The success of President Javier Milei’s reforms in Argentina will depend on popular support, says the head of the International Monetary Fund.
With negotiations in Washington ongoing between Argentina and the United States over future financial assistance, Kristalina Georgieva said Wednesday that Argentina is an example of “a very dramatic adjustment programme.”
But she warned that Milei’s reform push would be sidetracked if he did not persuade voters of the necessity of his radical austerity agenda.
“Argentina is taking a very dramatic adjustment. Success is going to be based on carrying people with you,” said Georgieva at a panel event organised by the Milken Institute.
“The first step is the most important and the most difficult one: carrying people with you. [To] Get people to understand that a ballooning deficit and more public spending is not necessarily good for them. We still haven’t worked out how to bring people with us,” said the IMF managing director.
“In Central and Eastern Europe, we’ve had examples of brave leaders who have done very difficult things, they cut pensions and salaries by 40 or 50 percent and were re-elected. Why? Because they managed to get the people on board,” said the Bulgarian economist.
The IMF, which granted Milei’s government a US$20-billion credit line in Milei’s first year in office, said she welcomed the ongoing negotiations between officials from the Argentine government and the US Treasury Department over additional assistance.
Argentina’s Economy Minister Luis Caputo was received by US Treasury Secretary Scott Bessent this week. A US$20-billion currency swap is the subject of discussions, as well as support measures.
Less than a week out from key IMF meetings, Georgieva headed a discussion about the health of the global economy, which she argued is evolving “better” than expected, “but worse than what we need.”
Upon being asked about the performance of Latin America, she declared, “it is a part of the global economy that, in general, has been performing under its potential for a long enough time. And I am always hoping that there is a spark that lights.”
The region must “take advantage of the reorganisation of the global supply chains in order to see what constitutes self-inflicted damage. And there’s plenty of it in enough countries,” she indicated.
"We can no longer tolerate" what she called "slowness" in "understanding what is coming." She urged to "put into action that incredible dynamism you have in your economic activities.”
“Of course there are great things in Latin America, which has demonstrated resilience in this world subjected to shock after shock,” she asserted.
“I believe that you all can lift your heads and tell yourselves: we can aspire for more.”
– TIMES/AFP/NA
Comments