The global economic context does not give respite. The war and the changes in international financial conditions, which have become very restrictive as a result of the rate hikes of the main central banks, are phenomena that have a full impact on the Argentine economy.
The Organization for Economic Cooperation and Development (OECD) analyzed some of the effects that the armed conflict generates for Argentina. He noted that while trade links with Russia and Ukraine are minimal and food exports have temporarily benefited from rising world prices, “rising energy import costs have worsened the trade balance, as Argentina it is a net importer of energy”. For quantitative purposes, it was learned that the Government presented a document to Kristalina Georgieva, Managing Director of the IMF, where it is calculated a cost of almost 5000 million dollars product of the war.
On another critical front such as that of international reserves, in the framework of the last G20 meeting, the presidents of Argentina and of China agreed to expand by 5 billion dollars the part of the swap in force that can be considered as freely available.
Some specialized media tried to minimize the news, pointing out that the program with the IMF does not allow these resources to be counted in the reserves goal. It is an observation that lacks total practical relevance since they end up being strengthened in one way or another. Even if the swap were only used to cover part of the huge trade deficit with China, the external position ends up becoming more robust.
Objections were also made regarding the claim of the Argentine government for the overloads and some analyst called it an “obsession”. However, the Government has the support of various economists and organizations that point out the regressive nature of surcharges, which affect countries that have more balance of payments needs.
An extreme example that illustrates the international financial architecture is that of Ukrainea country that agreed to a loan to meet the needs of the war and that also faces overcharges.
Recent financial dynamics further expose the need for change. The basic rate paid by IMF debtors before the war was 1.19 percent and today it stands at 3.72 percent, a significant increase of 2.5 percentage points. This jump is a direct consequence of the monetary decisions of the main economies, which have been raising reference rates sharply with the argument that it is necessary to anchor inflation expectations. If the basic component and the surcharges (3.0 percent) are added, we arrive at a rate of 6.72 percent, an extremely burdensome rate.
In the final communiqué of the G20 in Bali, Indonesia, the “continuation of discussions” on this issue is indicated and Kristalina Georgieva promised to take it to the board. It is worth remembering that the G20 is made up of the main countries of the world and it is they who define the policies of the IMF. The question then is why this matter has not yet been resolved. In this regard, a point that is hardly mentioned is that with the interests of the credits that the Fund grants, it maintains its operating structure. That’s why the revision of the surcharges requires a political decision and a budgetary compensation on the part of the member countries.
It is essential that there be a favorable resolution so that the interest rate paid by Argentina and the other economies that suffer from the issue of surcharges can be significantly lowered. Such a measure would generate very important tax and currency savings.
In an unfair and uncertain world, The Government continues to manage on multiple fronts with the aim of guaranteeing a growth path with inclusion.
* National Deputy of the Front of All. President of the Solidarity Party.