Once again the Fund was one of the protagonists of the week. The economic team continues the negotiations with the IMF technicians to obtain the disbursement advance for this year. Meanwhile, Vice President Cristina Fernández published a letter, where she confirmed (again) that she will not be a candidate in the next elections, and warned about the “loss of economic democracy” as a result of debt in general, and the IMF in particular. As is customary in the complaints of the vice president against the Fund omitted its responsibility as part of this Government that honors the debt.
I did not go
Last week the college of auditors of the General Audit of the Nation (AGN) approved by majority the study made on the loan that the Fund granted to Macri. As reported by the audit, “relevant regulatory breaches were highlighted, such as the lack of authorization of the indebtedness, the omission in the application of the specific processes for multilateral loans, the non-existence of the BCRA opinion on the impact of the operation on the balance of payments and the signing of the Agreement by officials without legal powers to do so”.
The AGN report also highlighted that for the loan “commissions and expenses were paid to the IMF for more than thirteen billion pesos equivalent, for example, to 52% of the Conicet budget in 2018.”
The resources received from the debt with the IMF were applied almost exclusively to the payment of debt services, and around 70% were used to cancel short-term debt services issued between 2016 and 2019. “These payments resulted in a mass of resources pouring into the market that coexisted with an uncontrolled capital outflow, a situation that should have been avoided under the IMF Constitutive Agreement,” the AGN said in the statement.
The vice president also published a video on her networks highlighting the AGN report as if the illegality of the agreement were a novelty. The national deputy for the PTS in the Front of Left Unity, Myriam Bregman He replied, “I would love to know why it took so many years to reach that result, which is notorious from a legal point of view, even beyond all political consideration.”
The truth is The government of the Frente de Todos, despite the allegations of irregularities in said loan, directed its years of management to renegotiate the illegal and illegitimate debt and signed a new agreement with the IMF. Kirchnerism did everything possible to offer “governance” to the Fund regime, thus allowing deputies who responded to them to be replaced from the Commission that voted on the opinion to be dealt with in Congress, by others who did support what was agreed with the Fund. Silence was called until the agreement was voted on.
Currently the Fund intervenes, “takes the helm of the Argentine economy, imposes its economic program and the uncontrolled inflationary process in Argentina is triggered again” (as the vice president says in her letter), but it must be said that the Kirchnerism is responsible. The government coalition does not propose to end this agreement either because “Sergio” is maintaining negotiations with the Fund and expects the miracle of the dollar advance.
The IMF breaks everything
Co-government with the Fund has consequences and falls on the popular majorities. A report prepared by Claudio Lozano and the team from the Institute of Thought and Public Policies (IPyPP) one year after the agreement with the IMF gives an account of the adjustment in retirement and pensions, Universal Child Allowance (AUH), economic subsidies. The document details that public spending fell 1.1% in real terms in 2022, “with a special reflection on retirement and pensions that lost 6.9% due to the application of the retirement mobility formula in a context of accelerated inflation. The extraordinary bonuses granted to lower-income beneficiaries were not enough to offset the fall in the item in the public sector budget”. “The AUH also lost 8.7% in real terms as a consequence of the application of the mobility formula in an inflationary context,” he adds. During the first four-month period of the year, the cuts in pensions, AUH, and food policies continued as detailed in a report by the Congressional Budget Office.
The first year of the agreement with the IMF came hand in hand with a jump in poverty. Lozano’s document states that “the latest available data showed that during 2022 more than 2 million people fell below the poverty line and 152,000 joined the group of indigents. Thus, poverty closed the year with an increase of 4.1 percentage points (from 36.5% to 40.6% in the 4th quarter)”.
The situation worsened this year. “Depending on the evolution of income in the first months of 2023, 41% poverty could constitute a floor that will tend to worsen in the face of the economic recession and inflationary acceleration induced by the agreement with the Fund and aggravated by the drought ”, warns the report.
Since the Fund returned to the country, there a transfer of income from work to capital of approximately US$ 87.8 billion at the official exchange rate (period 2018-2022), and in 2021 and 2022 the largest transfers of income were registered as published in a work by Flacso Eduardo Basualdo and Pablo Manzanelli.
In addition to the social consequences, the economy slows down due to the Fund’s recipes. The document indicates that “in a context of fiscal adjustment, increase in interest rates and greater restrictions on imports, the 4th quarter recorded a drop in GDP of 1.5% and a contraction was verified in all components of demand aggregate, with the exception of exports. Meanwhile, the loss of purchasing power affected private consumption, which fell 1.5%. Lozano argues that “the fragility of the economic context is characterized by the confluence of recession with an acceleration of inflation.”
We got here hand in hand with the IMF, and to pay an illegal debt. The bosses’ governments pay everything they can by appealing to the adjustment, and when that is no longer enough, the debt is restructured to continue paying. Thus, the debt is perpetuated over time. Why not end this looting? This is the debate that must be put at the center.
He sovereign disregard of debtas the Frente de Izquierda Unidad proposes, is an essential measure to end the decadence to which the capitalist class submits the popular majorities, together with other measures of national sovereignty and in defense of resources such as the nationalization of banks and foreign trade.