|Argentina and the IMF- (05.04.02)|
Argentina appears to have a reached a (possibly brief) period of political and economic stability in their current financial crisis. The riots, changes of leadership, dramatic currency changes and soaring unemployment have stopped for the moment.
However, stability brings along the long term issue of allowing the country back into the global economy, with the IMF being the guardians of the requirements of the free market. The constraints that the IMF put upon a recovering economy almost always worsen social and economic conditions for the citizens of that country. It almost appears sometimes as if the penalty for defaulting on international debt is to have an unprotected free market that no government of a succesful economy would dare to inflict upon its voters.
The problem the IMF has with Argentina is that the imposition of its normal suite of financial policies would probably result in a return to Argentina's old problem of hyper-inflation. The only solution to this is to constrain the economy to such an extent that its long term potential for growth would be damaged for more than a decade. Allowing Argentina to run a normal economy rather than an IMF imposed one would allow its recent economic growth performace to return and would provide the best return for its creditor banks and governments.