U.S. can prevent Argentina's ills from spreading

January 31, 2002|By Larry Birns and Jeremy Gans

WASHINGTON - Argentina's crisis is as much a product of distressed institutions as unsound financial planning. The core rottenness of the country's bureaucracy, which for a decade has been concealed by spurious attributions of democratic governance, finally triggered a flood of public outrage that even President Eduardo Duhalde's populist rhetoric may not cap.

Nor can billions of dollars resolve Argentina's current malaise and revive its economy. Rather, the inherent flaws of the South American country's failed political culture must be tackled, with the cure coming as much from below as above.

In the past 20 years, the civilian presidents who followed upon seven years of brutal military rule barely primed the country's democratization. Nor were Argentines renowned for demanding equable rulers, as witnessed by their support for the notoriously corrupt President Carlos Menem. Near-daily revelations of gross venality and cronyism contributed to the public's fatal skepticism that Argentina was irredeemably in the hands of officials motivated more by greed than public service.

The Bush administration sought to distance itself from Argentina's crisis. But while the United States and the International Monetary Fund insist that they are blameless for Argentina's chronic economic mismanagement, this may not be entirely true.

Washington consistently supported IMF aid programs solely conditioned on monetary and fiscal standards. As a result, Argentina's leaders repeatedly misused such money on ill-advised projects or pocketed it while the citizens were periodically lashed by crippling IMF-mandated austerity measures to service a mountainous debt.

At the same time, Washington and the IMF never insisted that a corps of honest officials should monitor the aid programs.

Accountability has been noticeably absent from U.S. regional policy. Since the Cold War's demise, Washington has maintained that open markets, together with free elections, were binary factors in constructing true democracy.

While this ideological preference has been converted to pseudo-science by a series of U.S. administrations, it failed to prevent their backing of tawdry regimes such as Mr. Menem's. But rather than giving him only a cold handshake for his administration's undeniable record of misappropriation of funds, the Clinton White House opted to throw him a tango party.

Such a gross flight from reality unquestionably helped breed the "anything goes" attitude that brought on today's institutional crisis.

The prevailing self-deception was helped by President Bill Clinton's superficial Latin American and Caribbean policies and his repeated references to the "34 democracies and one dictatorship." Recent revelations about the Stygian workings of such pathogenic "democracies" as Alberto Fujimori's Peru and Jose Lopez Portillo's Mexico, where death squads terrorized civilians, question the dubious criteria behind Washington's definition of democracy.

Argentina was lionized as the decade's "miracle" for its alleged success in twinning democratic institutions with free market policies, but only now are the country's calamitous underpinnings being exposed. Yet alarmingly, its basic substructure differs only marginally from those of other countries in the hemisphere. As a result, while the contagion effect of Argentina's default and devaluation appears momentarily contained, the same may not be true of an even more virulent political contagion.

Clearly, Washington cannot walk away from a churning Argentina, nor can it continue to rely on narrow macroeconomic solutions to Latin America's overwhelming problems.

Unless the Bush administration speaks out against the inequities of the grossly imperfect institutions concealed by the "34 democracies" mythology and insists on policies that address their societies' basic grievances, Argentina could be only the first in a series of hemispheric dominoes.

Larry Birns is the director of the Council on Hemispheric Affairs, where Jeremy Gans is a research associate.

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