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Argentina's Test of Faith

April 01, 2002

More than just disturbing, the picture coming from a television station in Rosario, Argentina, was ominous. It showed more than 100 slum dwellers rushing toward an overturned cattle truck. Then, using sticks and knives, the men, women and children slaughtered the animals. By the armfuls they carried away chunks of meat, the first they had had in a very long time.

The sight was another turn of the screw in this country's painful and prolonged predicament. Hours before, another TV station had shown images of angry depositors taking over a bank branch in the resort city of Mar del Plata.

As scenes like these are repeated across this once proud and prosperous land, the Argentine government is pushing the International Monetary Fund to speed up a loan of $25 billion that would help stir the nation's ailing economy.

Concerned for the South American country but cautious, the IMF insists that Argentine authorities produce a workable economic reform program. In addition, U.S. Treasury Secretary Paul H. O'Neill is applying pressure from Washington, urging the Argentines to "move to a sustainable position."

Both the IMF and the U.S. government properly want to be confident that the new money won't follow the path of past loans and end up feathering the nest of some corrupt politician. A solid economic recovery plan is essential to build international trust.

Meanwhile, Clarin, the largest newspaper in Argentina, last week published a piece of investigative journalism showing another face of the crisis. The well-respected journal found that last year wealthy Argentines took $13 billion out of the country and now were keeping more than $106 billion abroad. This is equal to 76% of the country's external debt and larger than its annual gross domestic product. Almost $30 billion is in bank accounts, and a similar sum is held in bonds and stock market shares.

The government should urge the jittery investors who sent money abroad to repatriate a fraction of it as investment in Argentina's future. This would be a show of good faith. The people of Argentina must demonstrate that they believe in their country before they can rightly ask others to do so.

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