Argentine President Wins 2nd Term : Latin America: Incumbent Carlos Menem avoids a runoff. His success in inflation fight is credited.

Argentine President Carlos Menem, drawing electoral support from the success of his battle against inflation, turned back challengers Sunday to win a second term in office, according to official returns.

“I stay in power,” Menem, 64, told a news conference. “It’s 4 1/2 years more that you will have to put up with me.”

The flamboyant leader of the Peronist Party is the first incumbent president to win reelection in Argentina since 1952, when voters gave a second term to party founder Gen. Juan D. Peron.

The constitution was changed to bar presidents from immediate reelection after Peron was overthrown by the armed forces in 1955. But Menem negotiated a constitutional amendment last year that allowed him to run again.

He follows in the footsteps of Peruvian President Alberto Fujimori, who won reelection in April after getting Peru’s constitutional ban removed.

Incomplete official returns after midnight, with 43% of the votes counted, gave Menem 47.9% to 32.1% for Sen. Jose Bordon, a renegade Peronist and candidate of a center-left alliance. Menem needed 45%, or at least 40% with a 10-point margin over the runner-up, to avoid a runoff.

A dancing, flag-waving crowd celebrated Menem’s victory to the beat of drums and the blare of brass in the Plaza de Mayo outside the presidential palace. When Menem appeared on the floodlighted balcony at midnight, the crowd greeted him with cheers and chants.

Speaking from the balcony, Menem said the Peronist Party “has become invincible,” and he promised “to continue this process of transformation of Argentina.” He added, “This triumph I owe to you, but I ask your permission to dedicate it to my son,” who died in a helicopter accident in March.

Bordon, 49, had conceded the election to Menem an hour earlier. “At this point we want to publicly recognize the sovereign will of the people,” he said.

A former governor of Mendoza province, Bordon was handicapped by a shortage of funds and lack of a nationwide organization. He started his campaign in March after winning the nomination of a new political alliance called Frepaso.

Horacio Massaccesi, the candidate of the traditional Radical Civic Union, finished third with between 14% and 18%, according to the exit polls. Massaccesi, 47, is governor of Rio Negro province.

It was the first time in this century that the Radicals failed to finish first or second in a presidential race. In 1983, at the end of seven years under military rule, Argentines elected Radical leader Raul Alfonsin as president, but his administration ended in disgrace as hyper-inflation ravaged the economy.

Menem, Bordon and Massaccesi were the only three in a field of 14 candidates to win significant portions of the presidential vote.

Election day was dampened by rain in most of Argentina, which is South America’s second-largest country and has a population of about 33 million. Argentines also voted for 130 members of the 257-seat Chamber of Deputies, the lower house of Congress, and for governors and provincial legislators in 14 provinces.

The elections were marred by reports of irregularities in the province of Buenos Aires, which surrounds the capital. The Radical candidate for governor protested that many people were unable to cast ballots because other voters used national identification cards with the same numbers as theirs.

Sunday’s presidential contest was the third since 1983, when the armed forces left power. It is only the second time in Argentine history that democracy has lasted for three presidential elections. The previous time, in 1928, Hipolito Irigoyen won, but he was overthrown in 1930.

“We Argentines have been able to re-establish democracy since 1983,” Menem said Sunday morning. “Now, nothing or no one can deprive us of the pleasure of living in liberty, peace and harmony.”

Menem’s strongest appeal was his administration’s economic record. The economy has expanded by an annual average of more than 7% in the past four years, and last year’s inflation rate of less than 4% was the lowest in South America. By July, 1989, when Menem took office, inflation had rocketed to nearly 200% a month.

Business student Federico Banchero, 19, said he voted for Menem mainly “for fear of inflation. I don’t know if it would return with Bordon, but if Menem stays as president, stability will continue.

“I like what the government has done, and I have faith in it,” he said, but he added: “What has been lacking is jobs. There haven’t been enough jobs.”

Argentine unemployment is at a record high of more than 12% despite the rapid economic growth in recent years. During the campaign, Menem unveiled a five-year plan that he said would produce 330,000 new jobs a year, but Orilo Blandini was not convinced--he voted for Bordon.

“I’ve had it up to here,” Blandini said, raising a hand to his throat. Calling himself an unemployed businessman, the 56-year-old blamed Menem’s market economics for the failure of his small medical services company and for the rise in unemployment.

“I think the economic model imposed in Argentina is perverse,” he said. “It benefits big capital too much. It isn’t aimed at increasing employment opportunities.”

During nearly six years in office, Menem has privatized most of Argentina’s government-owned corporations, including petroleum, telephone and electric monopolies. Domingo Cavallo, his economy minister, engineered the successful anti-inflation policy, which included deep cuts in government spending, tough tax-collection efforts and a law that established parity between the Argentine peso and the U.S. dollar.

The collapse of the Mexican peso in December raised fears that Argentina also would be forced to devalue its currency. Since then, depositors have withdrawn more than $7 billion from Argentine banks, but Menem and Cavallo have weathered the storm, keeping the peso at one to the dollar.

Menem’s administration has also survived several corruption scandals, including one in which his sister-in-law and private secretary were charged with laundering drug money.