NEW YORK -- Argentina is now experiencing one of its most severe economic and social crises in recent history. Riots are spreading through the country and the government seems increasingly unable to control the situation. The declaration of a state of siege for 30 days, although a necessary measure to control riots in which more than 5 people were killed and dozens injured, shows the seriousness of the situation. If not controlled, the crisis could bring about a popular revolt with incalculable consequences for peace and democracy in this beleaguered country.
Increased borrowing from international lending institutions, notably the International Monetary Fund, has not done much to improve the country's economic situation and overcome the present crisis. If Argentina is to go back to being a state under the rule of law and with sound social and economic development, it has no alternative but to default on its current debt. The sooner this is done the better it will be for the country and -- in the long run -- for the international community.
The government's efforts to reach a zero-deficit budget proved to be impossible, and in its eagerness to satisfy foreign creditors it imposed on Argentines draconian conditions that have had a negative effect, particularly on the poorer sectors of the population. In addition, if not controlled, the crisis in Argentina may spread to Brazil and Chile, whose currencies have depreciated almost 20 percent this year.