He Former Minister of Economy, Martin Guzmanmet with directors of the International Monetary Fund (IMF) and the World Bank to discuss the problems facing Argentina as a result of debt sustainability analyses, and published a document on the issue together with the Nobel Prize winner Joseph Stiglitz.
“I met with IMF and World Bank directors to discuss problems in the organization’s debt sustainability analyses, tool that in 2018 allowed Argentina to be granted the largest loan in historyand that it was used for purposes that violate the rules of the Fund itself,” the former official said through his official account on the X platform (formerly Twitter).
He added: “Today we meet to discuss a key issue for the economic stability of the world and the stability of countries that have debt problems: the practice of debt sustainability analysis“.
The IMF and destabilizing loans: Guzmán’s analysis
In his analysis, Guzmán emphasizes the practice of debt sustainability analysis And he asks: “Why is this so important? Because when the IMF lends, it can happen that it lends for reasons that are always bad. That ends up destabilizing societies.”
“When countries lend, they are supposed to be able to pay back that debt. What is common, or something that is happening, is that sometimes loans are made that should not be made and debts are not restructured that they should not be restructured, and that the money from IMF loans should not be used for what it should not be used for,” he said.
The economist emphasized the analysis carried out at the time when Mauricio Macri’s government reached an agreement with the International Monetary Fund (IMF): “This was a huge problem in the loan that the IMF gave to Argentina in 2018“The way in which this debt sustainability analysis was carried out allowed money to be lent which was then used to finance the exit of speculative capital from Argentina and to pay off debts that should have been restructured.”
The economist also criticized in his analysis the possible new loans that the administration of President Javier Milei may request. “This continues to be important for Argentina because Milei’s government has already announced that it is asking the IMF for more money“. Misused money means fewer opportunities for Argentines,” he concluded.
Former IMF member casts doubt on the arrival of new funds to Argentina if there are no adjustments to the Caputo plan
He International Monetary Fund (IMF) He agrees with some aspects of President Javier Milei’s plan, such as the reduction of the fiscal deficit, deregulation and spending cuts, but sees that the triad of exchange rate, restrictions and the accumulation of reserves by the Central Bank (BCRA) must be adjusted. He considered that it is key that, if progress is not made in this regard, it will be difficult to reach an agreement with the organization that involves the disbursement of dollars.
This is what he pointed out Alejandro Werner, former director of the Western Hemisphere Department of the The Argentine Institute of Finance Executives (AEF) said that it hopes that the Minister of Economy, Luis Caputo, will correct some aspects of the current path and opened the possibility that an agreement that brings fresh funds from the Fund to Argentina will not be reached.
Source: Ambito
