LETTERS TO THE EDITOR: Finding a fairer way to resolve debt crises
By Ann Pettifor
Financial Times; Jan 30, 2004

From Ms Ann Pettifor.

Sir, Martin Wolf ("The IMF should stand firm against Argentine blackmail", January 28) argues cogently that the International Monetary Fund acquiesces in Argentina's unequal treatment of commercial creditors.

Commercial creditors have only themselves to blame. When the IMF, supported by many civil society organisations, argued for a new and more just framework for treating the debts of insolvent sovereigns, the proposal was torpedoed by Wall Street's commercial creditors.

This opposition to a formal, fair and more orderly process for restructuring debts arises, we believe, from an attachment to taxpayer-financed bail-outs.

For reasons that are unclear, central banks and Treasuries of the Organisation for Economic Co-operation and Development, led by the US, have chosen not to bail out Argentina's commercial creditors. Is this not an opportune moment, therefore, to revive proposals for a more just framework for the resolution of sovereign debt crises, one that would distribute losses more fairly between all creditors, public and private?

Ann Pettifor, Director, New Economics Foundation, London SE11 5NH