Case Study 2 - IMF
Hello, my name is Domingo Ortega. I am a proud Argentinean who worked for my government for twelve years. Today, I am just one of many Argentineans who begs in the streets for food. It's hard to explain how things fell apart so quickly in my country.
Over the last ten years, my government took out over one hundred billion dollars in loans, and it made many changes to our economy-all under the direction of the IMF (click for extra info). Some people said the government was behaving foolishly, but for a long time I didn't think so. Then I started to notice more and more homeless people on the streets of Buenos Aires-entire families sifting through curbside garbage.
In 1998, things really started falling apart. Two thousand people were sinking below the poverty line every day, and our economy went into a deep recession. Since we didn't have much money coming in, the IMF lent us more. But they also told our government not to spend any money on helping the poor. This was at a time when people were so hungry that they would storm supermarkets demanding food. There were massive riots in December 2001. Many people were killed, and the president was thrown out of power. During this time, I lost my job. Though I had savings in the bank, I couldn't get to them because the government froze everyone's accounts.
In January 2001, our new president announced that there was no money to make payments on our $140 billion foreign debt. Our current president is trying to negotiate another loan with the IMF, but most of that would go towards debt payments. It's hard to find anyone on the streets of Argentina who has anything good to say about the IMF.
 |
I'll tell you what I think of the IMF-I wish that our government never got involved with them. We followed all their advice and where did it get us? Now we have a $140 billion debt, and almost half the population is living in poverty. The IMF has turned its back on us-they blame the crisis on corruption. I'm sick of these wealthy countries saying that they try to help us when really they're helping themselves. It shows that between 1990 and 1997, developing countries gave more money to wealthy countries than they borrowed. The money given to developing countries didn't go to fight poverty or develop industry; it went to make payments on existing debt. Overall, the lending banks made money on this deal-they received $77 billion dollars more than they lent out-and now countries like Argentina owe them even more!
 |
I'm an economist with the IMF, and I've got something to say too. First of all, I want to say that my colleagues and I sincerely want to help the countries that we work with. We're not evil people. Unfortunately, some of our policies that worked in Asia have failed in Latin America. That's the problem with formulas-they don't always work. For Argentina, the consequences have been severe. Personally, I'd like to see the IMF working more with people who are inside countries like Argentina instead of making so many decisions from Washington.
The IMF was born with a vision: to promote global economic security. If people don't think the IMF is doing a good enough job, then they need pressure it to be more accountable. But we have an important role to play, and we're not going change how we operate just because a few of the countries that we work with are in crisis.
|
