Vol 19 (2022) - Issue 3

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Argentina’s Latest Tango (or Tangle) with the IMF: The Deal That Almost Wasn’t – Part One

Synopsis
Argentina and the IMF recently reached final agreement on a new arrangement for Argentina that would enable Argentina to avoid falling into arrears on the IMF's 2018 loan to Argentina. However, this outcome was reached only after Argentina and the IMF engaged in a protracted and tortuous negotiation process that went on for eighteen months or longer and concluded only at the last minute before a late March 2022 deadline. This article discusses some of the twists and turns in that process and identifies various substantive policy differences between Argentina and the IMF as well as political considerations that contributed to the challenges encountered in the negotiation process. The article concludes with some general observations as to the broader significance of the new IMF program and, in particular, whether it signifies a new direction for future IMF programs for indebted sovereigns or whether it represents only a superficial attempt to address the deep-seated economic problems that have faced Argentina for many years.
The article is presented in two Parts: Part One provides an overview of how and why Argentina and the IMF found themselves locked in a negotiation to refinance the IMF's 2018 loan with a new IMF facility, and Part Two (to be published in the following issue of ICR) will cover how, despite a presumed shared interest between Argentina and the IMF in reaching a new deal, it was so difficult for the parties to successfully conclude their negotiations on a new IMF loan and program.