2023-08-09 03:30:00
The agreement has been destabilizing for the Argentine economy and the IMF itself recognized that it did not meet its objectives.
The necolonial position that we face with the IMF and the public indebtedness that we suffer are not unrelated to the serious macroeconomic imbalance that we face. Once once more: from the beginning of 2016 to the middle of 2019, a public debt scheme was set up in Argentina whose sole objective was to provide the country with dollars to be able to withdraw them with profits in pesos obtained with high interest rates that the State paid for the debt in pesos that it issued. In addition, those dollars were obtained from profits in pesos that large companies accumulate in quantity, which has to transform those pesos into dollars to close the circle of business profitability. When the foreign investment funds that came to speculate with this mechanism set up by the State began to take the dollars because the country “was melting” then the Government called the IMF.
His rescue -our loan- was for those investors who were leaving (several of them might not leave and for this reason we also had to renegotiate with foreign investment funds). The fund arrived -as it happens in other latitudes- to save the foreign funds that, frightened, withdrew exchanging pesos for dollars and also large companies that operate in the country took their profits. All this indebtedness process violated internal laws of public order and the IMF’s own regulations since it was lent to a country to facilitate the flight of the lent dollars.
The same thing happened in 2000 and 2001 with the IMF, the same process that we detailed. And the devastating effects on Argentina are the same, destroying the national economy and with it the income of the vast majority of the population. The national government faced a devastating legacy, the pandemic arrived and issued trillions of pesos – in addition to borrowing a couple of trillion more – to sustain the state and social scaffolding.
But not only did it misuse the surplus in export dollars of the years 2020/2021 by enabling unnecessary imports and selling cheap dollars (official dollar) to indebted companies in dollars in the previous government, Rather, they agreed on a form of payment with the IMF that was absolutely impossible to comply with (which we warned on 2/5/2022 from this page “ Together for Payment “). This agreement has been destabilizing for the Argentine economy and the IMF itself, in a report dated 12/23/21, recognized that the credit granted to Argentina did not meet the objectives set.
We do not agree: he fulfilled it; The dollars were taken away and Argentina was conditioned to the quarterly control of the macroeconomic policies imposed by the agency: devalue (inflation) adjust (to have surpluses and for the State to buy dollars to pay). privatize and reform pension and labor laws. These are issues of the agenda of a State and not external impositions regarding a country that may one day be sovereign.
However, in desperation to pay (since it seems a bad word to legally investigate the illegal granting of credit with the IMF, both by those who took it and those who granted it) has made the current government look for alternative financing paths (cheaper that the IMF that also applies fines to us for being over indebted with it, precisely with their approval). Thus, we pay part of the maturities with Chinese yuan using the swap contract (central banks of both countries exchange loans in pesos and yuan), we received a short-term loan from the Andean Development Corporation and from Qatar (DEG) at an interest rate lower than that of the IMF. It was also resolved to pay for Chinese imports with yuan (China’s currency) which is a sovereign decision of all logic: Why pay with dollars that we don’t have using a currency other than that of the country that sells us?
The struggle to pay the debt with private companies and the IMF also imposes supporting the periodic “flashes” of the blue dollar through which a small group of “financial caves” assisted by banks and money tables push up a value that is transferred to the price immediately. Of course, it is in an economy where the profitability of monopolies and oligopolies (which dominate almost the entire national economy) is measured in dollars (eg: a ton of iron always has to leave me so many dollars, the profit being constant). the bidding for income sharing is generally won by the most powerful owners of capital, with SMEs and wage earners getting a smaller and smaller share, because capital does not stop concentrating.
Faced with such a picture, those who would be the economic referents of an opposition candidate put pressure on the IMF to obstruct all collaboration with the country, pushing us towards another currency run, which has clearly been done in recent days. Either we are sovereign and integrate with our continent with export policies, technological development and income distribution, or poverty will deepen. I do not doubt it.
* Lawyer. Professor of the Faculty of Economics of the Unco.
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