Argentine Jubilee delegation meets IMF in Buenos Aires.

 

Dear friends,

 

On Friday, 15th March, 2002,  a small delegation (including Mario Cafiero, Argentine deputy, Prof. Kunibert Raffer of the University of Vienna, Stella Semino (Mr. Cafiero's assistant) and Ann Pettifor ) visited the IMF's offices in the Sheraton Hotel in Buenos Aires.  The delegation protested vigorously at IMF policies in Argentina, and their grave impact on the 35 million people of the country - more than half of whom have fallen below the poverty line.

 

The delegation proposed an alternative to the IMF's dominance in Argentina and gave a detailed presentation of the Jubilee Framework/Independent Debt Tribunal as a constructive and just way out of the impasse.  Fund staff present were interested and open to their proposals, and appeared not to have heard many of the finer points that NGOs have been making in the wider debate. However they did not consider an arbitration framework as appropriate for Argentina.  They informed the delegation that the process of developing the G7's proposal for an alternative framework was moving ahead within the IMF, with the participation of a range of external academics, including Nouriel Roubini. The delegation welcomed this openness in debate, and recommended that Prof. Raffer be invited to join the internal discussions.

 

Mario Cafiero briefed the Fund on the decision of the Attorney General in the previous week to give a green light to a legal process which will challenge the constitutionality of the controversial June 2001 "MegaSwap" organised by finance minister Domingo Cavallo. The grounds are that this megaswap was detrimental to the interests of the Argentine state.  Fund staff appeared unaware of the challenge; or of the fact that a succesful challenge could render the megaswap void.  Mr. Cafiero also expressed strong concerns that a new "bailout" by the Fund would, in the absence of capital controls, simply be used to finance capital flight - as in the past. Mr. Cafiero also pointed to the "unequal treatment of creditors" by noting that while domestic bondholders (including Mothers of the Disappeared) had had payment on their bonds suspended, $7.5 million had been paid to the Spanish government at the end of February; and payments were still being made to the IMF and World Bank.  In the same week, Spanish NGOs had raised $6 million for poverty programmes in Argentina.

 

Two interesting points emerged from the discussion. One member of staff, in arguing that the IMF should not be treated equally with other creditors and face losses under arbitration, asserted that "IMF policies benefit foreign creditors" - implying that this is why IMF policies are essential to attempts to attract new finance. Jubilee Research has argued for some time now that all  so-called "structural adjustment" policies are essentially designed to protect the value of the interests and assets of foreign creditors, investors and speculators.  It was helpful to have this analysis confirmed.  

 

Secondly, IMF representatives argued that the Fund is no longer opposed to capital controls. The problem, they suggested, is one of how to impose controls, especially in a country like Argentina, where state institutions are weak. The delegation reminded the Fund that this was largely the result of neo-liberal economic ideas which have elevated markets over the state. These ideas, have in turn, been transmitted into practical action by the IMF through "structural adjustment programmes".

 

 

Ann Pettifor