Argentina on Tuesday took a step towards resuming
normal relationships with the IMF at the start of
the annual meetings in Istanbul.
Argentine officials have already held a series of talks with
their IMF counterparts in the Turkish capital in an effort to
normalize relations. These have been severed for three years
after Argentina paid back its debt to the IMF and subsequently
refused to be submitted to its annual Article IV review.
Argentinas finance minister Amado Boudou is now
expected to meet with the IMFs managing director
Dominique Strauss-Kahn, after acknowledging for the first time
that the Fund had changed, when he spoke about the new
Martin Redrado, Argentinas central bank governor, spoke
with Strauss-Kahn Tuesday and received a commitment that
the Article 4 consultation will have to proceed on strictly
technical terms without any kind of political analysis,
according to a spokesman from an Argentinean spokesman.
Officials from Argentina have usually been prone on
denouncing the Funds intrusive methods in domestic
affairs. They have a different vision than ours, and this
is why they have just had to deal with the worst crisis since
1930, Boudou earlier told Argentinean journalists.
On the other hand, IMF technicians say they lack the basic
elements to gauge the impact of the global crisis on the
Argentinean economy, as local statistics are still not
A basic agreement on bilateral procedure would be the
prelude to normalizing relations with the Fund, which has been
one the declared goals of the government of Christina Fernandez
de Kirchner, following a bruising electoral defeat last June
and deteriorating financial conditions.
This would pave the way for a $6.7 billion debt settlement
with the Paris Club, which is already pending.
A technical mission will have to be allowed to go to
Argentina before a resumption of normal relations by the end of
the year can be envisaged. An Argentinean central bank
spokesman said the talks had been very
Strauss-Kahn expressed his commitment that the review
will not get politicized and will be strictly technical and
focused on assessing the macroeconomic situation of the
country, the spokesman said.
Nicolas Eyzaguirre, the Funds western hemisphere
director, who met with Boudou on Tuesday, had previously made
its position clear: It is about policies, not
politics...We do not want to be intrusive nor interfere. But we
have to be transparent.
In addition, Redrado has defended a system of
collective insurance for countries that face
reserve shortages. Those countries would have to pay a fee for
this insurance, but if needed, the availability should be
immediate and without conditions, according to the
central bank spokesman.
However, Strauss-Kahn has said that there was no consensus
among important countries to put this into practice, according
to Argentinean sources.
Redrado addresses the severity of recurrent economic crises in
Argentina and ensuing volatility in an article in Emerging
Markets. Although Latin American countries have
experienced lower economic growth rates and higher
macroeconomic volatility than other regions, the problem of our
country is on a different scale, he writes.
Over the past 30 years, the average growth in Latin
America was less than half of Asias, with volatility at
nearly twice Asian levels. In that period, Argentinas
growth was three times lower than that of emerging Asia, and
volatility eight times greater.