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Last Updated: Sunday, 21 October 2007, 14:57 GMT 15:57 UK
Will Cristina head off another crisis?
By Daniel Schweimler
BBC News, Buenos Aires

President Nestor Kirchner and his wife Cristina
Mr Kirchner's wife looks certain to take over the presidential role
Just a few years ago Argentina was deep in crisis.

It defaulted on its foreign debt, bank customers were prohibited from withdrawing their own savings, businesses went bust and almost half the population found itself below the poverty line.

But now, for most, those troubles are a distant memory.

President Nestor Kirchner's government paid off Argentina's debt to the International Monetary Fund, construction is booming, exports are up, annual growth averages 8% and the rates of poverty and unemployment are looking much healthier.

So it is not surprising that Mr Kirchner's wife, Cristina, is well ahead in the opinion polls and looks set to take over from him after elections on 28 October.

But, as is often the case in Argentina, all is not what it seems.

Statistics and lies

Many simply don't believe official figures published by the national statistics office, INDEC.

INDEC workers protest outside their offices in Buenos Aires
INDEC staff have been very vocal about 'government intervention'
"Often the figures are not believable," says economist Alan Cibils.

"Since January, when the government doesn't like what the official figures are telling it - it decided basically to modify those figures.

"Nobody here, critics from the right and the left, believes what they're saying," he adds.

Even INDEC workers regularly demonstrate outside their Buenos Aires offices over what they claim is government interference.

"We're trying to defend the way we work. We use methods that are recognised internationally and they're being tampered with," says union leader Daniel Fazio.

In recent months, top people at INDEC have been appointed and then replaced - critics say by government appointees.

Even an independent report produced recently by five economists warned official statistics were being "manipulated", and this had led to a "great uncertainty" about the true health of the economy.

Price worries

According to the government - using INDEC figures - annual inflation is just a little under 9%. But others claim it is actually running as high as 15% or 20%.

Inflation is a sensitive issue in Argentina where many still remember the pain caused by hyperinflation at the end of the 1980s when prices went up by the day and savings disintegrated.

To keep prices low, President Kirchner's government has pleaded with - and occasionally threatened - supermarkets and meat producers.

His strategy worked for a while but some critics say that high inflation is unavoidable with an economy growing as fast as Argentina's.

Walking the streets of Buenos Aires - with its designer shops and fancy restaurants - it is easy to believe the government when it says that things are going well.

But there is Buenos Aires and there is the rest of Argentina.

Different perspective

The southern town of Rio Gallegos is a little cleaner and more modern than many in Argentina.

Political demonstration in Rio Gallegos
Mr Kirchner's home town has been at the centre of recent unrest
The surrounding province of Santa Cruz has oil and natural gas and workers with money to spare who frequent the town's restaurants and shiny new casino.

It's also the home town of President Nestor Kirchner, where he served first as mayor, then provincial governor.

But while his popularity is high in much of the rest of Argentina, Rio Gallegos has been the focus of some of the angriest and most violent labour disputes in recent months.

Teachers' union spokesman Pedro Munoz claims Mr Kirchner's time in local government was merely a rehearsal for the presidency, saying: "He puts his people in control and has almost no contact with the press or the opposition."

Wealth worries

Santa Cruz, he added, is a wealthy province with a small population but the poor distribution of wealth means that many don't reap the benefits of its boom.

But provincial governor and close friend of President Kirchner, Daniel Peralta, dismissed Santa Cruz's troubles as the "normal teething problems" associated with growth.

"I take the economic and political decisions here," he said. "And if I make mistakes, they're my mistakes. But if I need the president's help, of course I call him."

Apolinario Dominguez, 52, an Indian from the Toba ethnic group
Argentina's wealth is not reaching everyone it needs to
Wealth distribution problems are most clearly demonstrated in the northern province of Chaco - the poorest in Argentina.

Indigenous Toba people, living deep in the Impenetrable Forest, have been dying of hunger. They live in mud and stick huts with no running water and few prospects for the future.

Traditionally, the Toba hunted and gathered their own food or did seasonal work in cotton fields.

But now genetically modified soya is replacing the cotton fields - as well as cattle and forest lands.

Reliance on the crop is leading to what Greenpeace warns is leading to a critical state of deforestation.

But with world prices for the crop at a high and demand surging settlers are now using slash and burn techniques to clear forests and plant more soya.

It's a short-term investment because the land, if not treated properly, soon loses its nutrients and becomes barren - a metaphor some say for the whole of Argentina if long-term investment, that looks beyond the next elections, is not implemented.

But while the money's flowing and with elections just a few days away, no-one is putting the brakes on anything.

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