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Argentine Cabinet Members Sworn in, Devaluation Expected
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Can Duhalde succeed where
others failed ?
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BUENOS AIRES, Jan. 3 (News Agencies) - Argentine President Eduardo Duhalde Thursday swore in a partial cabinet, which faces the formidable task of seeking to extricate the country from a 43-month-old recession - including adopting measures expected to lead to devaluation - without exacerbating popular discontent, news agencies reported.
Lawmaker Jorge Remes Lenicov got the crucial economy ministry and Buenos Aires provincial governor Carlos Ruckauf was named to serve as foreign minister, Agence France-Presse (AFP) said.
Even though Duhalde had pledged to form a government of national unity, only a couple of ministers were not from his Peronist party.
The defense and education ministers were yet to be sworn in.
Remes Lenicov was expected to outline before the end of the weeks the new government's plan to extricate Argentina from its worst crisis in recent history, marked by a 43-month-old recession and an inability to service foreign debt.
The South American country also has been rocked by violent protests against austerity measures, and the resignation of two presidents last month.
The new government said its top priority was to ease tension.
"The philosophy of this plan is to seek to avert a worsening of the social crisis," said cabinet chief Jorge Capitanich, who announced the government program would be presented on Friday.
Jorge Remes Lenicov, named to lead the key economy ministry, was expected to outline economic policies based on the scrapping of the decade-old peg of the peso to the dollar, which once ended hyperinflation but is now blamed for making exports less competitive.
Freely floating the currency is certain to lead to devaluation, which in turn could infuriate millions of Argentines already affected by austerity measures, and whose protests already led to the resignation of two presidents last month.
Argentine media said the government planned to allow some importers to buy the greenback (U.S. dollar) at a preferential rate, which may apply only for imports of essential goods.
The proposals were expected to be presented immediately to Congress, which is dominated by Duhalde's Peronist party.
The Congress overwhelmingly elected Duhalde on Tuesday. The populist president promptly swore in most members of his cabinet on Thursday, including Remes Lenicov, who served as economy minister in the influential Buenos Aires province when Duhalde governed it in the 1990s.
Carlos Ruckauf, who succeeded Duhalde as provincial governor, was named foreign affairs minister.
While Duhalde had said he would form a government of national unity, only two portfolios went to non-Peronists, including justice that will be run by Jorge Vanossi.
Vanossi is a member of the Radical Civic Union Party (UCR), which was the ruling party until Fernando de la Rua resigned as president on December 20 at the height of a profound economic crisis and street protests that left 30 people dead.
De la Rua's successor, Peronist Adolfo Rodriguez Saa resigned on December 30 after only a week on the job, during which he announced a unilateral moratorium on servicing the country's $141-billion public foreign debt.
Duhalde has made it clear he would not reverse that decision, but Jorge Remes Lenicov was expected to rush to Washington in the coming days in a bid to work out a debt-restructuring plan with the International Monetary Fund.
A key question was whether the government would adopt a proposal under which existing debt contracted in dollars would be repaid in pesos at the 1-1 rate.
Eighty percent of consumer debt is in dollars.
Capitanich said the government set itself three priorities: "to guarantee social peace, restructure political power, and set the bases for a new economic and social model."
For the second consecutive day following Duhalde's election, shares rose sharply on the Buenos Aires stock exchange with the leading MerVal index up 5.47 percent as traders hedged against the expected devaluation.
Currency markets, closed since December 21 to avoid a run on the dollar, were not expected to reopen this week, but the central bank announced that financial institutions would be allowed to conduct a limited number of currency exchange operations with the greenback still at par with the peso.
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