Jubilee Plus Press Release

21st December, 2001 

Creditors should share in Argentina's losses, says Jubilee Plus

Today, Jubilee Plus suggested that an international insolvency process for Argentina economy could have helped to prevent her economic collapse. The organisation is calling on Argentina's foreign creditors to accept losses in the face of her economic crisis. 

"Since 1991, Argentina's economic policy makers have been in the grip of foreign creditors and investors, who have benefited from the policies of Mr Domingo Cavallo. These policies - endorsed by the IMF - have led to massive gains for international creditors, but economic chaos for the people of Argentina." Ann Pettifor, head of the Jubilee Plus programme said.

"It is now time for Argentina's creditors to stop collecting the premiums and start taking the losses. The international Jubilee 2000 movement has long called for an orderly, open and accountable process of sovereign insolvency. Only within a framework of independent arbitration between international creditors and the sovereign debtor could a crisis such as Argentina's be resolved in an orderly and accountable way."

24 million people have signed the Jubilee 2000 petition calling for a 'fair and transparent process' for introducing justice and democratic accountability into relations between international creditors and sovereign debtors.

According to Pettifor, "if such a framework had been in place, then this economic meltdown would have been managed in a less lethal way. It is now imperative for the G7 to amend the international financial architecture to introduce justice and discipline into relations between creditors and debtors, and to prevent foreign creditors from transferring the burden of speculation and risk onto the backs of the poor."

• Argentina's sovereign debt is currently at $132bn, according to Credit Ratings Agency Standard and Poor's. Between September 2001 and 2003, $75.3bn will be due in foreign debt servicing, representing 27% of her GDP and 322% of her annual export earnings.
• On 26th November 2001, Anne Krueger, First Deputy Managing Director of the International Monetary Fund, echoed Jubilee Plus in calling for an "fairer and more efficient process of sovereign debt restructuring". Krueger argued that an international insolvency process would provide a more equal sharing of the burden of financial crises between debtors and creditors.
• Support for an international insolvency process was also apparent at the recent meeting of the International Monetary and Financial Committee (IMFC) in Ottawa

Notes for Editors

1. For more information, see 'It Takes Two to Tango - Creditor co-responsibility for Argentina's crisis - and the need for independent resolution' Jubilee Plus, September 2001

2. The full text Anne Krueger's speech is available on the IMF website at http://www.imf.org/external/np/speeches/2001/112601.htm 

Contact: Ann Pettifor Tel: 07770 886146
Apettifor.jubilee@neweconomics.org 

Romilly Greenhill Tel 07812 605131
Rgreenhill.jubilee@neweconomics.org