Argentinian Bishops Say Crisis Exposes Flaws in International System

BUENOS AIRES, Argentina — Few, if any, Latin American countries resemble the United States as much as Argentina. A country made mostly of descendants of European immigrants, it became the richest Latin American nation after World War II, thanks to a strong work ethic, a bountiful agricultural sector and a high level of literacy and culture.

That's why the fall of two presidents in 10 days after the country's Dec. 19 social explosion is something very few predicted.

But it became inevitable when the middle classes, being wiped out by recession and shrinking salaries, took to the streets. Their protests — often violent — didn't stop until President Fernando de la Rúa, who enjoyed a 70% approval rating after his 1999 election, resigned as one of the least popular leaders in Argentinean history.

What went wrong in Argentina? Since 1983, Argentina has switched from military dictatorship to democracy, ended chronic hyperinflation in 1991 by introducing a peso pegged to the U.S. dollar, and joined the Mercosur trade bloc with Brazil, Paraguay, Uruguay, Bolivia and Chile to stimulate economic activity and attract foreign investment.

None of this was enough. Deeply affected by the slowdown of the U.S. economy, Argentina was forced by the International Monetary Fund to dramatically reduce the public deficit as a condition for an urgent $1.3 billion loan to avoid default on more than $130 billion of international debt.

There was only one way for de la Rúa's government to comply — cut state salaries, delay or simply stop paying social security or retirement salaries, and suspend almost any government purchase. But the consequences were inevitable: Hundreds of thousands of Argentineans lost their jobs or found themselves with reduced salaries.

Massive protests started Dec. 18 in several cities. The next day, after an unstoppable wave of protests during which police around the presidential palace in Buenos Aires exhausted their supply of rubber bullets and tear gas, de la Rúa resigned.

That dramatic move came after Congress, controlled by the opposition Partido Justicialista, rejected the president's appeal to share power.

‘International Usury’

Said Bishop Juan Carlos Maccarone of Santiago del Estero, one of the poorest Argentinian provinces, “The country exploded under the pressure of insensitive international usury and the insatiable voracity of local corruption.”

Like Bishop Maccarone, most of Argentina's bishops have criticized local corruption, but have especially targeted what Archbishop Carmelo Giaquinta of Resistencia described to the Register as “the stubbornness and stupidity of international organizations that were supposed to help us gain stability.”

Bishop Agustín Radrizzani of Lomas de Zamora said that “what the Argentinian people did on the night of Dec. 19 was a spontaneous act of decency and dignity.” Added Bishop Radrizzani, “The protest was not only healthy, but necessary to change course and light hope for the future.”

Others share the bishops' analysis. Frida Ghitis, a journalist, financial analyst and author of the book The End of Revolution, blamed the International Monetary Fund (IMF) for the crisis. “Clearly, fiscal discipline is a necessity, but IMF bureaucrats in Washington, and the governments that back them, should allow for some flexibility. Conventional wisdom has again proved wrong in Argentina. Stubbornly following its dictates will no doubt trigger a more painful crisis during the sweltering summer now just starting here.”

Immediately after de la Rúa's resignation, Archbishop Estanislao Karlic of Paraná, president of the Argentinean Bishops' Conference, issued a dramatic statement calling all political leaders to “a supreme moment of self-sacrifice and generosity” in order to “save the nation in this historical moment.”

Archbishop Karlic also asked Argentineans to stop violent actions and to “protect the structures of an authentic democracy, by living more than ever the social virtues of justice and solidarity.”

On Dec. 23, Congress elected Adolfo Rodriguez Saá, a politician lauded for expanding business during his tenure as governor of the desert province of San Luis, to rule the country for a period of at least 60 days.

As interim president, he quickly announced default on Argentina's international debt payments and pushed through a congressional bill authorizing the creation of the “Argentino” — a new currency slated to debut Jan. 15 alongside the peso that, unlike the old currency, could be devalued. And in a theatrical decision, he also cut his own salary to $3,000 a month and promised that no other public official would earn more.

Rodriguez Saá, however , did not reduce the banking restrictions imposed last month by de la Rúa, restricting withdrawals from accounts to $1,000 per month. Because of this, he faced a new wave of protests Dec. 29. The next day, support for his government having abruptly collapsed, he resigned.

Archbishop's Advice

With power reverting again to Congress, Archbishop Karlic told legislators on New Year's Eve that “the only way to rebuild our democracy on a rock foundation, and not on sand, is by heroically renouncing any personal ambition and by acting with prudence, wisdom and fortitude.”

Congress subsequently appointed Eduardo Duhalde, the runner up in the 1999 presidential election and a critic of free-market economics, as the new president until 2003.

In his opening speech, filled with criticism of the economic policies implemented over the last decade, Duhalde vowed to freeze debt payments and to use “the social doctrine of the Church as my guide.”

Like most Argentinean bishops, Archbishop Karlic has supported the decision to suspend debt payments. “Paying a debt is a moral obligation,” he said, “but never an obligation above the immediate needs of a people.”

For his part, Archbishop Giaquinta said he feels “great sympathy” to the idea of suspending debt payments. “We certainly have an obligation, as a nation, to pay the debt, but not to the international vultures,” he said in an interview released by the local Catholic news agency AICA.

“International organizations like the IMF have to understand that if a rich country of hardworking people falls down like this, it is not only because of internal reasons.”

Economic experts agree that in order to reactivate the economy, Duhalde and his successor must bring down the 20% unemployment rate, manage the overall external debt of $155 billion, and reduce a fiscal deficit of around $8 billion.

Argentinean Bishops' Conference representatives say that, because of the depth of the political crisis, financial institutions and creditor countries like the United States must pioneer a new, creative approach to help Argentina.

The bishops also believe that new general elections should be called, rather than having a non-elected president serve for up to two years.

Said one conference source, “The bishops agree that a general election ... would help restore public confidence in the country's political leadership.”

Alejandro Bermúdez is based in Lima, Peru.