WASHINGTON—Two years ago, Brazilian Cardinal Claudio Hummes, who was a strong candidate for the papacy after the death of John Paul II, stunned everyone at a bishops’ synod when he said, “How much longer will Brazil continue to be a Catholic nation?”

Pope Benedict XVI’s visit last week to Brazil, the world’s largest Catholic nation, echoed in many ways the anguish of Cardinal Hummes and, by extension, of bishops across Latin America, where the Catholic Church has lost about 20 percent of its followers to various evangelical groups in recent decades. The pope’s open condemnation of the “sects,” as he calls the Pentecostal groups and other evangelical denominations, is a clear acknowledgement from the Vatican that the world’s largest Catholic “reserve” is under threat from spiritual competitors.

The threat is not all that recent. Although Protestantism managed to sneak into Latin America as far back as colonial times, when Martin Luther’s teachings circulated in clandestine form around the continent, the challenge really began in the 1950s with the arrival of Jehovah’s Witnesses. Later, it gained strength with the proliferation of various evangelical groups.

In Guatemala, about 30 percent of the population considers itself Protestant today and the success of the “assault” on Catholicism can be measured, for instance, in the fact that the Christian Fraternity, the largest evangelical group, is about to inaugurate the biggest religious building in Central America—it will seat 12,200 people. In Brazil, God’s Assembly, the strongest Pentecostal movement in the country, brings crowds that easily rival those of soccer matches. Between one-fifth and one-fourth of Brazil’s population has deserted the Catholic Church in favor of Protestant churches.

Why is this happening? The conventional explanation is that the Catholic Church was always part of the elites that governed Latin America and is paying the price for its long association with the status quo. The “right wing” explanation is that Liberation Theology—the Marxist movement that split the Catholic Church in Latin America in the 1970s and ’80s—has contributed to the demonization of the Vatican and the traditional hierarchy. The “left wing” explanation is that the Vatican’s reaction against Liberation Theology—led by Cardinal Joseph Ratzinger, the present pope, who was in the ’80s and ’90s the prefect for the Congregation for the Doctrine of the Faith—hurt the effort to bring the church closer to the people, thereby leaving a vacuum that has been filled by evangelical competitors.

I tend to think that the Catholic Church has failed to address the concerns of poor Latin Americans in the same way that traditional political parties and institutions have failed to make themselves relevant to millions of people. The switch to other religions is the equivalent of the vote for “outsiders” when it comes to presidential elections or the evasion of taxes, licences and regulations when it comes to everyday economic activities—what is known as the “shadow economy.”

In the case of the Catholic Church, the efforts of Liberation Theology to bring the church closer to the people through Marxism clearly alienated ordinary Latin Americans who experienced, through revolution and counterrevolution, the horrors of armed struggle and who suffered, through inflation, scarcity and suffocating bureaucracy, the rigors of the populist economy. But the conservative reaction was not very inspired either. The Vatican failed to see that people’s concerns with the status quo were perfectly justified. Latin America’s political and legal institutions were not conducive to social mobility and to grass-roots entrepreneurship.

The evangelical groups, by contrast, were quick to address those concerns. Unlike the Catholic bishops, they did not rant against the global economy and seek to berate the material world in the name of spiritual values. Instead, they preached about self-reliance and told their followers not to expect the government to solve all their problems. They encouraged poor communities to set up all sorts of voluntary self-help associations to provide the services that the authorities were quick to promise and slow to deliver.

The fact that Pope Benedict XVI included in his trip to Brazil a visit to a Catholic drug rehabilitation center that has partly sought to emulate the grass-roots social service network of the Pentecostals indicates that Rome is not about to give up the fight against the “sects” any time soon. That’s a good thing. Competition never hurts the consumer, even in matters of the spirit.