THE ECONOMIC ITCH
THE IMF CAN’T STOP
TRYING TO SCRATCH
Argentina, South America’s second- largest economy, is an addict. And right now, it’s checking itself into rehab... yet again. Argentina isn’t addicted to opioids, Netflix, alcohol, or ChapStick... It’s hooked on something far worse, the financial equivalent of crack cocaine: Debt. How did Argentina get here? I told you part of the story last month. It has a legacy of uniquely toxic populist politics, an electorate that wants everything for free, and a history of irresponsible politicians followed by grown- ups who try to clean up the mess. But Argentina didn’t get there alone. As Dr. Phil might tell you, an enabler is someone who – intentionally or not – prods an addict deeper into the hole of dependency. Deliberately or not, enablers can make an addict’s bad situation much worse.
MEET THE ENABLER Argentina’s enabler is the Washington, D.C.- based multinational lender International Monetary Fund (“IMF”). With money from 189 member countries, the IMF is a cross between a payday lender and a free candy dispensary that’s next to an elementary school... only the candy is toxic, and the money definitely isn’t free. According to its website, the IMF’s primary purpose is to “ensure the stability of the international monetary system.” As part of that mandate, it’s been enabling Argentina’s debt habit since 1958. And the IMF has been a great lender – at least from the deadbeat borrower’s perspective. Argentina has defaulted on some of the 22 lending arrangements it’s had with the IMF. But “most of [them have] ended with bitterness on both sides,” says the Financial Times . And the IMF, the ever-faithful enabler, keeps dealing – most recently with the biggest
32
November 2019
Made with FlippingBook HTML5