Bearing in mind that the NIRs have not only not been growing, but that there has been a drop of almost US$1,000 million, the chances of achieving what was promised are practically nil. However, there are technical and strategic arguments that Argentine officials negotiating with the IMF can adduce. In the first place, the increase in Central Bank dollars in the first quarter is an objective, not a goal. And as such, it can be fulfilled. If Argentina committed to achieving the final goal of a positive result of 9,800 million at the end of the year, the IMF could give the go-ahead. Even without resorting to any waiver alternative. Argentina can argue that foreign exchange earnings have been weakened by the drought that is affecting the country, something that obviously cannot be anticipated in any debt renegotiation or target setting.
For this to be possible, there is an essential condition: that the US supports Argentina’s request on the IMF board. And this is why Massa’s meeting yesterday with Shambaugh is important. As officially announced, both spoke of “the advances in the economic program and in the review of the agreement with the IMF. Likewise, the minister and the representative of the US Treasury discussed the impact of the war and the drought in Argentina”. In the meeting, which lasted for an hour, Massa was accompanied by the head of INDEC and Secretary of Institutional Relations, Marco Lavagna. Meanwhile, representing the Department of the Treasury, Counselor Andy Baukol; the director of International Monetary Policy, Shannon Ding; and senior adviser to the undersecretary, Jacob Kloper-Owens.
The United States holds the majority on the IMF board as it is the entity’s main shareholder. In addition, it exercises a leadership role over almost all the Western votes. More if it is the case of a Latin American country. The United States holds 16.74% of the shares, since each sovereign state has a percentage of votes depending on its GDP; reserves and direct contributions to the functioning of the organization based in Washington.
Source: Ambito
