Argentina and the IMF (1990-2022): this time is different?

FLORENCIA SEMBER; ROBERTO LAMPA

Torino

Congreso; Riunione Scientifica Annuale della Società Italiana di Economia; 2022

Università di Torino

In a February 2020 press release, IMF directorKristalina Georgieva stated that she shared the Argentinian government´sconcerns about "stabilising the economy and protecting the most vulnerablesectors of the society, thus securing a more sustainable and inclusive economicgrowth". Despite Argentina´s incapability of paying the biggest loan inthe history of the IMF, the first objective of the IMF was to guarantee"economic growth and employment". The payment of Argentina´s debt hadto be discussed only once economic recovery had been achieved.  In light of similar and reiterated statements, severalanalysts (Bruder, 2020) and academics (Cherif et al., 2020) emphasised that theIMF had finally changed its attitude towards indebted countries, leavingausterity and fiscal consolidation behind. Along these lines, they concluded that underGeorgieva´s direction IMF would have completed its transformation into aprogressive institution, which began already in 2011 when the Fund acceptedemergency capital controls (Ostry et al., 2010 y 2011) and countercyclicalfiscal policy (Blanchard et al., 2010)Given this premise, the general objective of our workis to analyse whether the ongoing negotiations between Argentina and the IMFhighlight such a "progressive" approach.More precisely, we aim to provide a historical andanalytical discussion of the ruptures and continuity in the thirty-yearrelationship between Argentina and the IMF. In particular, we focus on the1990s and the post-2016 scenario.In order to answer this question, some issues have tobe carefully analysed. After Argentina´s 2001 crisis, the IMF asked for adetailed report from its Independent Evaluation Office, particularly about theFund´s role in the biggest crisis of Argentina´s troublesome history. Quite surprisingly, the report blamed the IMF´sattitude toward the country, labelling it as an exceptional case of "toomuch ownership". In the future, the IMF should modify its conduct towardsdebtors, particularly by implementing more effective surveillance upon theuse/misuse of the disbursements. In 2006 Argentina eventually paid its debt,contextually suspending the article IV missions for ten years. In 2016,however, the new administration led by Mauricio Macri reintroduced suchmissions, and only two years later, Argentina received the biggest loan in theIMF´s history (56 bln USD). Currently, Argentina is in a dramatic crisis,negotiating a solution to such debt, which the country can not pay for. In asimilar vein to 2001, the IMF has been harshly criticised for the misuse of thedisbursements by Macri´s cabinet, which explicitly violated IMF Article VI. Drawing on this comparative analysis, we aim to verifywhether the Fund changed its attitude towards developing countries or such achange is just a narrative.