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Argentina’s Candidate Needs Miracle

October 22, 1999

BUENOS AIRES, Argentina (AP) _ Argentina’s economic ``miracle worker″ is back, this time as a presidential candidate. But polls suggest the former finance minister who mended the tattered economy in the early 90s will need his own minor miracle on Election Sunday.

Domingo Cavallo is running a distant third for president. But his is a surprisingly strong independent showing, as he barnstorms the country, winning applause with impassioned calls for strong economic medicine in newly troubled times.

Argentina is in the clutches of a recession that has punished the ruling Peronists of outgoing President Carlos Menem. A center-left opposition candidate, Buenos Aires Mayor Fernando de la Rua, is widely favored to defeat a Peronist provincial governor, Eduardo Duhalde.

Cavallo’s campaign _ launched from his center-right Action for the Republic party _ is striking a chord among many Argentines still haunted by memories of triple-digit inflation and crippling stagnation.

Although Argentina found renewed stability, times again are uneasy. The latest economic crisis came by way of Brazil, Argentina’s biggest trading partner: Unemployment is up to 14.5 percent, the economy is expected to shrink more than 3 percent this year and there is no sign of any uptick soon.

Cavallo, a Harvard-educated economist, complains neither of the two leading candidates offer specifics for leading Argentine out of its second recession in four years. But he has campaigned on the slogan, ``Cavallo has a plan.″

``Wake up, Argentina!″ Cavallo shouts at a campaign rally Wednesday in Buenos Aires, sweating in a dark suit as he worked a crowd of about 1,000 people cheering so loudly they almost drown him out. ``We can live better! Our plan today is one worker, one job.″

Orange and blue balloons of his party drop from overhead amid the cheers, and he mops his bow with a handkerchief. Carlos Gomarchi, a 70-year-old retired businessman, claps with gaze transfixed on Cavallo and says: ``I have never supported a particular political party, but Cavallo has many plans that could help the country.″

Cavallo contends that Argentina, traditionally one of Latin America’s more affluent nations, can return to the path of full prosperity. During his own turn as finance chief, industrial growth rose as much as 9 percent annually, one of the highest rates in the world.

On his watch, he helped devise a pact stabilizing the peso through one-to-one parity with the dollar, required monetary expansion to be backed by gold or hard currency. He even slashed bloated bureaucracy and toppled trade barriers to foreign investment.

In the process he leapt from the obscurity to become one of the better known Argentine personalities abroad, lauded in international finance circles. Currently a congressional deputy, he now consults beleaguered economies abroad, traveling as far afield as Russia.

In 1996, Menem sacked Cavallo in a public falling out after his finance chief began raising charges of corruption, claiming unspecified but sinister groups had infiltrated government. The accusations were investigated, but nothing came of it, even though the animosity lingered.

Now Cavallo attacks Menem on the campaign trail, saying subsequent advisers have neglected further reforms _ a charge Menem’s government refutes.

Cavallo supporters tend toward conservative middle- and upper-income voters. Some show up at his rallies wearing fur coats and driving luxury cars. Several say they don’t expect him to win, but hope he will parlay his newfound platform into some influential public role down the road.

``I think his ideas are the best for the country. But the reality is that he is not going to win,″ said Marcelo Grynblat, a 35-year-old accountant, noting poll reports that Cavallo should gain only about 10 percent of the ballot.

The winner Sunday needs 45 percent of the ballot outright _ or between 40 percent and 45 percent with a 10-percentage point difference over the runner-up. The polls suggest de la Rua will get that.

No matter the outcome, chances are Cavallo will strengthen himself as a lawmakers in the House of Deputies, now deeply divided between the Peronists and several other parties. ``We will never lose. At a minimum we will get a better bloc in the House,″ Cavallo said.

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