Argentina's Reform Effort Goes Awry; Alfonsin's Failure Points To Pitfalls for Brady Plan
The name of former Argentine Economy Minister Juan V. Sourrouille was misspelled in yesterday's Business section. (Published 4/24/89)</br></br>Nearly four years ago, the fledgling democratic government of President Raul Alfonsin launched an economic program of wage-price freezes and a new currency that promised a fresh start for an Argentine economy mired in inflation and stagnation for decades.</br></br>At first it worked. Normally cynical Argentines reveled in their newfound price stability, giving Alfonsin a massive outpouring of popular support. The stage was set for the next phase: taking on entrenched business and labor interests to enact long-term measures to increase competition and encourage growth.</br></br>The measures-such as selling off money-losing state enterprises and deregulating heavily protected private industries-were precisely the types of changes U.S. Treasury Secretary Nicholas F. Brady called for last month as part of his new strategy to reduce the debt burden of the hard-strapped nations of Latin America.</br></br>But instead of acting when his administration enjoyed political strength, Alfonsin squandered what many considered to be the best chance in a half century to reverse the steady decline in the economic fortunes of Argentina.