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Churches on Argentina's Fiscal Crisis: 'It's a Mess'
02023
16-January-2002

Churches on Argentina's Fiscal Crisis: 'It's a Mess'

Widespread disagreement on economic fix

by Chris Herlinger
Religion News Service

NEW YORK CITY - Argentina's financial crisis has prompted calls for reform by that nation's Roman Catholic and Protestant clergy, and has also exposed the potential social perils of the international financial system, say a number of church-based analysts.
	The crisis - spawned by a default on a portion of its $141 billion debt and a devaluation of the Argentine currency- has left the country politically and financially paralyzed. It brought down the government of former President Fernando de la Rua in late December and resulted in the spectacle of five men serving as president of Argentina in less than three weeks.
	The current president, Eduardo Duhalde, said he opposes the free-market reforms that some contend precipitated the crisis in the first place and says he supports Roman Catholic social teaching critical of such reforms. Free-market advocates, meanwhile, are worried that Duhalde will reinstate protectionist policies they claim are at the root of the nation's financial woes.
	Regardless of who is right about the economy, Duhalde's hold on power is by no means secure, in part because there is so little trust in Argentine public institutions and political leaders right now.
	"It's a mess," said the Rev. Oscar Bolioli, the former head of the Methodist Church in neighboring Uruguay and recently named the National Council of Churches' associate general secretary for international affairs. Bolioli and other members of a church delegation met with de la Rua last fall and Bolioli said the former president called growing social unhappiness over the economy an "exaggeration."
	Bolioli added, "He never realized the extent of the problem."
	He does now. Not only did the crisis prompt de la Rua's resignation, it also caused wide social unrest and dislocation. Dozens died in street protests, and members of Argentina's middle class now find themselves joining the nation's poor in scavenging the streets for food.
	The crisis worsened in late December when the International Monetary Fund, under pressure from the Bush administration, refused Argentina a line of credit to help it meet its foreign debt repayments.
	In recent days, protests have centered on a new government policy to freeze some banking deposits. That prompted one man, Reuters reported, to declare on television: "If I rob a bank, they throw me in jail. But if they rob me, then they say that's OK."
	The situation, the nation's Roman Catholic bishops said in a Jan. 1 statement, is one of  "extreme gravity and (is) close to anarchy."
	While not expressly condemning the international financial system, the statement by Archbishop Estanislao Karlic, the president of the Argentinean bishops' conference, left little doubt that Argentine church leaders believe the country needs to take a new social and economic course, saying there is a need to protect the poor, the unemployed and
the elderly.
	A group of Argentine Protestant churches went even further, saying Argentina needed help in lightening "the burden of foreign debt, which brings misery and death to millions of people." In a Dec. 20 letter signed by Argentine Lutheran churches, as well as Methodist, Reformed, Anglican and Waldensian churches, Protestant leaders urged the nation's leaders to respect "the life of our people."
	"Enough paying attention only to respecting foreign debt and its interest!" they said. "Pay attention to the desperate cry of the people instead of the noise of the market!"
	In a Jan. 10 statement, the Rev. Konrad Raiser, general secretary of the World Council of Churches, praised the response of Argentina's churches to the country's "ethical and spiritual" crisis.
	He urged "Christians, churches, people of other faiths and all men and women committed to peace to join forces to overcome this crisis and build a society of greater justice and solidarity in Argentina." Raiser also called on Argentine political leaders to "put an end to corruption, impunity and abuse of power and to take immediate steps that will lead to genuine national reconciliation based on justice."
	Karlic echoed those sentiments, saying recent events had "shown the depth of our moral crisis, evident in our economy, our politics and in all our culture." While appealing for an end to street protests, Karlic also asked for a new sense of responsibility among the nation's political leaders.
	"We need, more than ever, leaders who are capable of greatness and self?sacrifice," Karlic said. "It is now absolutely necessary for our politicians to look only to serve the common good - that is to say, the welfare of each and every member of our community."
	By all accounts, that will not be easy to do.
	"There is a lot of blame to go around: corruption, political stalemates, weak political parties," said Eric Olson, an analyst for the Washington Office on Latin America, a church?sponsored education and advocacy group.
	A good deal of the blame is also being laid on the free?market reforms that had been sought by the IMF and other lending institutions and were first implemented under former President Carlos Menem.
	Those reforms - which included privatizing state industries and pegging the Argentine peso to the U.S. dollar - halted Argentina's legendary hyperinflation. But by pegging the local currency to the dollar, observers said, Argentina made exporting goods too expensive, helping fuel a recession now in its fourth year. Argentina's unemployment rate stood at more than 18 percent in October.
	Bolioli said the IMF model "has proven disastrous" for Latin Americans. Olson compared it to a case of "the medicine killing the patient."
	"By adhering to a strategy of exporting goods," Olson said, "countries can't invest in the internal things they need to grow: education, health care, basic human needs."
	Olson said the collapse of the Argentine economy and the resulting social unrest likely mean a broader and more critical examination of the social costs of "standard" free?market reforms, by politicians of both the left and the right.
	But as the Argentine economic crisis heated up in December, IMF spokesman Thomas Dawson affirmed the reforms adopted by Argentina, saying they had proven their worth. "The accomplishments over the last 11 to 12 years in terms of the defeat of inflation and so on (have) had a very positive effect in the country," Dawson said.
	Other pro?market advocates, such as financial analyst Mark Lewis, have said it would be a mistake for Argentina to return to an earlier time of protectionist policies. "Argentina and its neighbors cannot afford to abandon market liberalization policies and retreat into economic nationalism," Lewis wrote recently for Forbes.com.
	Nonetheless, some in Argentina say the reforms resulted in a "pizza and champagne" diet - a facade of prosperity that masked growing inequities.
	Out of a population of 37 million, at least 5.5 million Argentineans are believed to be living in extreme poverty - and their numbers, by all accounts, are growing.
	"You would think these riots would happen in an extremely poor country like Haiti," Olson said. But in Haiti, he said, poverty is so vast and is so common an experience that an economic collapse would not have the same effect as it would on a country such as Argentina, which has long championed itself as the most "European" of Latin American
countries.
	"When you have middle?class and upper?class people working and then it disintegrates and you can't feed your family, it's a shock."
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