IMF fiddles while Argentina burns

24 July 2002

After the murder of 2 piqueteros on 26 June drew tens of thousands onto the streets of Buenos Aires, Argentine President Eduardo Duhalde has moved up elections scheduled for September next year to March 2003. In the face of rising protest against his administration, President Duhalde received support from Mercosur leaders in a 5 July meeting in Buenos Aires, where they joined Mexican President Vicente Fox in calling for the IMF to release billions of dollars of aid.

Despite repealing the financial crimes law on 30 May, an essential precondition to further loan negotiations, progress with the Fund remains exasperatingly slow. Argentina’s central bank president, Aldo Pignanelli, has said he now expects the country to sign a new deal with the IMF in August. This will come after an expected visit on 22-24 July of a team of “wise men” to draft a monetary policy and come up with solutions to salvage the banking system. The team will include the former central bank governors of Canada, Germany and Spain as well as the General Manager of the Bank for International Settlements.

In a stunt designed to draw attention to the IMF‘s role as head of an international creditors’ cartel, holding up credit from the World Bank, IADB, European governments and day-to-day business credit, a group of reporters cornered the head of the IMF‘s delegation in Argentina outside his hotel room and handed him a set of plastic Halloween vampire teeth. “We found these lodged in President Duhalde’s neck and wanted to return them to you.”

The real pressure on the IMF to ink a deal in Argentina is now coming from the threat of contagion. In a 1 July editorial, the New York Times chided the Bush administration for being “far too passive, making little effort to exhort the IMF to reach a deal with Buenos Aires.” Fear of financial instability spreading first to Brazil and then throughout the region, combined with a broader backlash against the liberalization agenda is fuelling the calls for action.

Anoop Singh, formerly Director of Special Operations and chief IMF firefighter in Argentina, has been appointed to Head of the Western Hemisphere Department of the IMF in an apparent snub to his predecessor (Bretton Woods Update 27, IMF “fun” with Argentina).

“Argentina’s contagion”, NY Times (run in IHT)

What are they doing to Argentina?, ZNet

Argentina partners pledge support, BBC News

Argentina moves up elections by 6 months, Washington Post, 2 July 2002

Argentine central bank chief see IMF deal in August, Forbes 8 July