The Role of the IMF in Argentina, 1991-2002
Draft Issues Paper for an Evaluation by the Independent Evaluation Office (IEO)
plunged into a devastating economic crisis in December 2001/January 2002,
when a partial deposit freeze, a partial default on public debt, and an
abandonment of the fixed exchange rate led to a collapse in output, high
levels of unemployment, and political and social turmoil. These events
have raised questions regarding the country's relationship with the IMF
because they happened while its economic policies were under the close
scrutiny of an IMF-supported program. Furthermore, the IMF had been almost
continuously engaged in Argentina since 1991, when the "Convertibility
Plan" fixed the Argentine peso at parity with the U.S. dollar in a
currency board-like arrangement. While Argentina experienced strong growth
and very low inflation for much of the 1990s, it fell into a deep recession
in 1998 and, partly because of the strictures of the convertibility regime,
became increasingly constrained in its ability to use standard macroeconomic
policy tools to engineer a recovery. As the economy slowed and international
investors became nervous, the country's already high external debt service
burden grew to a point where the debt became unsustainable.
before the crisis, the country had been widely praised for its achievements
in stabilization, economic growth and market-oriented reforms under IMF-supported
programs. During the decade preceding the crisis, there were four successive
financing arrangements for Argentina and its balance of outstanding credit
to the IMF rose sharply after 2000 (Figure 1).1 The
IMF also provided extensive technical assistance (TA) during the period,
dispatching some 50 missions between 1991 and 2002, mainly in the fiscal,
monetary and banking areas.
accountability for a member country's economic policy must rest with its
national authorities, since the crisis, a number of observers have raised
questions about the effectiveness and quality of financing and policy advice
provided by the IMF. Some critics have argued that the IMF's main fault
lay in providing too much financing without requiring sufficient policy
adjustment, while others have alleged that the policies recommended by
the IMF actually contributed to the crisis. In either case, the eventual
collapse of the convertibility regime and the associated adverse economic
and social consequences for the country have, rightly or wrongly, had a
reputational cost for the IMF.
will focus on the period from 1991 to early 2002, covering the time from
the adoption of the convertibility regime to the immediate aftermath of its
collapse.2 The evaluation will review the evolution
of the IMF's advice and internal views on key areas of Argentina's economic
policy, identify how the IMF came to certain decisions at critical junctures
in its relationship with the country, and assess how reasonable the decisions
were in light of information available at the time. The evaluation will also
consider—with the benefit of hindsight—if better outcomes could
have been achieved with a different set of decisions by the IMF. Since the
decisions of the IMF could not have been independent of the decisions and
actions of the national authorities, the evaluation will implicitly take
positions on decisions of the authorities in some cases, particularly when
considering ownership and implementation issues. However, the primary focus
of the evaluation will be placed on drawing lessons for the IMF. In discussing
the decision making process within the IMF, due attention will be paid to
the respective roles played by IMF staff, management, the Executive Board
and, to the extent possible, the major shareholder governments.
This version of
the paper incorporates the many comments and suggestions on an earlier draft
received from IMF staff, members of the Executive Board, external experts
and visitors to the IEO's website. It is now being published on the website
to invite inputs and comments on the set of issues the IEO intends to explore
in the evaluation. Section II briefly surveys the key developments in Argentina's
economy and economic policies during the period under consideration, and
reviews some of the interpretations of these events that have been provided
by academic and other observers. Section III discusses the principal issues
that the IEO has identified as relevant for the evaluation. Finally, section
IV describes the methodology and timeline of the evaluation.
Developments under the Convertibility Plan
Following a decade
of high inflation and stagnant output, and several failed attempts to stabilize
the economy, Argentina fell into hyperinflation in 1989. The Convertibility
Plan, introduced in April 1991, was designed to stabilize the economy through
drastic, and almost irreversible, measures. The plan was centered around
the use of a currency board-like arrangement, in which the peso (set equal
to 10,000 australes) was fixed at par with the U.S. dollar and autonomous
money creation by the central bank was severely constrained. Significantly,
it also included a broader agenda of market-oriented structural reforms to
promote efficiency and productivity.
After the adoption
of the Convertibility Plan, stabilization was achieved quickly and, with
the aid of structural reforms, the economy grew at an average rate of 6 percent
per year through 1997 (see Table 1 in the appendix for
key economic indicators during 1991-2002). Although a few recessionary episodes
were experienced, they were short lived and, except for the one that followed
the Mexican crisis in early 1995, relatively mild. The Mexican crisis tested
the resilience of the convertibility regime, as interest rates rose sharply,
output fell substantially, and unemployment increased to over 18 percent.
When a V-shaped recovery ensued, this was widely interpreted as evidence
of its robustness and credibility.
that began in the second half of 1998, however, turned out to be both prolonged
and severe. It was triggered and then compounded by a series of adverse external
shocks, particularly the Russian default and the LTCM crisis in August-September
1998 and the devaluation of the Brazilian real in January 1999. In contrast
to most other emerging market economies at the time, the Argentine economy
did not enjoy a rapid recovery. Instead, the sluggishness of GDP growth fueled
concerns about the sustainability of public debt, concerns which eventually
In late 2000,
Argentina began to experience severely diminished access to capital markets,
as reflected in a sharp and sustained rise in spreads on Argentine bonds
over U.S. Treasuries (Figure 2). To this, the IMF responded by providing
exceptional financial support. Uneven implementation of promised fiscal adjustment
and reforms, a worsening global macroeconomic environment, and political
instability, however, led to the complete loss of market access and intensified
capital flight by the second quarter of 2001. A series of deposit runs began
to have a severe impact on the health of the banking system. In December
2001, the Argentine authorities imposed a partial deposit freeze. With Argentina
no longer in compliance with the conditions of the expanded IMF-supported
program, the IMF decided to suspend disbursements. At the end of December,
in a climate of severe political and social unrest, the country partially
defaulted on its international obligations; in January 2002, it formally
abandoned the convertibility regime. A sharp depreciation of the peso and
a full-blown banking sector crisis ensued. By the end of 2002, the economy
had contracted by 20 percent since the onset of the recession in 1998, with
tremendous economic and social costs to the population.
Contributing to the Crisis
While there are
competing explanations as to the primary cause of the Argentine crisis, it
is clear that several factors played a role in creating vulnerabilities,
with changing relative importance over time. These include: (i) an excessively
lax fiscal policy, particularly during times of rapid growth when substantial
fiscal surpluses should have been achieved as a buffer against future downturns;
(ii) the convertibility regime itself, which did not allow needed real exchange
rate adjustment to take place through nominal depreciation; (iii) excessive
and unpredictable swings in the volume of global capital flows to emerging
market economies; (iv) the slow pace of structural reform in some critical
areas, which hindered the ability of domestic wages and prices to adjust
quickly; and (v) institutional and political factors which prevented the
prompt implementation of corrective measures. Against this background, some
additional factors helped to trigger the crisis and to exacerbate the impact
of these underlying weaknesses: (vi) a series of adverse external shocks,
including the appreciation of the U.S. dollar, the Russian default and the
LTCM crisis, the devaluation of the Brazilian real, and the global economic
slowdown; (vii) the impact of slow growth and high interest rates (resulting
from higher risk premia on Argentine bonds) on the prospective path of the
ratio of debt to GDP; and (viii) in the final stage of the crisis, a weakening
of prudential defenses in the banking system, which contributed to the loss
of confidence in the currency and complicated attempts to restore stability
once the convertibility regime collapsed. It is possible that any one or
a few of these factors would have been only a drag on growth and a potential
source of vulnerabilities, but all these factors in combination proved to
be sufficient to create a major crisis and to make the convertibility regime
all but impossible to sustain.
have held that fiscal policy was excessively lax, particularly in those years
when rapid growth offered scope for a countercyclical fiscal policy that
would have helped to reduce debt. Persistent deficits reflected the poor
transparency of fiscal operations, widespread tax avoidance and evasion,
and the limited ability of the federal government to control the expenditures
of the provincial governments. Compounding these weaknesses, it is sometimes
argued that irresponsible policies were pursued, such as using proceeds from
privatization for current expenditures instead of debt reduction. As a result,
when a recession hit in 1998, the debt stock had grown to such an extent
that stabilizing it would have required a sharply procyclical fiscal adjustment,
which may not have been realistic in the context.
(ii) The convertibility
view challenges the choice of the convertibility regime itself, given the
lack of price and wage flexibility and the country's geographical pattern
of trade and vulnerability to external shocks. As a result, the convertibility
regime did not allow the real effective exchange rate of the peso to depreciate
when necessary. In particular, the strength of the U.S. dollar in the late
1990s and the devaluation of the Brazilian real in 1999 led to a sustained
rise in Argentina's real effective exchange rate, which in turn caused a
loss of competitiveness and stifled growth and exports. Moreover, convertibility
obliged Argentina to align its monetary policy with that of the United States,
despite cyclical differences between the two countries. According to this
line of analysis, Argentina's fiscal policy might have been more sustainable
if the convertibility regime had not been in place. Instead, as the exchange
rate peg forced an increase in the debt service ratio by suppressing the
growth of exports and widening the current account deficit, there was no
politically feasible stance of fiscal policy that would have been compatible
with the exchange rate regime, once the economy had slowed down.
in capital flows
Some have argued
that Argentina relied too much on capital inflows, rather than generating
domestic savings, in part reflecting the relatively slow development of domestic
financial markets. When there was a sharp reduction (or "sudden stop" as
it is sometimes called) in global capital flows to emerging market economies
in 1998, it became increasingly costly for Argentina to raise funds on international
capital markets. Because of the convertibility regime, and because of the
relatively small size of its export sector, Argentina could not easily adapt
to the shock through a rapid depreciation of the real exchange rate. Thanks
to careful management of maturity structure, the impact of the fall in inflows
was not as sudden as it would have been had more of the debt been contracted
at shorter maturities. Nevertheless, as adverse debt dynamics (see below)
took their toll, eventually Argentina faced few options beyond restructuring
the debt or outright default.
rigidity of the Argentine economy—and the lack of reform to correct
the problem—is another factor that has been cited as having contributed
to the crisis. The convertibility regime required that real exchange rate
adjustment take place through price changes, rather than through movements
in the nominal exchange rate. This meant that, in the conditions facing Argentina
from 1995 onwards, domestic prices and wages needed to fall in order to compensate
for the appreciation of the U.S. dollar against other major currencies. Yet,
after some efforts in the early 1990s, attempts to reform the labor market
came to a virtual halt in the mid-1990s, and progress in the liberalization
of other areas, such as product markets, foreign trade, utilities and infrastructure,
was slow. Openness to trade was another area where structural reform may
have been incomplete. While many direct and indirect trade barriers were
removed, and while exports did grow steadily, by the end of the 1990s Argentina
was still a relatively closed economy. This limited the country's ability
to earn foreign exchange to repay its external debt. It also meant that a
very large real depreciation was necessary to counteract shocks such as the
strength of the U.S. dollar in the late 1990s and the global economic slowdown
in 2001. Finally, the persistence of the current account deficit through
the 1990s may itself have partly reflected structural inefficiencies.
and political factors
Some have noted
the institutional and political features of Argentina as factors that limited
the ability of the federal government to take decisive actions when confronted
with a crisis. Electoral politics, for example, led to compromises on needed
fiscal adjustment in the provinces and on the structural reform agenda. In
general, the considerable power of the provincial governments, in a context
where provinces had been entrusted with major public expenditure responsibilities,
greatly reduced the flexibility of fiscal policy. Corruption and other governance
issues have also been cited as factors undermining the credibility of the
It is often pointed
out that Argentina benefited from the favorable global economic conditions
that characterized much of the 1990s. When these conditions began to deteriorate
toward the end of the decade, the impact on Argentina was severe, and all
the more so because the convertibility regime and remaining structural rigidities
prevented a flexible domestic policy response. Among the external shocks
were the Russian/LTCM crises of 1998, which led to a reduction in capital
flows to emerging market economies and an increase in risk premia; the devaluation
of the Brazilian real, which had a negative impact on the competitiveness
of Argentina's exports; the appreciation of the U.S. dollar against most
other currencies in the late 1990s, which increased Argentina's real effective
exchange rate; and the global economic slowdown that started in the beginning
of 2001, which depressed the price of Argentina's main exports.
Given the past
history of fiscal policy, debt dynamics began to have a life of its own,
severely constraining the policy options available to the authorities. Many
commentators emphasize that, after 1998, the combination of a large existing
stock of external debt, rising country risk premia and sluggish growth caused
the ratio of debt to GDP to rise uncontrollably. All of these factors fed
upon one another, to the point where it would have been necessary for the
authorities to run an unrealistically large primary surplus simply to keep
the debt to GDP ratio from rising further.
Until the depositor
runs started to accelerate in the spring of 2001, the Argentine banking system
was considered to be a model for emerging market economies in terms of prudential
standards, capitalization and liquidity. The sound banking system, a product
of sustained efforts by the authorities, was an important supporting element
of the convertibility regime in which the ability of the central bank to
serve as the lender of last resort was limited. By the end of 2001, however,
the cumulative effects of several years' recession, a year's capital flight
and a series of controversial policy moves had left the banking system vulnerable
to any further blows to public confidence. It has been widely argued that
the manner in which the authorities tried to manage the exit from convertibility—including
the legally ambiguous measures to block deposits, and the forced conversion
of dollar-denominated bank assets and liabilities into pesos at asymmetric
rates—compounded these weaknesses. As a result, Argentina entered 2002
with not only a currency and sovereign debt crisis, but a banking crisis
as well. This severely complicated efforts to resolve the multiple crises
as quickly as possible.
Issues for Evaluation
The purpose of
this evaluation is to draw lessons for the IMF from its involvement in Argentina
during the convertibility regime and its immediate aftermath. In doing this,
we will seek to answer the following overarching questions:
- What was the
IMF's diagnosis of conditions in Argentina and how did it evolve over time?
- How was the
IMF's diagnosis translated into program design, conditionality and financing
- What were the
roles of IMF staff, IMF management, the Executive Board, and the authorities
of large shareholder governments in the formulation of IMF decisions?
- How quickly
and effectively were the lessons from previous crises (including the Mexican,
East Asian and Brazilian crises) incorporated into policy advice, financing
policies and decision-making procedures?
- What was the
influence of global and regional conditions, particularly the desire to
prevent contagion to and from other emerging market economies, on the decisions
made in regard to Argentina?
- Were the views
and preferences of national authorities given too much, too little or an
appropriate amount of consideration in program design? In other words,
was the proper balance struck between "ownership" and the objectives
of the IMF, in cases where these were not in alignment?
- How effective
were the IMF's policy advice and conditionality in influencing the policies
actually pursued by the authorities? To what extent was insufficient implementation
of agreed policies the cause of the problem?
- What have been
the lessons drawn by the IMF from the crisis to date? Should more or different
lessons be learned?
In what follows,
we present a list of specific issues to be addressed in the evaluation. These
issues can be divided into two broad categories, corresponding to the two
related but distinct phases of IMF involvement: first, the precrisis period
of 1991-2000, and second, the crisis and its immediate aftermath, 2000-2002.
Precrisis Period, 1991-2000
From the establishment
of the convertibility regime in 1991 until late 2000, the IMF saw its primary
role as providing a supportive environment for the success of convertibility
through its financing and policy advice. The emphasis of the advice was on
the strengthening of the financial system, the implementation of structural
reforms, and the adoption of an appropriate fiscal policy stance. Among the
issues to be considered are:
- The convertibility
regime. What were the IMF's initial views on the convertibility regime
and how did they evolve over time? Did it view the convertibility regime
as a sustainable system, given Argentina's economic and structural characteristics,
including its openness and trading pattern? What were the IMF's views on
when and how to exit from the fixed exchange rate peg? Did it have, and
discuss with the authorities, an exit strategy? What was the IMF's assessment
of Argentina's real effective exchange rate over the period? Were the IMF's
views on these issues similar to those of the Argentine authorities or
- Fiscal policy.
How thoroughly did the IMF analyze the stance of fiscal policy? For example,
did it fully take into account off-budget items (if any), provincial finances,
deferred payments, the nonrecurring nature of some receipts, pension reform,
etc.? How did it view the fiscal impact of the pension reform? What advice
was given, through surveillance and technical assistance, in the areas
of tax administration, fiscal federalism and fiscal transparency? How adequately
did it analyze debt sustainability, and how was this analysis translated
into advice on fiscal policy? What was the impact of this advice, and what
factors determined the strength of this impact?
- External debt
inflows. How aware was the IMF of vulnerabilities inherent in borrowing
in foreign currency? Why was there a large accumulation of external debt
when fiscal deficits were seemingly modest? What were the underlying assumptions
about the sustainability of capital inflows and determinants of Argentina's
sovereign spread? What was the quality of dialogue with the private sector
in assessing how the markets might react to adverse economic developments?
reform. How successful did the IMF view the initial round of structural
reforms in the labor market, privatization and other competitiveness enhancing
areas? How did the IMF collaborate with the World Bank in Argentina's structural
reform program? How did the IMF react to the apparent halt of initial gains
in structural reform?
and Political Factors. What was the IMF's analysis of the ways in which
Argentina's institutional weaknesses and political process conditioned
economic policy making? Was the IMF candid in discussing corruption, tax
evasion, and other governance issues? How much did the IMF analyze the
political feasibility of the policies it was advocating? Did structural
conditionality appropriately address Argentina's chronic institutional
in the banking system. What were the IMF's initial views of Argentine's
banking system? How did the IMF contribute to the strengthening of the
banking system through policy advice and technical assistance? Was the
IMF aware of latent vulnerabilities arising from financial dollarization,
exposure to the public sector, and the limitation on lender of last resort
support? Did it have an estimate of the private sector balance sheet, and
consider how this might affect the banking system in the event of a major
- Official financing.
What was the rationale for continued financial support, particularly after
macroeconomic stabilization had largely been achieved in 1993, and how
was the level of access determined? Was there an exit strategy from IMF
financing? How did the IMF's views on key economic policy issues influence
program design? Was conditionality adequately supportive of the IMF's policy
advice? Given the large number of waivers granted to Argentina over the
period, was the IMF's appraisal of performance under its programs suitably
rigorous? What was the impact of successive IMF-supported programs on private
capital flows and did they create moral hazard? What was the role of IMF
financing in helping Argentina to weather the crises that affected Mexico
in 1994-95, East Asia in 1997-98, Russia in 1998 and Brazil in 1998-99?
Were the criteria for access to exceptional finance (greater than three
times the member's IMF quota) followed? Would the size of access have been
justified if the criteria adjusted subsequently had been in force at the
- Regional and
global factors. Did the IMF adequately take account of events in Brazil
and elsewhere in Latin America in formulating its analysis of developments
in and prospects for Argentina? Did the IMF attempt to formulate a consistent
view of developments across different countries in the region? How did
concerns about the implications of a crisis in Argentina for other emerging
economies worldwide affect IMF decisions? Were such concerns justified?
and Data Dissemination. Most IMF staff reports related to its Argentina
programs, especially in the later years, were released immediately to the
public. What impact did this have on the quality of the IMF's policy advice,
the candor of the staff's assessments, and market views of developments?
Did IMF staff have adequate access to crucial data required to make proper
Crisis and Its Immediate Aftermath, 2000- 2002
ability to access international capital markets underwent a significant deterioration
at the end of 2000, the role of the IMF shifted more towards crisis management.
At several points in the year that followed, the IMF was faced with a critical
dilemma: whether to provide financing, thereby averting a crisis but also
prolonging a potentially unsustainable situation; or whether to end its support,
thereby unleashing unpredictable consequences which could potentially spread
to other emerging market economies. For each of the key decisions, the evaluation
will attempt to determine how the IMF viewed this dilemma, and how it attempted
to resolve it through the design of the financing and policy package. In
addition, it will assess how the decision was reached and whether the alternatives
were adequately considered. Here, the evaluation will duly consider the respective
roles played by IMF staff, management, and the Executive Board. The following
issues regarding the key financing decisions taken during this period merit
- The December
2000 decision to provide exceptional access. Did Argentina receive financial
support beyond its capacity to pay? What was the role of private sector
involvement (PSI) in the program, and were the assumptions about the impact
of the program in "catalyzing" a reversal of capital outflows
reasonable? What were the alternatives, and how were they considered in
reaching the decision? Did the decision taken have a reasonable chance
of success? Was there a contingency plan?
- The program
review in May 2001. Following its standard procedures, the IMF Board reviewed
the Argentina program in May 2001 and decided to continue disbursements,
even though, because of the worsening fiscal situation, Argentina was not
in compliance with many of the conditions of the program. What considerations
entered into this decision? What was the IMF's view of the policy program
being pursued at the time, including plans to modify the mechanisms of
the convertibility system, the scheme to use taxes and subsidies to reverse
the impact of the dollar-peso peg on trade, and plans to swap outstanding
debt for longer maturity instruments?
- The September
2001 decision to augment the package. What were the objectives of the enlargement,
and were they realistic? How did the IMF view the authorities' "zero-deficit
law," and what role did this play in the decision? What were the alternatives,
and how were they considered in reaching the decision? What was the role
of major shareholders in formulating and approving the financing package?
Why was the strategy of attempting to encourage a private-sector debt restructuring
unsuccessful? Did the package only finance and provide more time for capital
- The December
2001 decision to withhold further disbursements. What contributed to the
decision to "pull the plug" then? What were the alternatives
considered? Could a similar decision have been made at a different date
at lower cost? In particular, what was the IMF's view of the attempted
debt exchange, and why were disbursements halted before the second stage
of the exchange could be completed? Should the IMF have pursued a different approach
to private sector involvement, which could have averted the default? What
was the nature of the IMF's involvement in the subsequent controversial
measures taken by the authorities in early 2002? How did the actual consequences
of the default and devaluation compare to the staff's expectations?
IV. The Methodology and timeline of the Evaluation
The purpose of
this evaluation is to understand the factors that determined IMF decisions
during the period under review and, based on this analysis, to draw relevant
lessons as to how the IMF's policies and procedures could be improved. The
evaluation will rely on the IMF's internal and published documents to assess
the evolution of institutional views and analysis. This will be supplemented
by interviews with IMF staff, officials of the Argentine government and central
bank, and other key decision makers in the IMF, its shareholder governments
and the private sector; a review of the academic literature and public discussion;
and analyses of data, including a detailed review of fiscal accounts, comparative
analysis of fiscal policy between Argentina and other emerging market economies,
assessment of macroeconomic projections in program documents, and a simulation
of debt dynamics. In order to obtain a broad perspective on issues, views
will also be sought from academic and private-sector experts in North and
South America, Europe and Asia, as well as interested parties in civil society.
the questions and issues identified in this paper, we recognize that any
economic outcome is a result of a complex sequence of decisions that are
made subject to available information and exogenous factors (see Figure
3 for a schematic representation of stages and elements of decision making
in economic policy).3 This means that it is often
not possible to ascribe responsibility to any one decision; establishing
accountability is even more difficult. For analytical ease and convenience,
therefore, the evaluation will be guided by the following criteria at each
stage, by taking available information, exogenous factors, and the policies
followed by the authorities as given:
(i) At stage
one: whether the IMF's diagnosis incorporated all the relevant information
available at the time and was based on reasonable macroeconomic forecasts;
(ii) At stage
two: whether additional information would have led to a different (and
more accurate) diagnosis;
(iii) At stage
three: whether the IMF's available instruments (i.e., surveillance and
financing facilities) were used in a way that maximized their impact;
(iv) At stage
four: whether program-related decisions correctly considered all relevant
factors, including available alternatives and the risks they entailed;
(v) At stage
five: whether different instruments or decisions might have led to a superior
By their very
nature, some of our judgments would require use of counterfactual analysis,
and any conclusions drawn from such analysis can only be tentative. Even
so, with these limitations in mind, we anticipate that the approach to evaluation
proposed here will enable us to identify specific areas in which there is
room for improvement in the IMF's practices and procedures.
Comments on this
paper and inputs relating to the substance of the issues raised therein are
welcome and should be submitted through the IEO's website (www.imf.org/ieo)
or by email (firstname.lastname@example.org). It is expected
that the evaluation report will be drafted toward the end of the year and
will be released to the public, following discussion by the IMF Executive
Board, sometime in 2004.
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la Correspondencia Fiscal, el Federalimo y la Democracia Representativa," unpublished,
IAE, Universidad Austral.
Luis, 2002, "Currency Crisis: A Practitioner's View," paper presented
at the Brookings Trade Conference, Washington, Brookings Institution, May.
M. Florencia Gabrielli, and M. Josefina Ouillet, 2002, "Determinando
las Causas de las Corridas Bancarias en Argentina durante 2001," unpublished,
Banco Central de la Republica Argentina, Buenos Aires.
de Precios y Crecimiento Sostenido: Convertibilidad Más Flexible o
Meta Inflacionaria," unpublished, UADE.
2002, "Argentina and the Fund: From Triumph to Tragedy," Policy
Analyses in International Economics No. 67 (Washington: Institute for International
2002, "The Recent Crisis of the Argentine Economy: Some Elements and
Background," paper presented at the METU Conference, Ankara, September.
and Luis Servèn, 2002, "The Anatomy and Physiology of a Multiple
Crisis: Why Was Argentina Special and What Can We Learn from It?" Latin
America and Caribbean Regional Office, World Bank.
2002, "The Avoidable Argentine Crisis: Bad Luck, Bad Economics, Bad
Politics, Bad Advice," paper presented at the Brookings Trade Conference,
Washington, Brookings Institution, May.
H., 2001, La Dictadura Económica. Testimonios de un Industrial (Buenos
A., Javier Bolzico, Pablo Druck, Alejandro Henk, José Rutman, Walter
Sosa Escudero, and Streb Jorge, 2001, "Credit Constraints Facing Firms
in Argentina," unpublished, CEMA.
A. and Javier Ortiz, 2001, "Nuevas Perspectivas sobre los Efectos
de las Políticas Monetarias y Fiscales en un Régimen de Tipo
de Cambio Fijo: Interacciones entre el Riesgo País y el Nivel de Reservas
2002, "Reform in Argentina, Take Two. Trade Rout," The New Republic,
Rossi, C. E. Rodolfo,
2003, El Colapso de la Convertibilidad Monetaria (Buenos Aires: Ed.
1996, La política Fiscal Durante la Convertibilidad, Centro
de Estudios Públicos, Buenos Aires.
, 2001, "Una
Vez Más, la Política Fiscal," Centro de Estudios Públicos,
Joost and Age Akkerman (eds.), 2003, The Crisis That Was Not Prevented (The
Hague: Forum on Debt and Development).
Luis Angel Rojo, John Crow, Andrew Crockett, 2002, "Economic and Financial
Issues Facing Argentina," Report to the Government of Argentina and
the IMF by a Panel of Independent Advisers.
Congress, Joint Economic Committee, 2003. "Argentina's Economic Crisis:
Causes and Cures," Washington, June.
World Bank, Latin
America and Caribbean Regional Office, 2002, "Argentina: What Happened?
A Retrospective Review," unpublished.
and Dean Baker, 2002, "What Happened to Argentina?" Briefing Paper,
Center for Economic and Policy Research.
1. Argentina: Key Economic Indicators
GDP growth (percent)
private consumption (percent)
government consumption (percent)
fixed investment (percent)
(CPI, Dec/Dec, percent)
(M1, Dec/Dec, percent, in pesos)
money (Dec/Dec, percent, in pesos)
Account (in billions US$)
percent of GDP)
Exports growth (in US$, percent)
Imports growth (in US$, percent)
debt (in billions of US$)
percent of GDP)
service ratio / exports (percent)
reserves (in billions of US$)
rate (peso/$, end-period)
effective exchange rate (end-period)1
of Trade ( percent change)
balance (in millions of pesos)
government (in millions of pesos)
government (in millions of pesos)
balance (in millions of pesos)
government (in millions of pesos)
government (in millions of pesos)
database; the Ministry of Economy of Argentina; and Global Development
1Average of 1990=100.
financing arrangements included two extended arrangements under the Extended
Fund Facility (EFFs) approved in 1992 and 1998, and two Standby Arrangements
(SBAs) approved in 1996 and 2000. The 1998 EFF was treated as precautionary,
involving no intention on the part of the authorities to draw on the resources
made available under the arrangement. The 2000 SBA, in addition to resources
under the credit tranches, also made available to Argentina resources under
the Supplemental Reserve Facility
2The choice of this period leaves out issues related
to the role of the IMF in Argentina's subsequent economic reconstruction and
recovery. The IEO's terms of reference do not allow us to evaluate issues that
have direct bearing on the IMF's ongoing operations.
3Figure 3 is only illustrative; it is not meant
to be an exact representation
of the complex decision making tree.