Silvina Batakis: IMF betting on Milei because his failure would also be theirs

Argentina’s recent return to the International Monetary Fund (IMF) shows that Javier Milei’s economic plan has failed. A classic austerity plan lacking investments or a productive programme, it is a dead end for the nation. Without genuine dollars or a productive matrix to supply them, Argentina’s economic failure will be repeated like the myth of Sisyphus, doomed to push a rock up a mountain, only to see it rolling down again before reaching the summit. Sooner or later the death rattle will arrive very painfully, anticipating this economy of Milei falling into a coma which will be suffered by millions of Argentines for generations.

The IMF authorities and their technicians are aware of that and the domino effect created by “The Building,” as they call it. The unfortunate statements of IMF Managing Director Kristalina Georgieva, making an express call to vote for Milei, are a noisy request to save herself. Her statements, uncommonly serious and warranting repudiation, signify a clear violation of our political sovereignty, weakening our democracy.
We Argentines must all be aware of what has happened. This is a “political loan,” if not to say a campaign contribution, as in 2018. And just as with Mauricio Macri, the IMF needs this government to do well in order to be able to collect its biggest loan ever, granted even with the disagreement of some of its members considering it “unpayable.”

A commitment on this scale – a total package of US$65 billion – can only be repaid via brutal austerity in wages, pensions, healthcare, education, science, technology and public works: the definite continuity of this model of exclusion and financial speculation. Since 2018, we have paid US$12 billion in interest alone and up to 2030, we will pay US$18 billion more. An enormous sum in dollars which will not be invested into Argentina generating that productive matrix creating jobs and exports which work out to the progress of Argentine families. For the IMF, Argentina is a business which cannot fail.

Meanwhile, the government celebrates the reinforcement of its reserves and its improved chances for the October elections. The problem is the medium and long term, the structure of repayments we face but, above all, the loss of sovereignty implied. Once you go with the IMF, it’s the IMF which sets the rules.

That makes our situation of vulnerability more dramatic. The government lied to people when it assured that fiscal austerity would avoid both inflation and debt. It is plain to see that neither of these two things has occurred – we have fallen once again into the claws of the IMF and inflation is bouncing back.

Nor will the crisis be only debt or only economic. The sustainability of the lives of all Argentines will be in crisis. Mitigating that tragedy is only possible by planning the Argentina we want: with a diversified, complex and eminently federal matrix which creates new jobs competitive worldwide with state ceasing to be 2.0 to become an innovative and sophisticated state for its complex and multifaceted people. Without at least these elements, achieved through a strategy of dialogue and consensus, it will be very difficult for Argentine families to make their dreams of progress and upward mobility come true.

* Silvina Batakis is housing minister in the Buenos Aires Province government. She served as national economy minister from July 2022 to August 12022.