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President Proposes Measures to Stem Economic Crisis; Looting Continues

May 29, 1989

BUENOS AIRES, Argentina (AP) _ President Raul Alfonsin has announced an emergency package aimed at easing an economic crisis that caused looting of supermarkets and food stores in major cities.

Alfonsin, in a nationally televised speech, promised Sunday night that his lame-duck government will make sure food gets to the people in an ″extremely dangerous and cruelly damaging″ economic crisis.

As he spoke in Rosario, the nation’s third-largest city, looters raided about 50 food stores in groups of 20 to 40 people, according to a local public safety director, Edgardo Zotto.

The official news agency Telam said 20 people were arrested in the city, 150 miles north of the capital. Police, a specialized military unit and firefighters were patrolling the city, the agency said. ″Residents of the poorest neighborhoods took part in the lootings,″ Zotto said.

The incidents were similar to dozens of others that began Tuesday in Cordoba, the second largest city, and quickly spread to other cities, including working-class suburbs of the capital.

Some looters have eaten food in the stores.

The looting was the first of its kind in Argentina, although it has been common in other South American countries such as Brazil.

The General Labor Confederation was to meet in the capital today to decide whether to stage a general strike, the 14th against the government since Alfonsin took office in December 1983.

In his speech, Alfonsin called on Argentines to ″roll up your sleeves and go to work″ to ensure that emergency steps work.

″The government will dictate clear and tough rules to put an end to the risk of hyperinflation, will surgically put state finances in order and will severely punish speculative maneuvers,″ Alfonsin said.

He also offered to ″modify some of our criteria″ to fit plans of the President-elect Carlos Menem and the Peronist Party, who defeated the governing Radical Civic Union in May 14 elections. Menem replaces Alfonsin on Dec. 10.

Alfonsin’s measures, some of which require congressional approval, include a return to monetary exchange controls with an official exchange rate for the austral, Argentina’s currency, which has lost 90 percent of its value over the last four months.

Alfonsin did not say what the official value of the austral would be. The Central Bank announced Sunday that an exchange holiday, ordered on May 22, would remain in effect today.

The austral had been allowed to float since early February, when 17 bought a dollar. The currency closed at 170 to the dollar on the last day exchange markets were open.

Exchange operations will be closely watched and violations of controls will be considered crimes, Alfonsin said.

The exchange markets and the banking system will be ″progressively regularized″ Alfonsin said. Banks, which fear a run on deposits, were closed May 22 and 23 and were allowed to open May 24 with withdrawals limited to 20,000 australs (about $100) every two days.

Consumer price policies will remain unchanged, Alfonsin said. Although the government has not set price ceilings for consumer goods, prices may not be increased without specific official approval.

Retailers have ignored the regulations, marking up prices almost daily and the cost of living increase for May is expected to top 60 percent.

″Excesses will not be tolerated, especially those that have been observed in recent days,″ Alfonsin said.

He also warned that pricing of goods in any currency other than the austral will be punishable by law. Numerous retailers recently have begun pricing goods in dollars.

Government spending also will be cut, and a scheduled presidential trip to France will be canceled, Alfonsin said.

The emergency plan ″must become everyone’s program or it is condemned to failure,″ he said. ″I ask each and every Argentine to occupy his battle station.″

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