International Outlook: Global Wrapup
Sometimes, it doesn't pay to do a good job. Harvard University-trained Domingo Cavallo, Argentina's Economy Minister, rescued his country from hyperinflation by linking the peso to the dollar and starting a major privatization program. The result: Inflation is now 1.5% monthly, while the gross national product grew by 5% last year. Polls give Cavallo a 57% public approval rating, 12 points higher than President Carlos Menem's.
Now, Menem may be trying to undercut Cavallo's prestige, even if that risks hurting the economy. Menem clashed publicly with Cavallo during Argentina's recent stock market slide, a conflict that was widely noted by investors. They may hold back on future investment until Menem and Cavallo make peace.Edited by PETER GALUSZKA