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Argentina: President Optimistic Despite IMF Loan Conditions

by Bill CormierAssociated Press
August 23rd, 2001

BUENOS AIRES -- Argentina's president, having just secured $8 billion in emergency aid from the International Monetary Fund, announced plans for a referendum this year on cost-cutting moves aimed at fighting a recession.

In a televised address late Wednesday, President Fernando De la Rua told this South American nation of 36 million that the referendum would reduce the ''political costs'' of spending cuts and reforming social security and state-run health care agencies.

De la Rua said he wanted to hold the plebiscite after Argentina's October congressional elections, which are viewed as a major test for his administration's longevity.

''The moment has come for a transformation of our system, and the people are demanding reforms at once,'' he said.

''There are no miracle cures, nor magical solutions,'' said De la Rua, whose governmental belt-tightening moves have sparked near-daily protests, crippling national strikes and highway blockades by the unemployed.

Argentina is suffering from a severe economic downturn that began in 1998. The country's unemployment rate has soared to 16 percent. Meanwhile, the $130 billion public debt has embroiled the president in a monthslong crisis.

''We have to spend less, collect more and fight against tax evasion,'' De la Rua said in the address.

He vowed to curb further government spending, but said he wanted the country's backing for attempts to reform the social security and national health programs - both of which have been criticized as inefficient.

The president also said the government would revamp the Argentine customs and federal revenue office, both key components in tax collection.

The IMF announced Tuesday it would add $8 billion in loans to the $14 billion currently available to Argentina.

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