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martes, 16 de abril de 2002

Great Opportunity, IMF-ARGENTINA, reestructuring debt

Great Opportunity, IMF-ARGENTINA, restructuring debt

"There isn’t security on this earth, only opportunity",

Anonymous.








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In general, there is a valuable opportunity to make innovating changes when everything crumbles. How long does Argentina not generate its own ideas? - It asked Charles Sabel, professor of Columbia Law School. He and others American intellectuals consider that even in extreme weakness conditions, the indebted countries aren’t obliged accepting suggestions of the IMF. The idea to face another type of negotiation with the IMF become more and more strength, considering the endless number of armoring agreements, trade-off and big trade-off tried during the lasts years in Argentina, without reaching the objectives.

Richard Freeman of Harvard and Aruind Panagariya of Maryland also question and reconsider the meaning of the negotiating packages and conditions of IMF. In those academic scopes, debates are arising and they are still taking place in the IMF itself under strict privacy, as a result of the last crisis that took place in Argentina. If thus it weren’t truth, we would have to take with extreme carefulness that Haussmann thinks about its present people who direct the organization. (In his opinion, the IMF is handled by a group of incompetent (said by him in September of 2002 at the University Torcuato Di Tella-Bs.As.Argentina).

Some economy technicians already propose to restate mechanisms and condition applied to the countries with problems so far.

If the expected results were reach, these or other new mechanisms could become a platform for learning and they would replace the dock place and the ostracism which it submits the countries that incur financial difficulties.

Why couldn’t we Repeat Mistakes Without Terminal Risks?

One of the current problems of Argentina is that lost the international trust and consequently its capacity to attract capitals that were functional in the convertibility scheme. In order to surpass definitively the present Argentine crisis it needs to restructure its public debt. In this sense, the decision to present a innovative commercial proposal, instead of insufficient and habitual financial renegotiations, it will clearly be to take a step to the front.

Any agreement that doesn’t have support, from the point of view of which is future generation of currency flows will find difficulties to materialize it. It is not possible to convince the markets and international financial community that we will be able to generate resources, with a bit or high primary surplus. We needed a surplus that allows the state to serve the new interests from a new nominal debt. Just by the sixty percent of the GDP which we had in 2001 (in dollars) it would be ingenuous and insolent to repeat a fiscal effort proposal that will turn to us a "normal country".

This phrase that is repeated as if the Argentineans were alienated, is offensive and boring since it comes with "no proposal". An expenditure adjustment in the magnitude demanded by the orthodox economists that was surpassed by ex- Minister Cavallo with the rule of deficit zero, it was impossible to carry out and generated a level of social voltage of great dimensions. All we know how the government of the ex- President F. De La Rua ended, even though at the beginning he received an unprecedented aid from the Congress that granted “supreme powers”. He had first the favor from the all-political parties and against later, (even worst he wasn’t accompanied by allied party) the unions and the own colleagues as well. However the country said to him "not to the permanent fiscal adjustment by expenses side", before Cavallo, it was said to Lopez Murphy.

In just a short time Cavallo forgot that its designation took place as a result of an enormous social resistance to the proposal of his predecessor. In the epilogue Cavallo fell and it was the end of a government who only two years before had won by overwhelming majority.

The opposition and the own mass of voters, made totter the democratic system. The risks on the attempt were dangerous, highly dangerous and displeased. It is interesting to note that some economists still propose more of the same and in respect of the public debt, they want to reconstruct it assigning between (4/5 points of the GDP-fiscal surplus), with no new proposing. To try balancing the budget in that way would demand a change of political system with a previous social resistance that could give rise to a national chaos, with its consequent investment exodus, worse than one we come registering. Therefore, it is necessary to raise a proposal to wake up the confidence in the country. Something new.

Innovating talent and associative opportunities will attract the support of the creditors, the multilateral organisms of credit and the investments.

A Clear and practical Example

In these months, in spite of default of the Argentina debt, a group of local companies achieved to obtain financing in the middle of the hurricane. Those companies are dedicated to export and more accurate in agricultural food exports. This gives us a pattern of the interest from who decide to finance activities and what is their greater attractiveness. The most outstanding case is Aceitera Deheza (Oil Company) with headquarters in Cordoba Province, (it has a low profile like most of this type of national companies with great invoicing), dedicated to export oil and sunflower and soybean pellets. It almost commercializes the 90 percent of his production abroad. At only five months of the default This Company obtained a credit of 60 million dollars for pre-financing of exports from CFI - International Financial Corporation. The security to receive the line was the same pre-financing exports. Even though the worst moment in the relation with the IMF, it prevented that World Bank advanced in this type of financing since they were persuaded that the agricultural and food sector in Argentina has a huge potential.


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