Argentine bail-out causes more hardship

12 December 2000

After weeks of jockeying by the Argentinian government, the IMF and the US Treasury Department finally agreed to provide $18 billion to bailout Argentina’s troubled economy in November. In return the government must implement further austerity measures, including spending cuts, deregulation of the pension system and tax hikes. The agreement provoked thousands of Argentines to join a 36-hour national strike. Protesters set off fire crackers and beat drums outside government buildings and blocked roads leading into Buenos Aires and clogged main avenues to the city center in one of the largest strikes in years.

“We can’t go on living like this. The government promised us change, but all it has done is deepen the problems of those most in need,” said Alejandro Lencina, a 71-year-old retired accountant. The IMF has warned that Argentina risks defaulting on its debt unless key reforms are promptly implemented. The government must take resources from social programmes and pensioners to make sure it has the resources to pay its debts to foreign investors.