Nicolás Dujovne on the IMF and Argentina, redux. Almost Marx comments

In order to apply an inadequate whitewashing of Macri’s failed bid to re-enter the Neo-Liberal World Order Mr. Dujovne offers this:

Mr Dujovne nevertheless pointed to innovative clauses in the deal proposed by Argentina that will allow the government to increase spending on social programmes and relax the deficit targets if necessary, which the fund “welcomed warmly”. “It will probably apply this in other countries,” he added.

Such socially sensitive terms contrast with past IMF programmes, not least the fund’s last standby arrangement with Argentina that ended with the 2001-02 financial crisis that had grievous social consequences and tarnished the multilateral lender’s reputation in the country and beyond.

The Financial Times hireling dutifully reports on, presents, this  as what, via Mr. Dujovne ‘s pronouncement ? An admission that the Austerity Lite has not worked, but that somehow this newest IMF sanctioned and  ‘tweak-able’ interventions will work ? Martin Guzman and Joe Stiglitz analyze the Argentine economy, and Macri’s economic interventions and finds them wanting, or worse!

A change in macroeconomic policies will not be sufficient to set Argentina on a path of inclusive and sustained economic development. But, as last month’s currency scare showed, abandoning the approach adopted by President Mauricio Macri’s administration at the end of 2015 is a necessary step.

The currency scare that Argentina suffered last month caught many by surprise. In fact, a set of risky bets that Argentina’s government undertook starting in December 2015 increased the country’s vulnerability. What was not clear was when Argentina’s economy would be put to the test. When the test came, Argentina failed.

Argentina had to address a number of macroeconomic imbalances when President Mauricio Macri took office at the end of 2015. Early measures included the removal of exchange-rate and capital controls and the reduction of taxes on commodity exports. Argentina also recovered access to international credit markets following a settlement with so-called vulture funds over a debt dispute that had lasted more than a decade.

The government undertook a new macroeconomic approach based on two pillars: gradual reduction of the primary fiscal deficit, and an ambitious inflation-targeting regime that was supposed to bring annual price growth down to a single-digit rate in just three years.

Markets cheered. The prevailing view, eagerly promoted by Argentina’s government, was that the country had done what was necessary to achieve sustainably faster economic growth. Presumably, foreign direct investment would flow in. But it did not.

https://www.nakedcapitalism.com/2018/06/roots-argentinas-surprise-crisis.html

 

In order to apply an inadequate whitewashing of Macri’s failed bid to re-enter the Neo-Liberal World Order Mr. Dujovne offers this:

Mr Dujovne nevertheless pointed to innovative clauses in the deal proposed by Argentina that will allow the government to increase spending on social programmes and relax the deficit targets if necessary, which the fund “welcomed warmly”. “It will probably apply this in other countries,” he added.

Such socially sensitive terms contrast with past IMF programmes, not least the fund’s last standby arrangement with Argentina that ended with the 2001-02 financial crisis that had grievous social consequences and tarnished the multilateral lender’s reputation in the country and beyond.

What would the Plutocrats/Neo-Liberals do without the Financial Times?  Mr Dujovne comments on the economic effect of the IMF agreement:

“It is very probable that in the first quarters we will make use of the option [to access the quarterly disbursements stipulated in the agreement], but then as sovereign risk falls and the market has a greater appetite to absorb Argentine debt at low rates, we can [return to the market]. But for now the fund’s rates are very favourable,” said Mr Dujovne.

Then on the political future of Mr. Macri:

“Winning the elections will not depend on whether growth is at 4 per cent rather than 2 per cent, but on whether people continue to want the change this government represents, or to go back to populism,” he said, arguing that the Peronist opposition was “very far from offering itself as an alternative” for voters.

No surprise that the failure of Macri’s interventionism is unmentioned, but that Anti- Populism is the reference point of choice. The ‘as if ‘ here is that the political/economic landscape will remain the same. Call this by its name political delusion.

Almost Marx

https://www.ft.com/content/23975fd2-701d-11e8-92d3-6c13e5c92914

 

 

About stephenkmacksd

Rootless cosmopolitan,down at heels intellectual;would be writer.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.