Confident Russia to help crisis-hit Argentina
MOSCOW, Dec 20 (Reuters) - Russia offered a helping hand on Thursday to crisis-torn Argentina as Buenos Aires struggled with economic collapse, civil unrest and the resignation of Economy Minister Domingo Cavallo.
Foreign Ministry spokesman Vladimir Yakovenko said Russia hoped for a rapid end to the "long-running social-economic crisis" in the Latin American nation, once the powerhouse of its region but now deep in crisis.
"The Russian Federation, acting with other members of international organisations including the Group of Eight, has lent and will continue to lend its support to the creation of the external conditions necessary to normalise the domestic situation in Argentina," Yakovenko said in a statement.
He did not give further details.
Cavallo, accused in Argentina's latest crisis of failing to drag the economy back from the brink of the biggest debt default in history, was lauded as an economic guru when he visited Moscow in 1998 to offer his solution to a financial crash.
Russia had just devalued its rouble currency and was to default on some of its debt, making it an economic pariah in the eyes of the world's financial markets.
The Argentinian, who was economy minister under ex-President Carlos Menem from 1991-96, urged Russia at the time to apply the "Plan Cavallo." This included setting up a currency board to fix tight limits on how much money can be printed, a measure aimed at suppressing inflation and stopping devaluation.
The plan was widely credited with saving Argentina from quadruple-digit price rises in the early 1990s.
"Whichever (Russian) government is in power, sooner or later it will have to do something very much like what we did," Cavallo told Clarin newspaper after his 1998 visit.
Russia, after vigorous debate, did not employ the plan. It later staged a startling economic recovery.
Helped by a boom in oil prices, Russia is currently one of the few economies in the world to be growing and its stock market is one of the top performing bourses.
Its economy is expected to have grown by 5.0 to 5.5 percent in 2001, according to official estimates, with annual inflation at around 18 percent, slightly lower than the previous year.