Argentina's sixth president in 18 months taking office amid daunting economic challenges

BILL CORMIER, <a href=www.sfgate.com>Associated Press Writer Sunday, May 25, 2003
(05-25) 10:19 PDT BUENOS AIRES, Argentina (AP) --

Nestor Kirchner, Argentina's first elected president since the economy unraveled 18 months ago, was taking office Sunday amid popular demands he rebuild a country battered by its worst financial crisis in a century.

Twelve Latin American leaders, including Cuba's Fidel Castro and Hugo Chavez of Venezuela, joined the 53-year-old center-left politician for a day of ceremonies.

Kirchner, who hails from the sparsely populated Patagonian province of Santa Cruz, enters office with the weakest mandate in Argentine history. He won a four-year term by default when former President Carlos Menem dropped out of a runoff.

A center-left politician from Argentina's long-dominant Peronist party, Kirchner is being sworn in as Argentina's 52nd president on promises to defend domestic jobs and industry after more than a decade of unbridled free market policies.

A day of lavish ceremony kicked off when caretaker President Eduardo Duhalde had a traditional hot chocolate with his staff, then participated in a Mass at a Roman Catholic basilica in Lujan, 40 miles northwest of Buenos Aires.

Duhalde took power as a congressional appointee in January 2002 only weeks after the last elected leader, Fernando De la Rua, was forced out amid an imploding economy and deadly street rioting. De la Rua was halfway through his four-year term when the country plunged into economic chaos, bringing a revolving door of five presidents in two weeks.

Sunday's inaugural was seen as a moment of closure -- and a new beginning -- for a country struggling to steady itself from five years of recession, a $141 billion debt default and deep currency devaluation. The jobless rate remains at a near record 18 percent with more than half of the 36.2 million population living in poverty.

Many South American presidents were attending the day's ceremonies, including populist Luiz Inacio Lula da Silva, who since his own election as Brazil's first leftist leader, has sought to expand regional ties.

"Brazilian and Argentine relations are in their finest hour," he insisted, adding that the arrival of ally Kirchner would help bring about true political integration in the region.

"Today is a day for a democratic fiesta in Argentina," added Lula da Silva in a public letter.

On hand were presidents of Bolivia, Colombia, Ecuador, El Salvador, Guatemala, Paraguay, Peru and Uruguay and a scattering of Central American presidents. The United States sent a delegation headed by Housing and Urban Development Secretary Mel Martinez.

Since winning the presidency, Kirchner has lashed out at U.S.-backed free market reforms and promised a multibillion-dollar public works program to jump-start the economy.

But his economic plan remains vague for reviving South America's third-largest economy. His challenges include shrinking a bloated public sector and overhauling the country's tax code. Kirchner also must define his future relationship with the International Monetary Fund as the country grapples with restructuring.