Argentina's Economic Crisis

This is Steve Ember with the VOA Special English program IN THE NEWS.

Argentina's new president has announced measures to ease a severe economic crisis in the country. Adolfo Rodriguez Saa made the announcement after he replaced Fernando de la Rua as president last week. The former president resigned following violent street protests over how the government has dealt with the current economic crisis. More than twenty-five people were killed in the violence.

Poor economic decisions and continuing political crises have led to Argentina's problems. The latest crisis was caused by overspending during an economic slowdown. Some money was used to pay wages or to help the country' s poorest people. However, many Argentines blame dishonest government officials for the country's problems.

Argentina is in its fourth year of recession and is in danger of not being able to pay its debts. It owes one-hundred-thirty-two thousand-million dollars. Unemployment has risen to eighteen-percent. Industrial production has fallen. The South American nation has thirty-six million people.

One year ago, the International Monetary Fund agreed to lend Argentina almost forty-thousand-million dollars. However, tax increases and government spending cuts called for by the I-M-F plan led to a political crisis in March. Three cabinet ministers resigned. The economic crisis worsened. Earlier this month, popular protests against the government's economic measures pressured President de la Rua to resign.

Argentina's new leader, Adolfo Rodriguez Saa, took office Sunday. He was chosen to serve as temporary president by the Peronist party, which controls parliament. He is to serve as president until a new election in held in early March. The Peronist Party is expected to win the election.

President Rodriguez Saa announced new measures to prevent Argentina's economy from failing. The president suspended payments on the country's foreign debt. He announced a public works program to create one-hundred-thousand jobs before the end of this year.

The government also established a new kind of money, called the argentino. It will be used along with the Argentine peso and American dollar. The argentino will be used to pay wages of government workers and payments to retired workers.The argentino will not be supported by other kinds of money. Some economic experts believe the new money will quickly lose value and produce more inflation.

Former Argentine President Carlos Menem criticized his party's economic plan. He says most of the Argentine economy is based on linking the Argentine peso with the American dollar. He says changing that plan will not be effective. Mr. Menem was in power for most of the Nineteen-Nineties. Many people blame him for the country's current crisis.

This VOA Special English program IN THE NEWS, was written by Cynthia Kirk. This is Steve Ember.