Argentina, the Church, and the Debt

Abstract

The Argentine debt crisis of 2001–2002 and its aftermath are examined in the light of the moral framework of Catholic social teaching on the debt problems of poor countries. The author, a former practitioner in emerging-markets finance, seeks to bring together and interpret the church’s teaching (which was mostly worked out in the 1980s) in the particular economic and social circumstances of Argentina in the early 2000s. The key question is how closely the outcome of the debt crisis in Argentina conformed to what social justice, in the Church’s interpretation, would have required. The main conclusion is that the resolution of the crisis was broadly consistent with that teaching. The crisis was managed with pragmatism rooted in shared (by debtor and creditors) concerns for social justice—more so than had been possible in the earlier Latin American debt crises in the 1980s, which the author had also witnessed. For that, many factors are responsible, including the emergence of civil society in Argentina and changes in the system of emerging markets finance. The author argues, however, that the moral framework of the Catholic Church on matters of international debt may deserve some of the credit.