crisis on neighboring Brazil's decision to devalue its currency in January 1999, without warning.

But Brazil's economy minister Pedro Malan defended his country's economic policy at the Mercosur summit, pointing to 13 consecutive quarters of growth in South America's largest nation. Mr. Malan also said his country's monetary regime had proven its strength and that the Brazilian currency, the real, would be able to withstand the economic crisis in Argentina.

It is not that Mr. Malan had no sympathy for Argentina's woes, but he said he had a basic confidence in Argentina and her people and that he is sure Argentina will overcome this crisis. Uruguay's economy minister Alberto Bension was also optimistic that the tiny South American nation would be able to fend off its larger neighbor's ills.