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Friday, 26 April, 2002, 16:03 GMT 17:03 UK
Trade negotiator takes the helm
Argentina's new economy minister, Roberto Lavagna
Can Lavagna conjure a turnaround out of the blue?
For years, Italy's predilection for now-you-see-them, now-you-don't governments has been the butt of jokes in other countries.

In Argentina, though, the laughter is getting a bit hollow.

Buenos Aires has seen the back of four presidents since December - and the fifth has just lost his economy minister, Jorge Remes Lenicov.

Closed book

The person who is to fill Mr Remes Lenicov's shoes is Roberto Lavagna.


(Investors) will have to suffer as much as the general public

Roberto Lavagna
Argentine economy minister designate
Like Mr Remes Lenicov - and unlike the incumbent before that, the flamboyant Domingo Cavallo - he is generally seen as something of an unknown quantity.

"He's fairly obscure," Societe Generale emerging markets economist Stan Rudcenko told BBC News Online. "He hasn't done anything to make him famous."

The proof of the pudding, as Mr Rudcenko points out, will be in the eating.

The 60-year-old Lavagna flew back to Buenos Aires on Thursday night from his base in Brussels, where he had been ambassador to the European Union and in charge of Argentina's dealings with the World Trade Organisation.

Before that he was a professor - he is a graduate in economics of Harvard University in the US - and a consultant to a number of companies.

As for government experience, he served as industry and foreign trade minister in the 1980s, playing a major role in the creation of the South American common market, Mercosur.

Uphill task

This background on the world stage is probably the key to why Eduardo Duhalde, Argentina's hard-pressed populist president, picked him for the job.

Former economy minister Jorge Remes Lenicov, with president Eduardo Duhalde in the background
Can Lenicov's successor succeed in staying longer?
Few would deny that Mr Lavagna is inheriting a poisoned chalice.

Argentina has defaulted on $141bn of debt and the peso is dropping like a stone.

A quarter of its people are out of work, their savings frozen in a desperate move to avoid a wholesale collapse of the banks.

And given that - as one observer put it - "these guys have made so many promises and broken them that I've lost count", it is hardly surprising that the International Monetary Fund is keeping its pocketbook closed until Buenos Aires can show some evidence that it is getting things under control.

In other words, in the world of international finance Argentina's name is mud, its promises worthless.

So a man with strong free-market credentials and a background in global trade can at least get a foot in the door of the global moneylenders Argentina needs to get back on its feet.

So much to do...

Not that the job is getting any easier.

A deal in the past 48 hours reached between Mr Duhalde and his Peronist party's free-spending provincial governors to rein back public spending is providing some breathing space, and could help Mr Lavagna gain back some trust.

A boy eats food from a soup kitchen on a protest march by the unemployed
For some Argentines even food is hard to afford
But the devil is in the detail, as Mr Lavagna pointed out in an interview with Dow Jones Newswires. The 14-point plan needs fleshing out, and no-one is going to pay much attention until concrete action is taken.

For one thing, Mr Duhalde is muttering about a return to a pegged currency.

The peso's one-to-one link with the dollar was abandoned in December, having stamped on inflation but also ravaged the competitiveness of Argentine exports.

Since a peg only really works if the government is trusted to stick by it, Argentina's dismal reputation means that international bankers will be hoping Mr Lavagna can dissuade him from that.

For another, the banking question has only been put off for a few days - and Mr Duhalde's populist instincts could still get in the way of Mr Lavagna, should he decide to get tough.

Sharing the pain

Talking to Dow Jones, Mr Lavagna made it clear he had little time for making anyone's life easier - least of all the financiers who have invested in Argentina, and who have the most to gain from an IMF bailout.

Many of the billions pumped in by the IMF last year were earmarked for payback for investors and creditors, rather than for rebuilding Argentina's economy.

Mr Lavagna's reading of the principle of free markets means that this has to change.

Investors, he told Dow Jones, "will have to suffer as much as the general public".

With 40% of the population below the poverty line, the investors "are bound to the crisis with them, without any special treatment".

Not a remark that will gain him many friends, admittedly.

But could it be an indication of a balance between hardline fiscal rectitude and an awareness of the nightmare facing Argentina's citizens - a balance which Argentina badly needs?

See also:

26 Apr 02 | Business
Argentina gets new economy chief
26 Apr 02 | Business
Brief respite for hard-up Argentines
25 Apr 02 | Business
Argentina tightens banking freeze
24 Apr 02 | Business
Economy chief loses the plot
24 Apr 02 | Americas
Argentina president in crisis talks
24 Apr 02 | Business
Argentine economy chief quits
20 Apr 02 | Business
Argentina closes all banks
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