President Raul Alfonsin, facing labor unrest and an erosion of public confidence in his economic program, announced a drive tonight to streamline the public sector and spur exports in what he said was a bid to carry Argentina from its new-found monetary stability into a period of growth.
Outlining plans to sell six state-owned companies and boost financial assistance to exporters, Alfonsin launched "the first phase of the second stage" of an economic revitalization plan begun nearly eight months ago that concentrated first on choking what had been a crippling hyperinflation.
With the monthly inflation rate having dropped from 40 percent last June to approximately 3 percent in January, Alfonsin declared the leveling of prices "the first great structural change that we have produced."
"Our task now is to convert stability into growth, to open -- on the basis of sound money -- channels of industrial development, incorporation of technology, agricultural expansion and the conquest of world markets," the president said in a nationally televised speech.
The decision to sell a handful of state-owned petrochemical and steel plants marked Alfonsin's first major effort to cut the deficit-burdened public sector and signaled the opening of a national debate on the economic role that the state is to play after years of extensive government management of industry.
The state owns 353 firms, dealing not only in water supplies and phones but train and plane travel. Accounting for 35 percent of public spending and employing a total 350,000, the enterprises often have been run inefficiently, requiring huge subsidies to stay solvent and causing an expensive drain on the national treasury.
Many Argentine commentators viewed tonight's speech as an attempt by Alfonsin to regain the political initiative lost last month to labor unions, which succeeded in shutting down most business activity during a 24-hour work stoppage in protest over low wages and foreign debt payments.
Public support for the government's austerity program -- which initially included a freeze on wages and prices, a stop on the printing of new money and the introduction of a new currency called the austral -- has waned in recent weeks as prices have crept up despite official controls. Unemployment has risen, and industrial sales have slumped. Labor and business leaders have joined in urging Alfonsin to adopt a more progrowth policy.
Ridiculing the "fossilized slogans" and "supposed magic formulas" of some of his critics, Alfonsin lashed out at union officials who have called for a moratorium on payments of the country's $50 billion foreign debt in order to free up funds for domestic development.
"What they are asking for is nothing less than a measure that no government in the world, capitalist or socialist, has adopted up to now," said Alfonsin, "and they reproach us for our resistance to converting ourselves into an extravagant world exception."
But despite the reaffirmed commitment to foreign creditors, relations between Argentina and the International Monetary Fund have become strained again as a result of disputes over the setting of balance-of-payments and other economic targets for 1986.
A lack of agreement has prevented Argentina from drawing $262 million from the IMF, the third instalment of a standby loan signed last year.
The president's aides were hoping to repeat the political success Alfonsin scored last June with the austral plan. Tonight's pronouncement took the same form. Speaking in energetic, serious tones, Alfonsin delivered an essentially political message and was followed by Economics Minister Juan Sourrouille, who provided details of the new economic actions.
Confirming the planned sales -- a move that had already been reported in the local press this week -- Sourrouille said the divestitures would affect one steel company (Somisa) and five petrochemical firms.