Mission Concluding Statement 

Statement by the IMF Mission to Argentina

April 17, 2002

1. The mission has continued its discussions with the authorities toward a comprehensive economic program whose major planks were outlined in our remarks to the press last week. Such a program is designed to address the current difficulties faced by Argentina and to pave the way for sustained growth.

2. The discussions have continued to take place in a very cooperative atmosphere. As in March, the mission was privileged to meet with a very broad spectrum of society. These contacts with the wider community on specific elements of the program are helping develop consensus and pave the way for its full adoption by the authorities.

3. The fiscal framework of the program is being developed. We expect that the federal government will soon be in a position to finalize all the measures to keep the consolidated deficit in line with available financing. Special attention is being given to strengthening the social safety net and increasing protection for the poor. Finalization of the fiscal framework will depend upon reaching firm bilateral agreements with provinces to implement their recent pact with the federal government. A timetable to complete this exercise with provincial governments over the next few weeks has been finalized.

4. The mission has discussed with the government the elements of a comprehensive strategy to begin restoring confidence in the banking system. Monetary policy will play an enhanced role in stabilizing expectations and the central bank is working with commercial banks toward introducing high yielding deposit instruments.

5. In this context, the government has told the mission that it remains resolved to work with the Congress and the Judiciary to establish a legal framework conducive to maintaining depositor confidence, encouraging corporate restructuring, and restoring the confidence of investors. Such a framework is essential to help revive investment and growth in Argentina. A crucial step in this process is to establish an internationally recognized framework for the insolvency process, one that provides an appropriate balance between creditor and debtor interests, and to undertake other reforms of laws that inhibit engagement by the international community.

6. The government intends to make speedy progress in all these areas in the next few weeks. The mission then expects to return and to work with the government to complete all elements of a comprehensive economic program as soon as possible. Thus, as mentioned in our remarks of last week, there should be no doubt of the IMF's commitment to help Argentina, and that this help be anchored in a program that gives genuine promise of addressing the present difficulties in an enduring way and paving the way for growth.