IMF “fun” with Argentina

25 March 2002

IMF lending to Argentina could resume in the coming months under specific conditions. After completing a ten-day mission in Argentina, recently appointed IMF Director for Special Operations Anoop Singh said “approval of the 2002 budget by Congress, as well as the recent agreement between the Government and Provincial Governors, are important steps in this direction”. However the Argentinian government will have to revise its programme as the IMF thinks its inflation and growth forecasts were too optimistic. The 2002 budget plans further cuts in civil servants’ salaries and increases in export taxes to raise revenue from a predicted export surge owing to currency devaluation. President Duhalde met Horst Köhler in Monterrey during the Conference on Financing for Development.

Singh’s control of Argentinian negotiations may indicate dissatisfaction with the IMF‘s Western Hemisphere Department. But Thomas Dawson, External Relations Director of the Fund, gave another explanation of the Fund’s approach. When asked by a journalist in January about the lessons learned from the Argentinian crisis, he candidly explained that one of his ambitions in his job is “to make new mistakes, not old mistakes”. He even predicted new IMF failures: “I think we have learned some of the lessons of the past, but that is not to say that mistakes are not made again in the future. And that is life. That is economics. And that is why it is so much fun”. Most Argentinians do not share his sense of humour.

Press briefing with Thomas Dawson