Flirting with Reconciliation: Argentina and the IMF

Argentina’s relationship with the International Monetary Fund is long and complicated. Since joining in 1956, Argentina has spent close to 40 years in IMF programs. Since 1984, it has received $56 billion in IMF loans, including $44 billion under its last president, Mauricio Macri.

But the IMF’s repeated attempts to rescue Argentina’s troubled economy – in 21 separate lending programs – have not won it many fans. In particular, many Argentines have bitter memories of the painful budget cuts imposed by the IMF in the lead-up to the 2001 crisis, which failed to prevent a disorderly default and economic collapse.

Under the Kirchners, the Fund was a populist punching bag. In 2005, after President Néstor Kirchner pre-paid Argentina’s IMF debt, he blamed it for Argentina’s “poverty” and “destitution,” proclaiming, “Goodbye and good riddance.” His decision won bipartisan praise.

The last IMF managing director, Christine Lagarde, sought to improve the Fund’s image in Argentina. But despite its latest bailout, the largest loan in IMF history, Argentines remained unimpressed. Our ArgentinaPulse survey in 2018 found 56 percent of Argentines disliked the IMF, the lowest ranking of any international organization included in the poll.

Today, however, mistrust of the IMF appears to be softening in Argentina.

The latest ArgentinaPulse survey, released this month, shows the IMF’s image has markedly improved. Forty-three percent of Argentines now have a favorable view of the Fund, up from 36 percent last October.

That improvement reflects the constructive relationship between the IMF’s new managing director, Kristalina Georgieva, and Peronist President Alberto Fernández and his finance minister, Martín Guzmán, who inherited a floundering IMF program and a $44 billion debt to the Fund.

The IMF pleased the new government by concluding that Argentina’s debt is “unsustainable,” and urging “substantial debt relief from Argentina’s private creditors.” In response, Mr. Fernández said he was “working very well with the Fund,” a notable change in tone for the president and his Peronist party. In our poll, 77 percent of Argentines said Argentina has a positive relationship with the IMF.

But the recent camaraderie has not erased skepticism of the IMF’s diagnoses of Argentina’s economic maladies, or its proposed treatments.

Our survey found a majority of Argentines say the country should not follow IMF policy guidance. That mistrust is particularly strong among Mr. Fernández’s supporters: 54 percent of those who approve of the president reject IMF advice, while 53 percent of his opponents favor IMF recommendations.