Argentina's problems are 'homegrown'
"(Private sector people told me) this was not true capitalism... It was
what has been called crony capitalism, or perhaps by the diversion of resources to
improper uses," Otto Reich, the U.S. assistant secretary of state for Western
Hemisphere affairs, told reporters in Argentina.
Asked at a news conference at the U.S. ambassador's residence if he agreed
the comments he was citing, Reich replied: "To a large degree."
His statement was yet another sign Washington is taking a get tough approach
towards Argentina -- one of the strongest U.S. allies in the region in the 1990s, but
now unable to win quick international aid amid criticism of state overspending and
incompetence, political analysts and diplomats say.
Argentina, which economists say is still Latin America's No. 3 economy,
negotiating with the International Monetary Fund after the worst economic crisis in
the country's history sparked a debt default, a currency devaluation and pushed the
banking system near the edge of collapse.
Questions have been raised about how committed the United States is to
Latin America, especially after Argentina failed to win funding quickly.
Some analysts say Argentina is being made to pay for the mistakes of its
governments, despite the risk that a downward spiral in the country, which has
been beset by civil unrest and riots, could make for an increasingly troubled region.
Carlos Menem's Peronist government in the 1990s was praised for throwing
Argentina's economy, but it was also beset by corruption and is accused of
overspending, which paved the way for this year's default.
"(President Eduardo Duhalde) said that the problems of Argentina are home
and solutions therefore have to be home grown and that is what we are saying,"
said Reich, who met Duhalde on Wednesday and visited Brazil earlier in the week.
His statement contrasted with what he said two days ago about Brazil, Latin
America's biggest economy.
"We would do whatever is necessary to help Brazil, certainly out of a problem
of its own doing," Reich said then.
Reich played down reports of growing anti-U.S. sentiment amid signs regional
voters are tired of years of Washington- encouraged free market reforms that have
done little to improve the lives of millions of poor people.
For some analysts, a rise of economic nationalism in Latin America explains
second place won by Indian coca grower Evo Morales in Bolivia's presidential
elections last month, or a strong showing in opinion polls for leftist presidential
contender Luiz Inacio Lula da Silva in Brazil.
"This is not a surprise (a rise in anti U.S. rhetoric), but ... in fact,
I think there is
less anti-American rhetoric than
historically in Latin America, Reich said.
"I've been through this before," he added, referring to his experience
America during the leftist guerrilla wars of the 1980s. "(It was) much worse."
Reich played a high-profile role in former President Ronald Reagan's fight
Nicaragua's leftist Sandinista rulers in the 1980s. The campaign produced the
biggest political scandal of the Reagan era, when U.S. officials were found to have
cut a secret deal with Iran to trade arms for money that was then funneled to
rightist Contra rebels in violation of U.S. law.
Reich said he would not comment on Argentina's negotiations with the IMF,
saying: "I believe they have met all the preconditions (of the IMF).
"Argentina has all the economic tools and resources to overcome its current
problems. It is a still a wealthy country," he added.
Copyright 2002 Reuters