U.S. urges patience in Argentina, wants Venezuela recall vote this year

By Hugh Bronstein and Gram Slattery

BUENOS AIRES (Reuters) – U.S. Secretary of State John Kerry on Thursday urged Argentina to be patient with the slow pace of economic progress under its new government, and urged Venezuela to allow a vote this year on whether to recall President Nicolas Maduro.

In his first trip to Argentina as America’s chief diplomat, Kerry praised President Mauricio Macri, a free-markets proponent who took office in December promising to attract a wave of private investment that has yet to materialize.

Kerry also said he was concerned that the government of Venezuela has failed to enter into meaningful dialogue with the opposition, which is trying to organize a referendum to kick Maduro out of power.

“We encourage Venezuela to embrace the recall not in a delayed way that pushes it into next year, but to do this as a sign of respect for the constitution of the country and the needs of the people of the country,” Kerry told reporters.

The timing is crucial because if Maduro were to lose a referendum this year, as polls indicate he would due to the country’s moribund economy, it would trigger a new presidential vote, giving the opposition a chance to end 17 years of socialism.

But should he lose a referendum next year, Maduro would be replaced by his vice president, maintaining the Socialist Party in power until the OPEC nation’s next presidential election scheduled for the end of 2018.

“BAD HABITS”

Kerry also addressed growing discontent voiced by Argentines over an economy beset by stagflation.

“It’s not all going to change overnight,” Kerry told a group of business leaders at a breakfast meeting in Buenos Aires.

“Getting rid of bad habits takes a little bit of time and investment takes a little bit of time to take hold and begin to create momentum,” he added. “But I am 100 percent confident, as is President Obama, that Argentina is on the right course. People need to be patient.”

Macri’s policies follow heavy state control of the economy and allegations of corruption under previous leader Cristina Fernandez. Her former secretary of public works was caught in July trying to hide almost $9 million in a Buenos Aires convent.

Argentina’s economy is expected to shrink 1.3 percent this year, according to a central bank poll of analysts. The government has not made a forecast.

Kerry met with his Argentine counterpart Susana Malcorra to discuss issues including Venezuela.

Fernandez supported Hugo Chavez’s self-styled revolution in the oil rich country, and the administration of his protege Maduro. Macri is one of the region’s leading critics of Maduro, accusing him of unjustly jailing opposition leaders.

From Buenos Aires Kerry was set to go on to Brazil where he will attend the opening ceremony of the Olympics on Friday.

Headwinds from Argentina’s recession-racked northern neighbor are not helping Macri’s investment push. Brazil, the region’s biggest economy, has been paralyzed by corruption scandals and political turmoil after the suspension of President Dilma Rousseff from power.

(Editing by Phil Berlowitz)