BUENOS AIRES – On Sunday, Argentina inaugurated a new president, Néstor Kirchner, and virtually every head of state in Latin America was here to lend support. Fidel Castro was the biggest celebrity in town, followed by Lula da Silva from Brazil, and Hugo Chávez from Venezuela.
The best that the US could come up with was Secretary of Housing and Urban Development Mel Martinez. Perhaps this wasn't an intended snub, because the White House similarly sent only its US Trade Representative to Lula's inauguration in Brazil. But all the Argentine media have noted the absence of a higher-ranking official.
Unfortunately Mr. Kirchner needs the boost of as many visiting dignitaries as possible. Emerging from the worst depression in the nation's history, Argentines are desperate that he perform well. But he becomes president with only 22 percent of the vote. Former President Carlos Menem, the winner of the first round of voting, withdrew his candidacy rather than face certain defeat in a runoff. However, he did not withdraw in a concession of defeat, but rather to rob Kirchner of the legitimacy of an electoral mandate.
Oddly, many Argentines assume that the US supports Menem, whose scandal-plagued presidency from 1989 to 1999 set the free-spending policies that are widely believed responsible for the current economic disaster. Menem is perceived as having strong ties to the Bush family, because the elder George Bush met with him on five trips to Argentina after leaving the presidency and several times in the US.
As president, Menem's foreign policy was always one of complete deference to the US; his own foreign minister once used the term "carnal relations" to describe the Argentine-US relationship.
On the campaign trail this year, Menem came out in favor of paying back Argentina's entire foreign debt, however unrealistic that may be.
Argentina's economy remains unstable after a meltdown during 2002. Bank financing remains nonexistent, unemployment approaches 20 percent, and what was once a broad middle class has collapsed into poverty. Many Argentines assume that the US wishes to punish Argentina for its default on its foreign debt and wants to keep Argentina weak.
Kirchner will need to consolidate power, and it remains unclear whether he'll do so by buying friends through patronage and corruption or through legitimate political reform. As a provincial governor, he packed the judiciary and subordinated most checks on his power. Further, he reached the presidential runoff thanks to an alliance with interim President Eduardo Duhalde, who leads a Peronist machine in greater Buenos Aires that is often viewed as being as corrupt as Menem's.
But Kirchner also presented a strikingly moderate inaugural address, calling for fiscal discipline, a crackdown on tax evasion and corruption, and new public works, with no populist bombast.
When the US engages a country, whether with trade, aid, or just high-level visits, progressive forces find themselves with greater political space.
US backing can encourage reformers to take risks against a corrupt status quo, because the US can offer new opportunities for trade or recognition. It's hard to imagine how the Bush administration plans to negotiate the Free Trade Agreement of the Americas when it fails to send a top official to major Latin American events.
The presence of Secretary of State Colin Powell or Vice President Dick Cheney at Kirchner's inauguration would have been the sort of healthy support that prevents painful interventions later. The markets would have taken note, and Argentines would perceive that the US wants their country to be successful.
Instead, in a country whose new president needs legitimacy to confront huge problems, and where his despised opponent flaunts Bush family ties, the US leaves it to Fidel Castro to party with the winner.
Today, even the US students studying in Buenos Aires are pleading for tickets to get to hear Mr. Castro. It's too bad there's not another show in town.
• Jonathan M. Miller, a law professor at Southwestern University School of Law, established Southwestern's summer law program in Argentina and has published two books in Argentina on Argentine constitutional law.
Venezuela would reduce its oil production if the Organization of Petroleum Exporting Countries decided to slash quotas at its meeting next month, the president of the state oil monopoly said Monday.
"Venezuela will comply with whatever OPEC members decide in June," Ali Rodriguez told a news conference.
Venezuelan officials had previously indicated the country would continue producing more than 3 million barrels a day this year to recover losses stemming from a two-month strike, raising doubts about the South American country's commitment to OPEC quotas.
Venezuela's OPEC current quota is 2.81 million barrels a day but will rise to 2.92 million barrels a day in June. Rodriguez said Venezuela's production was 3.3 million barrels a day. But industry sources say it's much lower.
Venezuela lost an estimated $6 billion during the opposition-organized general strike, which collapsed in February without achieving its goal of ousting President Hugo Chavez. The stoppage temporarily paralyzed the world's No. 5 oil producer.
OPEC countries agreed in April to reduce oil output by 2 million barrels a day, setting a ceiling of 25.4 million barrels a day effective June 1.
The target was up 900,000 barrels a day from the previous one, but to meet it OPEC had to cut actual production by 2 million barrels a day.
OPEC could set new quotas at its June 11 in Doha, Qatar.
BUENOS AIRES, Argentina - Argentina's new president, Nestor Kirchner, greeted a host of Latin American leaders on Monday, outlining his plans to reshape a nation gripped by deep economic woes.
Kirchner, a center-left politician, promises a more protectionist stance for South America's second-largest economy, vowing to defend jobs and industry in a country mired in five years of recession.
He spent his first full day in office meeting presidents Alejandro Toledo of Peru, Jorge Batlle of Uruguay, Alvaro Uribe of Colombia and Hugo Chavez of Venezuela.
Cuban leader Fidel Castro, whose visit here almost eclipsed Sunday's inauguration, met with Kirchner for about an hour.
"Fidel! Fidel! Cuba, Cuba, Cuba! The people salute you!" hundreds of people shouted as he left the meeting, smiling at the crowd before he entered his limousine.
Many of the leaders meeting with Kirchner applauded his desire for greater regional ties among Latin American nations.
"We need to create a new bloc of nations to negotiate with the North," Chavez said. "It would be a Latin American front."
Kirchner is seen as the latest leader in Latin America whose left-of-center leanings underscore a renewed effort by regional governments to find answers to rampant poverty and troubled economies.
Many of the presidents arrived in Buenos Aires after attending a regional summit in Lima, Peru, where they called for greater unity among struggling economies and fairer trade practices from wealthier nations.
Toledo told reporters that Latin American countries need to find "new mechanisms for finance and investment in social programs" in countries afflicted by poverty and despair.
He said he and Kirchner share similar views on how to help rebuild Argentina, a country that defaulted on most of its $141 billion public debt as its economy unraveled 18 months ago.
In recent months, the economy has shown signs of an uptick, and analysts expect its gross domestic product to expand by up to 4 percent this year.
But Kirchner will be hard-pressed by international creditors to refinance the burdensome debt and also make good on promises for a multi-billion dollar public works project to build homes, roads and meet other social needs.
Half of Argentina's 36.2 million population now live at or below the poverty line, and Kirchner used his inaugural speech on Sunday to promise to seek ways to defend "national capitalism." He asked that international markets be patient while he seeks to resurrect the country's languishing economy.
CARACAS, Venezuela, May 26 (Forbes.com-Reuters) - Close to 2,000 Venezuelan companies went out of business in the first quarter of 2003 when the economy, squeezed by a general strike and currency controls, shrank a record 29 percent, the head of the leading industrial association said Monday.
Lope Mendoza, president of the Conindustria federation that groups firms in the industrial and manufacturing sectors, described the quarterly gross domestic product (GDP) contraction announced by the Central Bank Friday as "the worst tragedy experienced by Venezuela in its contemporary history".
"With the 29 percent (GDP) fall in the first quarter, more than 1,950 companies closed down," Mendoza told reporters.
He did not specify the size or type of companies hit by the contraction, the steepest ever recorded by Venezuela and probably one of the sharpest ever seen in Latin America.
Conindustria and other private sector business associations have fiercely criticized the policies of left-wing President Hugo Chavez. They accuse him of trying to stifle private business and of seeking to install Cuba-style communism.
These business groups backed a grueling opposition strike against the populist president that gripped Venezuela, the world's No. 5 oil exporter, in December and January.
The strike, which failed to force Chavez to resign, disrupted oil production and exports, slashed government revenues and triggered heavy capital flight and a slide in the bolivar currency. To halt this, the government slapped tight currency controls onto the economy which further reduced business activity.
In its report for the first quarter, the Central Bank said the manufacturing sector contracted by 35.1 percent.
Mendoza saw the decline continuing and predicted the sector, which accounted for 13 percent of GDP, would shrink over the year by 25 percent. He foresaw unemployment in the sector reaching the same percentage by the end of the year.
"We don't see the government taking measures to stimulate national production to reverse this situation," he added.
Private manufacturers, including major food producers, have complained bitterly that the stringent foreign exchange restrictions are starving them of dollars they need to import essential raw materials and spare parts.
They say that if dollar allocations are not speeded up, or unless the currency controls are relaxed, more companies are likely to go out of business.
Chavez, a former paratrooper who was elected in late 1998 and survived a coup last year, has defended the controls, saying they will not be lifted in the short-term.
Government officials say the curbs have boosted Venezuela's depleted foreign reserves and that the country's oil production has been restored to pre-strike levels of above 3 million barrels per day (bpd).
BILL CORMIER, <a href=www.sfgate.com>San Francisco Chronicle-Associated Press Writer Monday, May 26, 2003
(05-26) 13:45 PDT BUENOS AIRES, Argentina (AP) --
Argentina's new president, Nestor Kirchner, greeted a host of Latin American leaders on Monday, outlining his plans to reshape a nation gripped by deep economic woes.
Kirchner, a center-left politician, promises a more protectionist stance for South America's second-largest economy, vowing to defend jobs and industry in a country mired in five years of recession.
He spent his first full day in office meeting presidents Alejandro Toledo of Peru, Jorge Batlle of Uruguay, Alvaro Uribe of Colombia and Hugo Chavez of Venezuela.
Cuban leader Fidel Castro, whose visit here almost eclipsed Sunday's inauguration, met with Kirchner for about an hour.
"Fidel! Fidel! Cuba, Cuba, Cuba! The people salute you!" hundreds of people shouted as he left the meeting, smiling at the crowd before he entered his limousine.
Many of the leaders meeting with Kirchner applauded his desire for greater regional ties among Latin American nations.
"We need to create a new bloc of nations to negotiate with the North," Chavez said. "It would be a Latin American front."
Kirchner is seen as the latest leader in Latin America whose left-of-center leanings underscore a renewed effort by regional governments to find answers to rampant poverty and troubled economies.
Many of the presidents arrived in Buenos Aires after attending a regional summit in Lima, Peru, where they called for greater unity among struggling economies and fairer trade practices from wealthier nations.
Toledo told reporters that Latin American countries need to find "new mechanisms for finance and investment in social programs" in countries afflicted by poverty and despair.
He said he and Kirchner share similar views on how to help rebuild Argentina, a country that defaulted on most of its $141 billion public debt as its economy unraveled 18 months ago.
In recent months, the economy has shown signs of an uptick, and analysts expect its gross domestic product to expand by up to 4 percent this year.
But Kirchner will be hard-pressed by international creditors to refinance the burdensome debt and also make good on promises for a multi-billion dollar public works project to build homes, roads and meet other social needs.
Half of Argentina's 36.2 million population now live at or below the poverty line, and Kirchner used his inaugural speech on Sunday to promise to seek ways to defend "national capitalism." He asked that international markets be patient while he seeks to resurrect the country's languishing economy.