ARGENTINA'S foreign debt of some forty-five billion dollars has long been the major worry of the international financial community. Although the debt is only half that of either Brazil or Mexico, the two nations with the world's largest foreign debts, Argentina's continuing economic chaos leads many an international banker to question whether the debt will ever be paid.
Moreover, the tentative calls for a debtors' cartel by President Ra'ul Alfons'in, as well as speculation that Argentina might adopt a moratorium on debt payments, has heightened the concern.
Thus, the recent International Monetary Fund agreement with Argentina has come as good news. The agreement does not end all concern about Argentina, but it does suggest that the Alfons'in government is not going to go it alone with a moratorium on its debt and is trying to put its financial house in order.
And well it should. Argentina is traditionally the country that most observers expected would be the economic leader of the hemisphere.
With superb soil, its agricultural potential is prodigious. With abundant mineral and petroleum reserves, it should be self-sufficient in this area. With the best educated population in Latin America, it has the human resources to be the leader.
But Argentina has not lived up to this potential and indeed has steadily slipped into economic chaos -- a disarray matched only by its political chaos under successive governments, both civilian and military, since the 1940s. Failing to embrace realistic policies, Argentina has become the great tragedy of Latin America.
The year-old Alfons'in governmnent is trying to reverse all this -- not, however, with immediate success. Inflation in 1984, for example, soared again, to almost 700 percent.
But the IMF agreement, which calls for austerity at home, along with postponements of some debt payments and new loans to bolster the sagging Argentine economy, may help to bring order to the Argentine financial house. It at least pulls Argentina back from the brink.
A lot now depends on whether the Alfons'in government can convince Argentines to live with austerity, a difficult task in any nation.
It won't be easy under any circumstance. But the Argentine-IMF agreement gives Alfons'in breathing room and offers hope among the financiers that Argentina may be beginning its journey out of its economic quagmire.