Home Argentina economy “On the way to disaster”: Argentinians protest against IMF debt deal | News

“On the way to disaster”: Argentinians protest against IMF debt deal | News


Buenos Aires, Argentina – Thousands of people gathered in Argentina’s capital, Buenos Aires, urging their government not to sign any debt restructuring deal with the International Monetary Fund (IMF).

Protesters flocked to Plaza de Mayo in Buenos Aires on Saturday, carrying signs reading “No to an IMF deal” as colorful banners of the country’s largest social and left-wing organizations rippled in the beating sun and the anti-IMF slogans roared over the loudspeakers.

“People may not know a lot of things, but they are aware that the words ‘International Monetary Fund’ in this country … have always brought us more misery and more dependence,” said Carlos Aznarez d’Organizaciones Libres del Pueblo, one of the groups that organized the rally.

“People understand that we are heading for disaster if we sign this agreement,” he said.

The Argentine government is negotiating with the IMF to restructure the $ 44 billion it owes the global fund.

The loan dates back to 2018, when then-president Mauricio Macri signed a $ 57 billion deal with the international lender of last resort, making it the largest loan in IMF history. Some $ 44 billion was dispersed, but President Alberto Fernandez, who took office in 2020, refused the rest and decided to renegotiate the loan repayment terms.

The current deal calls for repayments of $ 19 billion each in 2022 and 2023 – amounts many say the government cannot afford to repay amid a grieving recession that has seen inflation soar and poverty continues to rise.

Social organizations on the streets said on Saturday that paying down the debt would inevitably lead to austerity measures that would hurt ordinary Argentines.

They fear an increase in the cost of public services, an increase in interest rates, a reduction in public works, cuts in government employees, pensions and social spending. These are steps Argentines have seen before, some as recently as 2018, when the government imposed an IMF-backed plan to cut government spending to pay down debt.

But it is the role played by the IMF before and during the financial crisis of 2001 that continues to infuriate many Argentines. At the time, the government devalued its currency and banned bank withdrawals after defaulting on its $ 93 billion debt, sparking widespread social unrest as unemployment and poverty skyrocketed.

A woman holds a sign that reads: “Better to live on your feet than to die on your knees on a march in Buenos Aires, Argentina [Natalie Alcoba/ Al Jazeera]
Members of social organizations in Argentina gathered around a burning cardboard interpretation of the American flag during an anti-IMF march in Buenos Aires, Argentina [Natalie Alcoba/ Al Jazeera]

Fernandez, who lost political support in last month’s midterm legislative elections, spoke harshly, promising Argentina “will not kneel” in front of the IMF, while promising to repay what it does. must.

A faction in his party, led by powerful Vice President Cristina Fernandez de Kirchner, has opposed any cuts in public spending.

“You know, Alberto, that we are talking about external restrictions and that Argentina is running out of dollars,” Fernandez de Kircher said on Friday, addressing the president at an event celebrating Democracy Day, which marked 38 years since the end of the last military dictatorship. in Argentina.

“But there is no shortage of dollars; they were taken abroad to tax havens, by the billions. Make a commitment that every dollar they took without paying tax goes back to them. Make it a point of negotiation.

The president responded by telling Fernandez de Kirchner to “stay calm, we are not going to sign anything that would endanger the growth of Argentina”.

On the same day, the IMF issued a statement to mark the end of the latest round of talks in Washington, noting that while technical work has advanced, “more talks are needed.”

“The teams agreed that broad support – both nationally in Argentina and within the international community – would also be essential to the overall success of the economic program,” the statement said.

But that will be difficult to achieve in Argentina, which has repeatedly defaulted on its external debt and had to turn to the IMF for financial assistance.

“There is an overwhelming distrust by much of society in the IMF because there is not a collective feeling that the IMF has actually helped Argentina,” Martin told Al Jazeera. Kalos, an Argentinian economist.

“The influence of the IMF on policies in Argentina has been very clear on several occasions,” he said.

“Explicit programs designed and approved by the IMF to finance times of crisis, as happened in 2001, to the IMF and government officials stressing that Argentina was the IMF’s best student.”

He said these policies “have not ended up alleviating times of crisis and in some cases have helped put us in crisis.”

However, failure to reach an agreement with the IMF “would maintain a scenario of uncertainty” over the availability of the financing Argentina now needs to be able to emerge from the financial crisis, said Kalos, director of the consultancy firm. EP. y CA Consultores.

The problem, he added, is that the IMF is neither designed nor interested in addressing the root causes of Argentina’s endless financial woes. Because the problem is not financing, but a structural problem in an economy that does not have enough high productivity sectors, he said.

“Argentina needs to generate and promote new productive niches to generate another dynamic. So that they can trigger growth, ”Kalos said.

Organizations demonstrating in Buenos Aires on Saturday say it is up to the people to decide whether the government should reimburse the IMF.

They say the question should be put to the public in a referendum.

“The government needs to put debt repayment on hold so that it can reallocate that money to help those who need it most, who are the ones who can’t make it at the end of the month, who have to go to a community soup kitchen. to be able to feed their families, ”said Ana Barreto, leader of the social organization Libres del Sur.

Prices have increased 52 percent in the past 12 months, according to government statistics, and more than 40 percent of the population lives below the poverty line.

“The barrios have no food. Literally, ”added Aznarez of the Organizaciones Libres del Pueblo.

“We try to deliver milk to the barrios who don’t have it, even though the government says they are sending it, but we can’t do that forever. “

He noted that Saturday’s protest was smaller than it would have been because trains from the south of the capital, where activism is strongest, were not running due to track repairs. – something he alleged was deliberate on the part of the government. “It’s going to be a very difficult year. We’re going to be on the streets all the time, ”he said.

On the outskirts of the walk, Paula Avales was sitting on the sidewalk waiting for her sister. She did not come to the demonstration, but saw the economic crisis in her hometown of Pilar, in the province of Buenos Aires.

“Our money only covers food,” said Avales, 38. “Nothing else. Just [enough] to survive.”

Her husband is a civil servant who luckily was able to keep his job throughout the pandemic.

But Avales had no luck finding a job. Beyond social assistance which could be compromised by an agreement with the IMF, according to her, what is most crucial is job creation.

“Work. I want to work. I’m still looking for work and I can’t find any.