|International Monetary Fund (IMF) and Argentina
A Current Problem
Guyana Journal, March 2013
The problem currently between IMF and the Government of Argentina (GOA) consists of the rights and obligations regarding information exchange on the economy of Argentina. Each year member countries are obligated to submit to the IMF accurate information regarding their economy. The IMF contends that the GOA has not complied.
The IMF alleges that the GOA specifically has not provided credible statistical information regarding inflation rates. The National Institute of Statistics and Census (INDEC) is the Argentine's agency responsible for collating such information.
Additionally, GOA has refused to submit to the IMF's annual mandatory review of its economy. This practice is common among all member countries of the IMF as stipulated in Article IV of the Original Charter. As a consequence, the IMF applied a motion of censure on Argentina. Due to the sanction, Argentina presently is ineligible to access the general resources of finance from the Fund. This is the beginning of a process that could lead to the expulsion of the country. The GOA finds itself in a challenging position as a member of the G-20 since that body is committed to transparency in providing accurate information regarding their respective economies.
The last time the IMF expelled a member state was in 1954. The former Czechoslovakia was a country in the orbit of the USSR that refused to provide the economic information that the IMF requested. The IMF action was influenced by the US which was the main shareholder and contributor to the finances of that the international institution. The IMF has given the GOA until September 2013 to change their methods of data collection and compilation of economic statistics. Even though the Fund sanctioned Argentina, it has indicated its willingness to strengthen its relationship with the GOA.
In the 1990's Argentina was showcased by the IMF as a good example for implementing successful economic and financial policies. However, in 2001 Argentina entered into a financial crisis and the relationship with the Fund deteriorated. The latter blames the IMF for the current crisis.
Hopefully, the GOA and the IMF will resolve the information exchange discrepancies before September in order to prevent the drastic act of expulsion because the International Monetary Fund (IMF) has a lot of influence all around the world.
*Student of Economics in the Universidad del Centro de Estudios Macroeconomicos de Argentina-CEMA (University of Cema), Buenos Aires, Argentina & Research Assistant with Paul N. Tennassee, Director of International Affairs of NAPFE, Washington, DC, USA/March 2013