(Special Envoy to Bali, Indonesia) Alberto Fernandez met with the managing director of the International Monetary Fund (IMF), Kristalina Georgieva. After the bilateral meeting, the IMF representative highlighted the economic policy implemented by the government in recent months. “It is very important that Argentina maintains this successful course”, he emphasized at the end of the meeting.
During the meeting, which took place in the Tampaksiring room on the ground floor of the Meliá hotel, the President proposed a review of the goals agreed with the credit agency for the third and fourth quarters of the year. In addition, he insisted on the reduction of the surcharges charged by the agency and requested that the costs of the War in Ukraine be compensated.
“I was very happy to see that President Fernández is fine. we kept a very good and constructive conversation about the impact of the war in Ukraine, the global economy and also about the situation in Argentina”, said Georgieva upon leaving the meeting.
In this regard, the managing director of the IMF stressed “the importance of that Argentina continue with the objective of lowering inflation, improving the performance of the economy and to do it in a way that takes into account the needs of the population, especially the most vulnerable segments”.
“It is very important that Argentina stay the course as they have done so successfully in recent months. We have successfully concluded the second review, in a short period, due to the discipline that Minister Massa and his team have shown. And we agree that in this very difficult global environment it is important to continue with this discipline”, he concluded.
For his part, the Argentine president stressed that the G20 was able to review the surcharges that the most indebted countries are paying. “She (Georgieva) told us that she is willing to take the issue to the IMF board. We also talk about a second problem that we call “the price of war”, which has already cost Argentina up to 5,000 million dollars; who is going to take care of this? Kristalina shares our perspective on the harmful effects of the war on the economy,” Fernández told this outlet.
The President recalled that the Government is making an enormous effort in a scenario of growth, increased production, record exports, although he admitted that they still have to solve the problem of inflation and income distribution. “Equally, the economy has not been paralyzed, it continues to grow. We have to keep creating jobs, get investment and make the economy grow more”, he emphasized.
In addition, Fernández highlighted that the managing director of the IMF appreciated everything we are doing in terms of peace with the issue of Russia and Ukraine. “I think it is very important that all Argentines understand that we have to work for peace. After such a painful pandemic, it makes no sense to think that people are killing themselves in the world. You have to understand that this is generating complex problems not only in Argentina, but in the world, ”she concluded.
The meeting also participated Gita GopinathIMF Economic Advisor; Krishna Srinivasandirector of the Asia and the Pacific department; Christian Mumssen, CFO; Y Kristina Kostia, deputy managing director of the agency. Along with Fernández were the chancellor santiago cafierothe Minister of Economy Sergio Massa and the ambassador to the United States, Jorge Arguello.
It may interest you: The health of Alberto Fernández: sixty minutes of anxiety in Bali that shocked the official entourage
Yesterday morning, after being received by the President of Indonesia, Joko Widodoand while he began to suffer the first discomforts of his health picture, Alberto Fernández had a fleeting meeting with the managing director of the IMF in which he told her that today they would deal with “the issue of flight attendants.”
Indeed, the President left for Indonesia with his mind set on asking Georgieva that the International Monetary Fund reduce the levels of surcharges and establish a new issuance of Special Drawing Rights (SDRs) to alleviate the economic and social effects of the war in Ukraine.
The IMF applies a surcharge – plus interest – to countries that receive credits above the amount they should receive in relation to the value of the quota they contribute to the multilateral credit organization. Argentina, due to the quota it pays to the Fund, received an excess credit (44,000 million dollars). And this excess implies an annual surcharge -approximately- of 1,300 million dollars.
The impact of the COVID-19 pandemic wreaked havoc on the economies of poor and middle-income countries, and the IMF board decided to approve an extra issue of Special Drawing Rights for 650,000 million dollars. Argentina, towards the end of August 2021, received 4,300 million dollars that swelled the items of the Central Bank.
“In the last telephone conversation I had with Kristalina Georgieva I asked her these two things”, said the Head of State days ago during a talk with Argentine journalists in Paris. Today he returns to put the claims on the mass in the meeting that began minutes after 5:00 p.m. in Bali (6:00 a.m. in Argentina).
“First of all, I pointed out to Kristalina Georgieva how the effects of the war were hurting the whole world, not just Europe, not just Russia and Ukraine, but to Argentina, specifically, the war cost 5,000 million dollars. 5,000 million dollars that we had to pay more as a result of the cost of energy, as a result of the cost of fertilizers, as a result of the cost of food. Y I once again raised the need for them to once and for all check the surcharges that in our opinion they are very unfair mechanisms that affect the countries most punished by debts and that in a case like Argentina it is also the consequence of an absolutely irresponsible indebtedness that was taken”, explained Alberto Fernández in statements to the press.
Despite the President’s insistence, the IMF director is not expected to grant any of the claims. On the one hand, the surcharges are used to pay the bureaucracy of the Monetary Fund, and the extra issuance of SDRs due to the war in Ukraine is a working hypothesis that is resisted by the staff of the organization, because they consider that it can multiply inflation at world level.
Meanwhile, a team from the multilateral credit organization is in Argentina seeking to close -together with officials from the Ministry of Economy- the review of the third quarter to send USD 5.9 billion to the country before the end of the year.
Keep reading: