The job has aged Menem visibly, no matter what he says. His approval ratings have plunged to record lows, from a dizzy 86 percent in 1989 to a dismal 28 percent recently. Scandals and policy revolts have compelled two of his senior ministers to clean out their desks in recent months. Many of his closest former allies have abandoned him. In the presidential election scheduled for Oct. 24, all three main candidates, including the nominee of Menem’s Justicialista party, are aggressively trying to distance themselves from the departing president’s image. Even so, he shrugs off the popularity polls as mere “fireworks” by his enemies, and he scoffs at his aspiring successors. “I could beat them all, if they let me,” he says. The Constitution expressly forbids a third presidential term. Even so, only a near revolt in Congress and a lawsuit in the Supreme Court dissuaded him from running.
By many standards, Carlos Saul Menem, 69, should be basking in glory. When he came to the presidency, in July 1989, the country was in economic and social chaos. His predecessor, Raul Alfonsin, had been driven from office five months early by quadruple-digit inflation and spiraling unrest in the streets. Menem quelled the crisis, brought in billions of dollars from foreign investors and effectively reinvented the entire sprawling nation of 36 million people and its $290 billion economy. His use of free-market remedies, previously taboo throughout most of Latin America, transformed Argentina into a model of economic reform for the region. Just in case anyone in the country has failed to notice the miracle, TV spots trumpet Menem’s achievements every day: stirring footage of new roads, bridges, schools, phone lines and monuments. “Menem lo hizo!” the government-sponsored ads declare: “Menem did it!”
That’s not all he has done. By the time his term expires on Dec. 10, Menem will have served longer than any other leader in Argentine history, democrat or dictator. He has already outlasted the legendary Juan Domingo Peron (who served 10 years as president in two nonconsecutive terms). Meanwhile Menem has kept the armed forces on a short tether and out of national politics. He may have broken all the rules and offended just about everyone, but he never strayed from his commitment to democracy. That alone has been a stunning accomplishment in a nation known for coups, disposable constitutions and rabble-rousing messianic populists–such as Peron. “There is a dividing line in Argentine history,” says Miguel Broda, a respected Argentine economist: “before Menem and after Menem.”
But these are agonizing days for the president and his country. For the second time in five years, Argentina is in the depths of recession. Industrial output has fallen for 11 consecutive months. Some 1.9 million people are out of work. On a recent Sunday in Buenos Aires, a million worshipers flocked to the Church of San Cayetano, the patron saint of the jobless. A truckers’ strike nearly paralyzed the country in July. Provincial capitals are once again racked by riots. A wave of street crime has hit cities across the country.
There are many reasons for the country’s troubles, such as rapid urbanization and corporate downsizing. But many Argentines have a simpler explanation. “Menem lo hizo, tambien,” they say–“Menem did this too.” Picketers have returned to the Plaza de Mayo, the grand square in the capital that became a world symbol for the cause of democracy and human rights. In 1983 the demonstrators’ target was a brutal military junta; now it’s mene- mismo–a term that used to mean courage and resourcefulness, but now has become a synonym for all things shameless, corrupt and devious.
From the beginning he was a most unlikely national hero. When he galloped out of dusty La Rioja province into national politics, he turned Argentine society on its head. Brandishing the standard of Peron’s political heirs, the Justicialistas, Menem looked like the populist firebrand incarnate, ready to fight for the poor and to reward his followers with pork and privilege. Instead, he turned his back on Peronism. He sold off nearly a hundred government enterprises, and he took a machete to the overgrown civil service. Where the old-fashioned Peronists used to pledge themselves to “com- bating capitalism,” Menem courted big business.
Perhaps it got too cozy sometimes. Senior aides were involved in all sorts of payola scandals and compromising sweetheart deals, from alleged kickbacks on computer contracts to shady arms deals in the Balkans. But the stain never quite touched the president himself. And he worked economic magic: in 10 years Argentina attracted $50 billion in direct foreign investment, and its GDP rose 57 percent between 1991 and last year. The only Latin American country that could boast anything comparable was Chile under the heel of Augusto Pinochet–and the general’s programs were never hobbled by free speech, labor unions or the courts.
Menem’s changes went deeper than economics. He broke Argentina out of its diplomatic shell, visiting 48 countries and seeking new friends in Washington, London, even the Vatican. He sent two Argentine Navy frigates to join in the West’s military campaign against Saddam Hussein during the gulf war, and earlier this year he offered to dispatch troops to Kosovo. He has ended a smoldering border dispute with Chile and restored relations with Britain, poisoned since the 1982 war over the Falkland Islands. Next month commercial flights will resume from the Argentine mainland to the Malvinas, as Argentines have always called the islands.
The key to it all was a single economic reform, the “convertibility plan,” implemented in January 1992. The brainchild of Domingo Cavallo, a former Economics minister, the plan stabilized the currency by backing every peso with a U.S. dollar. Argentines could hold deposits in either pesos or greenbacks and convert them whenever they wished, one to one. The dollar anchor stopped inflation, bought investor confidence and persuaded panicky Argentine investors to bring home the fortunes that they had shipped to safe- ty overseas. “Remember, this was an uncultured guy from the sticks,” says Broda. “A college graduate would never have had the guts to make the changes Menem did.”
Meanwhile the president brought unaccustomed spice to his official residence, the Casa Rosada. In Buenos Aires, where sophistication and elegance are virtually a religion, here was this cholulo–this yokel–decked out in white patent-leather shoes and pastel suits, with his hair flowing long and wild. His politics were like his wardrobe: loud, irreverent and, above all else, a spectacle. The Argentine people gawked as Menem schmoozed with movie stars and sports heroes. They couldn’t help staring as he ended his marriage in theatrical style, locking his wife, Zulema, out of the presidential palace. He consulted with plastic surgeons, and suddenly the whole social register was lining up for face-lifts. Sometimes his antics crossed the line, as when he accepted the dubious gift of a Ferrari Testarossa from businessmen courting his government. “Mine! Mine! Mine!” Menem shouted at journalists asking troublesome questions about the car. Then he roared away down the coastline.
Somewhere on the long joy ride, Menem lost his way. Maybe the cause was the death of his only son, Carlitos, in a helicopter crash in 1995, a tragedy that nearly broke the president. Maybe it was his blind ambition to stay in power. Whatever went wrong, the country has badly needed Menem’s undivided attention. The 1994 Mexican peso crisis hit Argentina hard. The economy rallied, but then came the crashes in East Asia and Russia. Hopes of a rapid recovery sagged this year when Brazil was forced to declare an abrupt devaluation of the real, driving Argentina’s biggest single export market into recession. Since then the Brazilian economy has rebounded, but Brasilia and Buenos Aires are continuing to bicker over trade. Their quarrel has left Mercosur, the regional common market, at a standstill.
Argentina is in no danger of an Asian-style meltdown, economists agree, despite the country’s ballooning deficit, projected at $9.5 billion for this year, and its $114 billion foreign debt. There is growing debate over the fixed exchange rate, a favorite target of currency speculators, but no one is calling for a devaluation. Argentines are up to their chins in dollar-denominated debts, and devaluation could bankrupt thousands of businesses. Menem would like to eliminate the peso altogether in favor of the greenback, but such a step would require thorny negotiations with the U.S. Federal Reserve.
Times have been toughest for the “new poor,” the Argentines left behind by the Menem boom. Argentina still boasts Latin America’s highest per capita income. But the gap between rich and poor has been widening since the 1970s, and under Menem it became a chasm–a chasm that is starting to frighten people. “Evita Peron pranced about in her 200 pairs of shoes, but the people admired her,” says Manuel Mora y Araujo, a political analyst. “Now people are demanding a more serious, more austere style of government.”
In fact, the opposition Alliance coalition’s presidential candidate, Fernando de la Rua, briefly ran an ad boasting how boring he is. A thoughtful man given to brown suits and a frown, de la Rua is now the front runner, with a comfortable 19-point edge on the Justicialista candidate, Eduardo Duhalde, a short, plump man who looks like the actor Joe Pesci. Duhalde has been actively chatting up the third-place contender, Domingo Cavallo, the father of Menem’s convertible peso.
But Argentina needs more than worry lines and sober suits. All three candidates have promised to preserve the Menem regime’s benefits while somehow delivering jobs, safe streets and clean government and breaking loose from the dollar. How? Don’t ask. “One of the lessons of the Menem era is that no one ever wins an election saying what he is going to do,” says Matteo Goretti, a political scientist. De la Rua has won praise for balancing the books as mayor of Buenos Aires. But his main appeal is he’s not Menem. “Woe to Menem,” de la Rua warned recently. “He bears the chief blame for the corruption, impunity and hyperunemployment we are seeing today.”
Victory may only humble de la Rua. The Justicialista party holds a majority in the Senate, a huge bloc of votes in the House, a majority in the provinces and a lock on trade unions. Menem has friends in the courts, including five of the nine Supreme Court justices. De la Rua is poised to become one of the weakest presidents in Argentine history.
The departing president’s shadow does not end there. Menem dismantled the old Argentina, discarding decades of entitlements and guarantees, such as jobs for life and universal pensions and health care. In exchange, the people got working telephones, paved streets and Burger King. Now they are told the country needs even more reforms, such as a more flexible labor law and a radically restructured tax system. Many Argentines are tired of making such adjustments. In Goretti’s words, “Society is suffering from reform fatigue.”
Yet the dream of a better Argentina persists. The civil service was riddled with kickbacks and graft before Menem’s restructuring, but such problems ranked far down on the list of the country’s top concerns. People are no longer so tolerant. A recent Gallup poll ranked corruption as the country’s second biggest worry, after unemployment. Some analysts say the day of the caudillo may also be done. Menem defied his party, ignored the unions and tested Congress and the courts by issuing more decrees than any president before him–and in the end his country soured on him. For better or worse, Argentina will never be the same. Menem has left his mark.
