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CNN Saturday Morning News

New Argentine President Plans Economic Rescue

Aired January 05, 2002 - 11:32   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MARTIN SAVIDGE, CNN ANCHOR: Argentina's newest President has offered up his prescription to cure the nation's shattered economy. CNN's Lucia Newman says his prescription has some bitter pills.

(BEGIN VIDEOTAPE)

LUCIA NEWMAN, CNN CORRESPONDENT (voice over): A new economy, a new destiny for Argentina, that was the promise of the country's latest President as details of his new economic rescue plan became public, even before they had been officially announced.

Addressing business leaders, President Eduardo Duhalde confirmed the bitter pill everyone was expecting, a devaluation of the Argentine peso, part of a package that would require sacrifices, he said, from everyone. "One step down would mean a bloodbath" warned the President.

After several weeks of civil unrest and food rioting that cost some 30 lives, and saw four other presidents come and go in 15 days, many agree this may be Argentina's last chance.

MARTIN REDRADO, ECONOMIC EXPERT: Because if his program doesn't work, Argentina will have to hold new elections, and the country's not in a position to hold new elections. It need solutions.

NEWMAN: The new economic salvation program now before Congress, attempts to provide debt relief to Argentines who owe loans in U.S. dollars by converting those debts into devalued Argentine pesos.

To compensate the banks for their losses, the government proposes taxing oil and gas exports to obtain revenue. All this, as average Argentines try to come to grips with the idea of an economy now no longer pegged to the U.S. dollar, a move that should make Argentina's products cheaper and more competitive.

But despite the President's optimism, many middle-class Argentines say they don't trust him or, for that matter, any of the country's politicians.

ERNESTO TENNEMBAUN, JOURNALIST POLITICAL ANALYST: The dramatic problem with Argentina is that no one believes that we can change the country with them, but it is impossible to change the country without them, because without them it is anarchy.

NEWMAN: For now, most seem resigned to giving the President's plan at least a chance.

(on camera): The economic bill is now the focus of Argentina's attention. The government's betting it will pass the Senate before the weekend is through, in time for the opening of markets Monday.

Lucia Newman, CNN, Buenos Aires.

(END VIDEOTAPE)

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