For this reason, an alternative to quarterly inspections is being discussed, which, once again, will require the political intervention of the agency’s board. The Fund requires, as in any agreement of the Extended Facilities type, inspections of compliance with quarterly goals; according to the dictation of article IV of the statute of the body headed by Kristalina Georgieva. In local political terms, if the agreement with the IMF is signed, the government of Alberto Fernández, and those that succeed it, should accept missions from the agency’s private envoys who are responsible for handling the Argentine case every three months. In each mission, Washington’s envoys should monitor whether the country met the fiscal, monetary, financial and foreign exchange goals; and, if they do not, send this data to the headquarters so that the steps to follow can be defined there. At that point there could simply be a corrective, a policy change recommendation, or a larger challenge. And if the country persists in its non-compliance, a waiver or various intermediate points should be negotiated from Washington until the agreement falls. To get to this point, according to the statute, the breach would have to materialize in two consecutive quarters, and there is always the possibility of future corrections. In general, these are not such serious issues, unless the deviations are wide and deep and, in the eyes of the Fund, unjustifiable under the economic circumstances.
Each quarterly mission that visits Buenos Aires should meet with the main economic officials of the country; those who should display the local numbers and carefully explain to Washington’s envoys how the Argentine economy is doing. And, the IMF envoys have the power to consult and cross-examine; and eventually to question and discuss the data shown to you. And back in Washington, they can criticize and even recommend policy changes. In other words, the IMF representatives who have the authorized signature in the Fund’s missions will be able to examine local officials. Something that would obviously be very difficult to accept from the most radical political wing of the Government. In fact, remember within Kirchnerism, this type of mission was what determined that the standby signed in 2003 ended up being canceled and liquidated in February 2005. The decision was made by Néstor Kirchner after complaints from several of his officials for the annoying data that visitors to Washington sometimes asked for.
The intention of the local negotiators is that the requirement of the quarterly missions be modified, and that they be extended on a semi-annual basis. Or annual. And that the visits are simply diplomatic and corrective. The argument is that since it is an unprecedented Extended Facilities, the audits should also be unprecedented and with a longer period of time.
Source: Ambito
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