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End of a long stormy relation: IMF to close office in Buenos Aires

Monday, March 12th 2012 - 07:29 UTC
Full article 18 comments
Nestor Kirchner, a turning point in relations with the IMF	Nestor Kirchner, a turning point in relations with the IMF

In a surprise move the IMF has decided to close its office in Buenos Aires and Argentine issues will be managed and formally addressed from Peru, according to a report from La Nacion, quoting IMF sources.

This is the second time in recent years that such a drastic decision was taken. The previous was in 1994 with President Carlos Menem, but only lasted for six months, since quite soon Argentina was back again requesting financial support.

According to La Nacion IMF sources preferred not to talk about the tense relations between Argentina and the IMF, only arguing that the Fund’s strategy since the outbreak of the international crisis has been to concentrate human and financial resources to those areas where they have financial or technical assistance programs.

“The main focus now is in Europe and that is where some of the offices to close in South America will be located” said the sources.

The local IMF economist Mexican born Maria Gonzalez Miranda (who is also representative before Uruguay) will return to Washington and report to Nicolas Eyzaguirre who is responsible for Latam.

Argentina-IMF relations have been stormy, to say the least.

In November 2001, days ahead of the major default the IMF suspended all assistance to Argentina. And in 2005, then President Nestor Kirchner, having agreed with then IMF Managing Director Rodrigo Rato, repaid all pending loans and cancelled the whole debt. Kirchner presented the event as a corner stone for political independence and financial sovereignty.

A year later was the IMF last review of the Argentine economy in the framework of Article IV, which is done annually in all IMF member countries. In 2007 the Kirchner administration started to manipulate the inflation index and other stats, the exchange of information with the IMF ceased. The IMF then started to openly mistrust Argentina’s Indec indexes given the strong divergences between those figures and those elaborated by private consultants and at least ten provinces.

An Argentine judge then called on the IMF to clarify its statements, but alleging diplomatic immunity the Fund ignored the demand but was very disappointed with the whole incident.

The last chapter dates back to 2010, when other members of the IMF board asked for sanctions on Argentina for not publishing ‘transparent or adequate” stats based on international criteria. President Cristina Fernandez yielded and a technical cooperation agreement was signed between the IMF and Indec to improve stats, showing results in 180 days.

However the 180 days were up last January. And the IMF board questioned the poor results and made several recommendations, but with no sanctions, yet. But Argentina accepted a review of its financial system, which is one of several tasks of the IMF with all its member countries.

Summing up, Argentina is the only G20 member that does comply with IMF commitments; the Cristina Fernandez administration is very critical of the IMF austerity programs and claims greater emerging countries representation in the management of IMF.

Top Comments

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  • willi1

    The question is: For whom is it a shame? For Arg. or for the IMF?
    The arg. government is partly a criminal gang in financial belongings and the IMF a teethless tiger. Both are unnessecary in arg.

    Mar 12th, 2012 - 09:04 am 0
  • GreekYoghurt

    The question is: What is Nestor's lazy eye looking at?

    Mar 12th, 2012 - 10:19 am 0
  • GALlamosa

    #2 A small fortune in Calafate ?

    Mar 12th, 2012 - 11:30 am 0
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