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November 22, 2002



Argentine President Quits After Deadly Riots

Argentina's President Fernando de la Rua resigned on Thursday after his political rivals refused to save his skin in a power sharing deal designed to end days of looting and riots that took 22 lives.

``Yes ... the president is sending his resignation to Congress,'' his top aide Nicolas Gallo told reporters at the pink presidential palace, which was besieged by thousands of protesters angry at relentless austerity drives that have impoverished many in Latin America's No. 3 economy.

Senate leader Ramon Puerta, of the opposition Peronists, is next in line for the presidency. But experts say Puerta was likely to call early elections.

De la Rua, who leaves half way through his four-year term as one of the most unpopular democratic presidents in the country's history, was preparing to address the nation.

Earlier, the center of the Argentine capital became a battle ground with five people killed and two banks set afire amid clashes between police and thousands of protesters demanding the president's resignation.

Emergency medical service workers said the five dead protesters were all elderly men who fell to the ground during street battles with police. Nationwide, at least 22 people have died in the widespread unrest.

Protesters, many from leftist groups and waving Argentine flag, shouted slogans against De la Rua as they gathered in the Plaza de Mayo in front of the palace, a traditional spot for political demonstrations.

After de la Rua's resignation, jubilant Argentines celebrated in the streets of the capital, where minutes earlier protesters were clashing with police and vandalizing banks.

``The administration is monitoring the events in Argentina,'' White House spokesman Ari Fleischer told reporters when asked about De la Rua's resignation. He declined further comment.

STATE OF SIEGE FAILED

A 30-day state of siege, declared earlier, failed to halt the violence, leaving the country of 36 million people in the throes of one of its worst crises since the last brutal military dictatorship ended in 1983.

De la Rua, a 64-year-old lawyer with little charisma and a hesitant style that cost him dear, had thrown himself on the mercy of his main political rivals, the Peronist Party which ruled Argentina from 1989-99 and now dominates Congress.

An ashen-faced leader appealed to Peronists -- as rioting crowds battled toward his palace -- to form a unity government to stem the crisis. Aides had said he would quit if rebuffed, and a negative had been widely expected.

``Peronism will continue to exercise its role as opposition and will not participate in any co-government,'' said the party bloc in the lower house of Congress. Peronist leaders, betting on an easy win in presidential elections, made no secret of their reluctance to share any blame for the crisis.

The four days of looting and protests, with many of the dead shot or stabbed by shopkeepers defending stores or killed in the Plaza de Mayo riots, brought to a head a grueling political and economic crisis that has lasted over a year.

A recession in its fourth year, 18.3 percent unemployment, relentless pay cuts and tax hikes to service the public debt, plus draconian new limits on cash withdrawals to stop a run on the banks, finally broke the patience of ordinary Argentines.

Hungry slum-dwellers, the impoverished middle class and merchants ruined by the cash controls joined in the protests, which ranged from violent looting to banging pots and pans.

Lesser discontent and smaller-scale food riots forced De la Rua's party colleague Raul Alfonsin to quit the presidency in 1989. The current president's center-left coalition fell apart last year with the resignation of his leftist vice-president.

About 2,000 people drop below the poverty line a day and children and pensioners increasingly go hungry and a country known for its wheat and beef. One of the wealthiest nations in the world in the early 20th century, Argentina still has the highest incomes and biggest middle class in Latin America.

'BEST CHRISTMAS PRESENT'

``The best Christmas gift the president can give us is to quit,'' one man said in Plaza de Mayo.

Trade unions called a general strike from midnight on Thursday until the state of siege is lifted. In the suburbs shopkeepers with guns and dogs guarded against looters.

Weeping housewives and stunned bond traders alike scrambled to protect themselves from what many now see as an inevitable debt default or currency devaluation, either of which would bankrupt thousands and deepen a brutal four-year recession.

Fearing their savings could be wiped out or confiscated by the cash-strapped government, Argentines poured what money they had into anything they could find with real value -- stocks, real estate, and jewelry. Others hid dollars under mattresses.

The panic followed the resignation early on Thursday of unpopular Economy Minister Domingo Cavallo, who defended the currency board which since 1991 has pegged the peso one-to-one to the dollar. It has avoided a return to the hyperinflation of the late 1980s but makes Argentine exports expensive abroad.

Economists say Argentina faces tough options, with a peso devaluation and default on its US$132 billion public debt widely expected on Wall Street, which has sold out Argentine bonds this year as the recession dug in and default loomed.

``They're working through the difficult options that a sovereign nation has to look at to put itself on a sound financial footing,'' said U.S. Treasury Secretary Paul O'Neill, adding that it was ``quite clear'' Argentina could not service its outstanding public debts.

The International Monetary Fund, which this month held back $1.3 billion in aid because of missed fiscal targets, said it was ``concerned'' about Argentina, but fears earlier this year that it could trigger a worldwide market rout have faded.

(China Daily December 21, 2001)

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