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Wednesday, 24 April, 2002, 10:42 GMT 11:42 UK
Economy chief loses the plot
Jorge Remes Lenicov at an Argentine cabinet meeting
Mr Remes Lenicov (right) finally ran out of options
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By James Arnold
BBC News Online business reporter

The latest victim of the Argentinian economic crisis is the economy minister, Jorge Remes Lenicov, who was forced out of office after the Argentinian Parliament refused to back his plan to convert savings into bonds.

Yet when he took over in Janaury, Mr Lenicov was seen as a safe pair of hands.

Calm, modest and non-confrontational, Argentina's most recent economy minister could scarcely have posed a sharper contrast to his flamboyant predecessor, Domingo Cavallo.

Since Mr Cavallo had largely been blamed for the country's current predicament, that was seen as a positive development.

Different folks

Mr Remes Lenicov and Mr Cavallo are both economists, but the resemblance ends there.

While Mr Cavallo boasted a doctorate from Harvard, Mr Remes Lenicov has a bachelor's degree from the less prestigious Universidad Nacional de la Plata.

Before the current crisis broke, Mr Cavallo enjoyed a reputation of unparalleled brilliance on the world stage, dispensing his economic wisdom to a string of other emerging market leaders.

The 53-year-old Mr Remes Lenicov, by contrast, was almost unknown outside Buenos Aires until last week.

The right man for the job...

Yet it is precisely that modest profile that had recommended him for the present post.

After all, Argentina was hoping for a little undramatic stability - but it was not to be.

Mr Remes Lenicov's key advantage had been close relationship with President Eduardo Duhalde.

The two Peronist Party colleagues served together through most of the 1990s in the administration of Buenos Aires province, Argentina's largest - Mr Duhalde as governor, and Mr Remes Lenicov as economy chief.

And while Mr Cavallo was often abrasive with colleagues, Mr Remes Lenicov is seen as a team player, a politician more interested in maintaining consensus than rocking the boat.

... or not, as the case may be

But some analysts always questioned whether the unassuming Mr Remes Lenicov really had what it takes.

His track record at Buenos Aires province scarcely inspires confidence.

During the 1990s, the province's debt spiralled from $124m to almost $1.6bn, leaving the local government close to bankruptcy.

During the present crisis, Buenos Aires was the first state to start printing its own currency to pay public sector workers.

Mr Remes Lenicov's fans point out that he did not serve as economy chief for the whole of the 1990s, and so cannot be blamed for the whole of the province's debt mountain.

Under the thumb

But Mr Duhalde can be blamed, forcing a surge in borrowing to help pay for a massive public-works programme.

And the consensus-loving Mr Remes Lenicov is not reckoned likely to stand up to his boss.

A natural Keynesian, Mr Remes Lenicov believes that free markets do not offer solutions to every problem, and that governments can help spend an economy out of crisis.

Those sort of ideas may have worked elsewhere in the past, but are not likely to calm investors at the moment, given Argentina's $141bn in debt.

See also:

04 Jan 02 | Business
Argentina braced for crisis measures
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