- The Washington Times - Saturday, December 22, 2001

Argentina's economic crisis has morphed into a social and political eruption of chaos and despair. The country's president, Fernando de la Rua, resigned Thursday and escaped the mayhem via helicopter. Twenty-four persons have died so far as a result of the riots and looting, and the violence used to put them down by both private citizens (mostly armed shopkeepers) and police officers. Argentines will not be celebrating a merry Christmas this year.
Argentines have witnessed economic crisis in the past, and it seemed, for some years, that the country had made notable strides in ensuring sounder fiscal management and financial institutions since the economic debacles of the 1980s. In order to stage a recovery from the height of the crisis in 1989, the Argentine people endured some belt-tightening and tight monetary policy. Still, it can hardly be denied that some serious problems persisted.
And this is where the recriminations start. Let's begin with the International Monetary Fund (IMF). Surely, officials at the fund didn't mean to provoke the kind of tragedy Argentina is going through currently. But unfortunately, the $20 billion in loans the IMF has pumped into Argentina have, obviously, failed to pave the way to recovery, and have only put Argentina deeper into debt. The IMF's generic policy prescriptions of raising taxes and cutting expenditures in times of economic turmoil seem to be precisely what ailing economies don't need. And the IMF has been traditionally reluctant to tie its loans to any kind of debt rescheduling between governments and private creditors.
And while it is difficult to hit a people when they are suffering, Argentines should keep in mind that when their flamboyant president, Carlos Menem who held power before Mr. de la Rua paraded around Argentina in his Ferraris, new presidential jets and with a seemingly endless succession of beauties, the Argentine people cheered, even though it was clear to all that Mr. Menem and his administration were rapaciously raiding the taxpayer chest and contributing to Argentina's massive debt load. Mr. Menem has been put under house arrest for his alleged role in an international arms-smuggling ring. Now, the Argentine people must mobilize to put an end to institutional corruption by demanding that their elected officials be held more accountable.
Unfortunately, the public mood doesn't seem to be moving in that direction. Instead, Argentines appear to be lashing out against free market forces and turning pro-socialist and, most alarmingly, pro-fascist. Power will now fall to the Peronist head of the Senate, Ramon Puerta, hardly a cheerleader for the free market. New elections are to be held within the next three months. If support for a socialist-style government prevails, economic prospects will be further undermined.
Hopefully, after order is restored and panic abates, Argentines will have enough sense to cast their votes against the Peronistas, and the country will be poised to reach its remarkable potential that has for so long seemed just out of reach.

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