Hope from a Clockwork Coup

Buenos Aires one year ago was a city on the edge of anarchy. Almost daily, terrorists of the left and right kidnaped or murdered business executives, military officers and union leaders. Bombs ravaged army barracks, public buildings and vital industries. Under the inept government of Juan Peron 's widow Isabel, inflation in Argentina was galloping at an annual rate of 350%. The Treasury, down to its last foreign reserves, was about to default on its overseas debt. Then, on March 24, in a bloodless, clockwork coup, the military deposed Isabel Peron from the presidency. Led by the Commander in Chief of the army, Jorge Rafael Videla, the new junta set two goals: crushing terrorism and reviving the economy. How well has it done? Last week TIME Correspondent Barry Hillenbrand cabled this assessment:

Neither of the junta's aims has been wholly achieved. But a year after the coup, Argentina's military government has brought the country from paralysis to the edge of hope. Terrorism sputters on, but Argentines have learned to cope with it, even ignore it. Buenos Aires' boutiques and restaurants are jammed. The economy, though troubled, shows encouraging signs of strength. Proudly, President Videla claims, "We have progressed a lot in a short time, but we have a long way to go."

The fight against terrorism is far from over. Since the coup, 1,700 leftist guerrillas and 124 soldiers and police have died in what the military calls "the dirty war." The government has virtu ally wiped out one major terrorist group, the leftist Ejercito Revolucionario del Pueblo (E.R.P.). The other large guerrilla network is the Montoneros, who are also leftists with Peronist sympathies; most of their top leaders have been killed or captured, but they can still launch spectacular bombings, kidnapings and murders. One Shootout last week took place at Buenos Aires' evening rush hour, near the Supreme Court building. Says one military expert: "The guerrillas are not as strong, but they will be dangerous for some time to come."

The army's methods of countering terror are brutal. In a scathing report last month, Amnesty International, the London-based human rights group, accused the military of arbitrary detention, torture, summary executions and the "disappearance" of at least 500 suspects since the coup. Amnesty charges that many of the desaparecidos were innocent citizens abducted and murdered by soldiers and police in mufti; victims' bodies have turned up "at the bottom of lakes, decomposing in rubbish heaps or blown to pieces in quarries."

Members of the junta admit that torture takes place, although they deny it is systematic. They argue that harsh tactics are justified "in direct proportion to the nature of the attack." Says Videla: "What is Argentina to do? Does it defend itself or does it let its way of life be changed? I reply: Argentina must defend itself against this aggression." President Carter's decision in February to cut U.S. arms aid was received with angry dismay. "Carter does not understand us," said one officer. "He is playing into the hands of the terrorists, not helping the forces of democracy."

The shy, rail-thin Videla, known as el Hueso (the Bone), is regarded as a moderate within the junta. Videla, who has resisted demands from hard-liners like Navy Admiral Emilio Massera for sterner repression of intellectuals and students, is committed to restoring civilian rule "once the situation permits." The military, he says, "does not have a totalitarian calling." Nonetheless, some Argentines fear there are high-ranking officers who would like to establish a neofascist regime.

Cult of Peron. No one expects the junta to step down soon. Eleven years of Peron's rule plus another two decades of his baleful influence shattered and paralyzed moderate political forces. Even as Isabelita awaits trial for misuse of public funds, el Lider's cult retains its mystique. "People have no confidence in parties," concedes one anti-Peronist politician. "We are not ready for elections until Peronism is dismantled and forgotten."

That task has been assigned principally to Videla's wiry, pragmatic Economy Minister, Jose Martinez de Hoz, 51, former chairman of Argentina's largest private steel company. If the country's economy can be saved, business leaders agree, he can do it. Thanks largely to his conservative fiscal policies, Argentina's foreign reserves have grown in the past year from $23 million to more than $2.3 billion. After a $1 billion deficit in 1975, the country's 1976 balance of payments returned to the black, buoyed by a record 11.2 million-ton wheat harvest. International banks are again offering loans, and an estimated $400 million from foreign accounts held by inflation-wary Argentines has returned to the country.

Nonetheless, inflation courses on at 8% to 10% a month--lower than under Isabelita, but still corrosive. Accustomed to lavish salaries and the best and cheapest food in South America, Argentines are eating less steak and moonlighting to stay solvent. Real wages have plummeted by 50% to 60% in a year. But unemployment in Buenos Aires is only 4% to 5%--testimony to the muscle of Peronist unions, whose members provided el Lider's political infantry.

Videla is determined to wrestle down the unions' "political power and abnormal privileges." Toward that goal, Martinez de Hoz is trying to prune the mammoth state-run industrial sector, a Peron-era albatross that produces less than 10% of Argentina's G.N.P.--and much of the government's debts and deficits. State enterprises employ an estimated 300,000 unnecessary workers. But the Economy Minister's plans to cut bloated staff and sell losing businesses to private firms have run into strong union opposition. When Videla raised the work week of Buenos Aires' huge state electricity company from 35 to 42 hours and cut some fringe benefits, workers responded with a crippling go-slow action--poetically known as tra-bajoa tristeza (work with sadness). "The trouble with this country is that people have never gone hungry," grouses an angry naval officer. "They don't know what it is to work for a day's wages."

Increasing productivity and defeating inflation are clearly vital. It will not be easy for Martinez de Hoz to achieve this without creating massive unemployment and real recession. If that sort of tailspin came with living standards falling and terrorists still active, workers and their Peronist union bosses might be tempted to try something far less passive than trabajo a tristeza.

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