Argentina Pays Up, Gets More IMF Cash
Argentina was cleared to receive $3.1 billion from the International Monetary Fund (IMF) after meeting a March 9 repayment deadline for $3.15 billion. The IMF money is part of a $13.3 billion rescue package. President Nestor Kirchner had warned that without the cash Argentina would default on repayments.
To get the money Argentina agreed to negotiate differently with foreign investors. Some creditors have not received payments from Argentina in more than two years.
Argentina recently angered private investors by saying it would pay only 25 percent of the face value of government bonds. The government argues that bondholders are also responsible for the debt crisis, because they profited from exorbitant interest rates under former president Carlos Menem (1989-1999).
The IMF itself admits it did not properly deal with Argentina’s 2001 economic crisis. In a discussion paper the IMF said it missed danger signs, overestimated economic growth, and misjudged its reforms’ effects.
Institutions such as the International Confederation of Free Trade Unions are urging the IMF to help Argentina’s government make repayment agreements that will not unbalance the country’s economic recovery.
Argentina’s economy, which is overcoming a record debt default, has showed its first strong signs of improvement with 8.4 percent growth in 2003.