Argentina: Penniless, Friendless, Soulless

The rioting plaguing Argentina--which has cost the president his job--is the desperate act of a forlorn populace facing economic ruin. However, what many international observers are not acknowledging is that the current crisis extends far beyond the country’s chronically troubled economy.

In spite of the resignations of President Fernando de la Rua and his top two financial aides, Domingo Cavallo and Daniel Marx, the dispute over economic issues represents just the shell of the structure, with the rotted foundation of Argentine society buckling.

Argentina is close to being a lost cause. While overwhelmed by a massive foreign debt of $155 billion, economic mismanagement may be a function of the current crisis, not its generative force. The array of financial problems facing the nation--including liquidity, servicing the country’s mountainous foreign debt and massive dollar flight due to faltering investor confidence--should be seen as manifestations of a profoundly leprous society.

Argentina is the antithesis of an intact civil society. The country lost its soul during the “dirty war” from 1976 to 1983, when its bestial armed forces wantonly murdered more than 25,000 civilians with impunity. The nation then lost its mind as corruption and opportunism suborned all aspects of national life.

Now, due to massive venality, which for decades has been the protoplasm of the country’s bureaucracy, media, armed forces, commercial sector, judiciary and presidency, most Argentines feel alienated and are finding it impossible to live dignified lives. They eye their leaders with cynicism and place most of their trust in athletes and fast horses.

Much of this disillusionment stems from Argentina’s past.

The armed forces remain unrepentant for past atrocities. At the end of the dirty war, which disgraced the country’s instinctively anti-democratic military, only a handful of rights violators faced punishment beyond a loose system of house arrest. The military was extended an amnesty by several timorous civilian presidents, including Carlos Menem--who recently was released from house arrest on charges of profiting from illegal arms sales to Croatia and Ecuador.

Today, he is ready to assume office in the aftermath of De la Rua’s downfall, and the same armed forces could again be the beneficiary of the political collapse as an exasperated public grasps onto the discredited military.

In spite of Argentina’s reputation for violence, lawlessness and corruption, the country is being treated by the international community as if it were a model democracy. Nothing could be further from the truth.

An IBM scandal, in which the U.S.-based corporation was accused of giving senior officials of the Argentine central bank a $25-million bribe to land a $250-million computerization contract, is joined by almost daily media revelations of massive payoffs and the defalcation of public funds.

The United States, the International Monetary Fund and the World Bank all share culpability for Argentina’s plight because they were well aware that it was less a democracy than a kleptocracy, and that a portion of any funds sent there would be almost automatically siphoned off into deep pockets.

Older Argentines bitterly recall that some of the debt dates to the late 1970s and early 1980s. During this era, David Rockefeller was accused of arranging bank loans for the Argentine military junta after the constitution had been suspended and the legislature disbanded. The loans were more political than financial.

The bloody protests whipping the country suggest that Argentines have lost their optimism and traditional smugness. All that can be expected from the politicians is demagoguery as the two major parties--the Radicals and Justicialists--are both renowned for their corruption and cronyism.

The past weeks’ events have made it dramatically clear that De la Rua, the so-called reformer, has proved to be a disaster in virtually every sense; sadly, his resignation is his finest act of governance.

In the face of political and social chaos, Argentines are questioning their society as well as their relationship with Washington and the international lending agencies.

They understand that Argentina, once lauded as the model for neoliberal policies, can no longer survive on IMF bailouts or flawed development models.

They also are painfully aware that the traditional process of solving problems by throwing public funds at a political elite that only asks what it can take this time is doomed to fail.