MercoPress. South Atlantic News Agency

Former IMF head admits to made many silly mistakes and errors with Argentina

Michel Camdessus was IMF Managing Director from 1987 to 2000

Former managing director of the IMF, Michel Camdessus admitted Thursday in Buenos Aires that during his time working for the organization, they 'made many mistakes with Argentina,' particularly highlighting the 90s.

“We probably made many silly mistakes and committed errors with Argentina, but finally the debt problem has been resolved, even though it took a long time” sustained the French economist, who headed the International Monetary Fund between 1987 and 2000.

Camdessus made the statements during a speech at the 14th Annual Meeting of the Christian Association for Company Directors (ACDE) which took place in a Buenos Aires downtown hotel. Camsessus also participated in a panel on “Argentina: challenges for a sustained progress”.

The Camdessus IMF period was marked by the so called ‘Washington Consensus’ and the Argentina of former president Carlos Menem was repeatedly praised for its privatization and open market policies plus the stabilization plan based on a fixed exchange rate of 1 dollar/1 Argentine Peso stabilization program.

However this chapter rapidly led to one of Argentina’s worst economic, political and social crisis with the collapse of the elected government, the melting of the economy forcing a major default in 2001 of over 100 billion US dollars.

The restructuring of Argentina’s defaulted sovereign bonds was done in two chapters, 2005 and 2010, while in 2006 then President Nestor Kirchner repaid all pending debt with the IMF and virtually cancelled all links.

With regard to the topic, the former IMF managing director estimated that “80% of the global economic growth,” over the course of the next forty years, “will come from the development of emerging countries, like Argentina,” also considering that during this time the dollar will cease to dominate the monetary system and global finance.

“We can expect that by 2050; close to 80% of global economic growth will be a result of emerging countries. Today, many of these countries are reducing the gap with more developed nations, developing their middle class and bettering their quality of life”.

Camdessus acknowledged that “current neo-liberalism is extremely short regarding institutions and regulations”. However the former IMF head also underlined that a “State must establish clear continuity and predictable rules plus transparency and efficiency from the regulating offices”.