The International Monetary Fund is stirring up and giving again, they assure in Economy. After the organization repeatedly stated that the main guidelines of the agreement initiated by Martín Guzmán and continued by Sergio Massa would not move, little by little goals were cracking. The program will now be recalibrated point by point, to be reviewed in light of the drought which, they say, has changed everything. Is the IMF decision surprising? It could be seen coming, because the program was on the brink and the government asked for help.
The bottom he had no choice but to accept the Argentine reality, dramatic, changeable, volatile and much more in an election year. And with him club addition of a very severe drought. For the organization, and also for the United States, it is better to have with Argentina a patched programwhich scores at least some control guidelines, to get around this difficult stretch that is getting to the next government without a bang. The White House approves this decision.
THE memories of what happened with the disaster after the last STEP and the departure of Mauricio Macri are latent in the corridors of the Fund and in the US government. The 2018 deal remained paralyzed in nebula for nearly two years: the IMF had to wait for Alberto Fernández’s government to first negotiate with private creditors and then focus on debt to the agency. They don’t want a scenario like this to happen again and they decided to open the umbrella now sooner rather than later.
Decision-making processes are slow in Washington and the dates are coming up. For this reason, the economic team remains in this city and is betting on the resolution of new guidelines – which can include changes in objectives, deferred payments or advances in disbursements and other tools – in a few weeks. Massa could return to Washington in 15 days. Times press.
Massa had achieved the original goals last year, obviously with some accounting maneuvers and “creative” shows. like the soybean dollar that’s not in the Fund’s handbooks, but that the tolerated organism. The latest personnel report was much more difficult than before. Policy implementation has become “less reliable,” they said, calling for the 1.9% of GDP target to be maintained.
But the drought beyond the fact that the Government uses it as an excuse for everythingis a serious reality that has added an extra ballast to a very small and agro-dependent economy like Argentina. The Fund realized this in its fourth review and eased its international reserve target by $3.6 billion this quarter and $1.8 billion at the end of the year.
But it wasn’t enough even with that and Massa’s tricks were no longer enough. Nor the bustle in front of the organisms. The minister defines himself “a BEGGER”: “Everyone I see I ask for money”, He says. And in Washington you “scraped the plate” with loans from the BID, the World Bank, Saudi sovereign wealth funds. But, for example, $200 million of IDB can evaporate from the plant in a single day.
Somehow, the IMF agreed to facilitate the famous “bridge” that President Alberto Fernández asked Joe Biden in the White House to overcome the impact of the drought. It is not clear where this bridge of aid leads at the electoral level, but in Washington they don’t want Argentina to explode.
It’s not for charity, but the United States has its own interests. They appreciate the reserves of lithium, gas and foodall strategic resources at critical moments e they fear the Chinese advance. The government of Biden now distrusts Lula, to which they had staked some chips in the region, for his positions on Ukraine and China. Lula’s statements about the Fund “choking” Argentina did not go through. Before announcing the recalibration with Gopinath, Massa met with Biden’s top business and political officials.
But where does the “bridge” that the Government wants to cross with the help of the Fund and the USA lead? Obviously, the agency would like to speak with in the future a less fragmented government compared to the current one and closer to the market. What if they have to negotiate with Javier Milei? Little fond of words, the gaze of the officials freezes. It is clear that the Fund’s prospects would be complicated by a president who wants to close the Central Bank and dollarise the economy.
In the reformulation of the program there will be concessions, but the limits will not be pushed too far. While they may alleviate some objectives or tools, the Fund it will continue to ask for an adjustment based on the elimination of subsidies to energy, a cut plans social and in pension moratorium, where they are seeking the membership of half of the 800,000 announced stakeholders so that it does not have the same impact on the deficit.
How much will the Fund make? Massa will try to pull the rope as much as possible, but the body itself has its hawks who distrust Argentina. Which will be defined in these weeks. The adjustment will continue, but at a pace slower these delicate months.
Washington (correspondent)
Source: Clarin
