Diplomacy Celebration and Concern

By George Russell

There were fanfare and tributes aplenty in Washington last week as President Reagan paid homage to a distinguished South American guest, Argentine President Raul Alfonsin. There was also an exchange of sobering messages and differing perceptions. Above all, Alfonsin warned that the heartening tendency he represents, the return of democracy to Latin American nations, is too fragile to be taken for granted. As he put it, "Right next to hope, there is fear in Latin America, the fear that arises from the unsatisfied expectations of our peoples."

The contrast in tone was a recurring feature of Alfonsin's eight-day journey to the U.S., which included his first state visit to Washington since he took office in December 1983. For the White House, welcoming the Argentine President was a chance to salute the hemisphere's democratic transformation, of which Alfonsin, whose election ended nearly eight years of often brutal military dictatorship, is an apt illustration. It was also an opportunity to salve wounds left by U.S. support for Argentina's enemy, Britain, during the 1982 war over the Falkland Islands, which the Argentines call Las Malvinas.

Alfonsin's concern, however, was both more pressing and more serious: the worsening crisis Argentina faces in trying to cope with a $45 billion foreign debt and a towering 800% annual inflation rate. Thus the main item on Alfonsin's agenda was a plea for more money. He got a sympathetic hearing but apparently not much concrete satisfaction.

The difference in U.S. and Argentine preoccupations showed up plainly on the White House South Lawn, where President Reagan first met his visitor. After 21 guns banged out their salute and a fife and drum corps clad in Revolutionary War uniforms tweetled a welcome, Reagan declared that "the flame of liberty burns red-hot in Argentina." Taking note of Argentina's woes, Reagan advocated making "tough decisions" in the economic sphere, meaning austerity, as the best solution leading to recovery. Reagan also took the opportunity to extol his own hard-line policies in Central America, particularly vis-a-vis the leftist regime in Nicaragua. Said Reagan: "The free people of this hemisphere must not stand by and watch the Communist tyranny imposed on Nicaragua spread to the free lands of the Americas."

In reply the stocky, dignified Alfonsin cited the foreign-debt issue as "one of the biggest differences between our two countries" and told Reagan that overpowering economic problems "conspire against democratic systems." Nonetheless, Alfonsin noted that in conversations with U.S. leaders, "the subject of Nicaragua and Central America will not be absent." He added, in words similar to those he used two days later at a meeting with TIME editors (see box), "I am convinced that it is through dialogue that we will be able to reach peace."

During a subsequent hour-long private chat between the two Presidents, their differences over Central America remained muted. Alfonsin repeated his belief in the need for a peaceful solution in the region, along the lines suggested by the so-called Contadora group of Latin American countries--Colombia, Mexico, Panama and Venezuela--that is sponsoring regional peace talks. He did not challenge Reagan's description of the U.S.-supported contra rebels, who are warring against Nicaragua's Sandinista government, as "freedom fighters." According to U.S. officials, Alfonsin told Reagan that when pondering the Central American crisis, he took into consideration "data of reality," meaning U.S. national security concerns in the area.

The two men also discussed a situation closer to the Argentine leader's home: Chile, now the only major military dictatorship left in South America. Argentina, which shares a 2,500-mile border with Chile, is known to be deeply concerned that the Moscow-leaning Chilean Communist Party has with increasing stridency voiced support for "all means of struggle," including armed warfare, against the government of General Augusto Pinochet Ugarte. A U.S. official described Alfonsin's assessment of the problem as "not alarmist. He didn't urge the U.S. to take any action."

Reagan strove to be as tactful on economic issues as Alfonsin was on political questions. The U.S. President chose not to reply directly to Argentina's most immediate plea for U.S. assistance, a request for a $500 million "bridge loan" to help the country ride out the debt crisis. But Reagan did assure Alfonsin that, as a U.S. official later put it, "we stand ready to help where we can." Later, Reagan aides expressed skepticism that the U.S. could or would do much on the debt question. "He would like our support," said one U.S. official, "but I don't see any money coming from us."

Alfonsin raised the economic issue in public two more times during his Washington stay, in an address before a joint session of Congress, after which & he was given a two-minute ovation, and at a meeting of the 32-member Organization of American States. At the OAS he used his strongest language. "There are some who say that the burden of these debts should fall upon the backs of those who have less and those who receive nothing," he said. "If we were to accept that, the whole (South American) continent would have few chances of surviving."

Prior to the OAS speech, Alfonsin held what was probably the most crucial of all his meetings in the U.S., a breakfast session with Jacques de Larosiere, the managing director of the International Monetary Fund. The IMF had promised Argentina $1.4 billion in special credits in return for compliance with a severe anti-inflation program. Last week, however, the IMF suspended further disbursements of its funds on the grounds that Argentina is failing to meet specified austerity targets. Commercial banks did the same.

A deadline looms this Sunday, when the country must come up with $1.1 billion in interest payments, mainly to U.S. banks. A review of Argentina's economic adjustment program is still going on. This week, an IMF mission will fly to Buenos Aires for talks with the Argentine government.

With reporting by David Aikman and Alessandra Stanley/Washington