New IDB President Pledges to Help Argentina with “Long Arduous” IMF Negotiations

RIO DE JANEIRO, BRAZIL – Mauricio Claver-Carone, the White House official elected to lead Latin America’s regional development bank, said he aims to play a constructive role in Argentina’s negotiations with the International Monetary Fund.

Claver-Carone said in an interview he wanted to help Argentina negotiate a new program with the IMF to replace a failed 2018 agreement that has already seen around US$44 billion (R$220 billion) disbursed, but said the talks would be “long and arduous.”

He said he pledged his support in a call with Argentina’s President Alberto Fernandez shortly after Saturday’s election for a new president of the Inter-American Development Bank. Argentina had favored delaying the election, and abstained from the vote, along with 15 other member countries.

“They’ve obviously asked for help and support with the IMF negotiation, and we look forward to doing so,” Claver-Carone, who starts his term on October 1st, said in his first interview since Saturday’s election. “We want to see them get into a program with the IMF. We want to help them that.”

Argentine Finance Minister Martin Guzman told local newspaper La Nacion on Sunday that Argentina was seeking to avoid repayments to the IMF until 2024. Argentina, which is heading into its third year of recession, this month restructured over US$100 billion of its foreign currency debt with private creditors.

It faces the bulk of its repayments on its current stand-by arrangement with the IMF in 2022-2023 when almost US$40 billion must be repaid.

Claver-Carone said Guzman had communicated his overall goals for the negotiation, but officials had not specifically mentioned their desire to push off all debt payment until 2024.

“Obviously that would be a decision for the IMF and the IMF board of directors,” he said. He added it was important for Argentina to move past the obligations that had “prevented them from moving forward,” and negotiate a program better suited to current conditions.

In addition to supporting Argentina, Claver-Carone said the IDB would work to provide debt relief for other middle- and higher-income countries, especially smaller island nations, that had seen their economies crushed by the pandemic and the lockdowns needed to contain the virus.

Middle-income countries are not eligible for a program led by the Group of 20 major economies that has allowed countries to postpone bilateral debt payments through the end of the year, but Claver-Carone said many still needed help.

“Some of these nations are kind of stuck in the middle … with no way out due to their income or the way their income is measured despite the inequalities,” he said.

He said he had assured IDB members he would work to “be creative in finding ways to find some relief for these countries.”

Source: MercoPress