The International Monetary Fund and Latin America

The International Monetary Fund and Latin America: The Argentine Puzzle in Context

Copyright Date: 2013
Published by: Temple University Press
Pages: 268
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  • Book Info
    The International Monetary Fund and Latin America
    Book Description:

    The International Monetary Fund (IMF) has played a critical role in the global economy since the postwar era. But, claims Claudia Kedar, behind the strictly economic aspects of the IMF's intervention, there are influential interactions between IMF technocrats and local economists-even when countries are not borrowing money.

    InThe International Monetary Fund and Latin America, Kedar seeks to expose the motivations and constraints of the operations of both the IMF and borrowers. With access to never-before-seen archive materials, Kedar reveals both the routine and behind-the-scenes practices that have depicted International Monetary Fund-Latin American relations in general and the asymmetrical IMF-Argentina relations in particular.

    Kedar also analyzes the "routine of dependency" that characterizes IMF-borrower relations with several Latin American countries such as Chile, Peru, and Brazil.The International Monetary Fund and Latin Americashows how debtor countries have adopted IMF's policies during past decades and why Latin American leaders today largely refrain from knocking at the IMF's doors again.

    eISBN: 978-1-4399-0911-9
    Subjects: Political Science, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-xii)
  4. Introduction
    (pp. 1-10)

    The Argentine crisis of 2001 inevitably raises the question of how a country that until the 1930s was expected to join the list of the richest countries in the world ended up suffering such economic deterioration. Although Argentina may have made its own economic mistakes over the years, we must also look at the international economy in general, and at the International Monetary Fund (IMF), in particular to understand what went wrong. In effect, the crisis in 2001 took place as an already heavily indebted Argentina was following the IMF’s advice to the letter. But Argentina was not the only...

  5. 1 Multilateralism from the Margins: Latin America and the Founding of the IMF, 1942–1945
    (pp. 11-31)

    In July 1944, as the battles of World War II continued to rage, representatives of forty-five countries met in Bretton Woods, New Hampshire, to forge a permanent mechanism of economic coordination among countries and avert a new crisis in the postwar era. The conference, almost exclusively a U.S. initiative and supported by a declining Britain, established the foundations for two international organizations: the IMF and the International Bank for Reconstruction and Development, better known as the World Bank. Although the United States invited all Latin American countries except Argentina to participate in the Bretton Woods Conference, the role they played...

  6. 2 It Takes Three to Tango: Argentina, the Bretton Woods Institutions, and the United States, 1946–1956
    (pp. 32-54)

    Juan Domingo Perón, the IMF, and the World Bank: Judging by the historiography that portrays Perón as a staunch anti-imperialist, and by statements such as this one, such a relationship would seem impossible. But was it really so? As we will see, Peronist Argentina’s entry into the Bretton Woods institutions was in fact desired not only by the leaders of the IMF and the World Bank but also by Perón himself. From 1946 to 1955, the years of his administration, Perón made significant and repeated attempts to reach an agreement by which Argentina could join both institutions. (Nations cannot join...

  7. 3 Dependency in the Making: The First Loan Agreement and the Consolidation of the Formal Relationship with the IMF, 1957–1961
    (pp. 55-87)

    Argentina joined the Bretton Woods institutions twelve years later than the other countries in the region and two years after the first IMF loan to a Latin American member state (Peru) was approved.¹ Yet the distance between Argentina’s incorporation into both institutions in 1956 and the initiation of activities with the IMF was very short.

    The formal relationship between the IMF and Argentina began to develop during the Liberating Revolution, the military uprising that ended Perón’s regime in September 1955 and stayed in power for three years. The cautious steps taken by President Pedro Aramburu’s government (November 1955–April 1958)...

  8. 4 Fluctuations in the Routine of Dependency: Argentine–IMF Relations in a Decade of Political Instability, 1962–1972
    (pp. 88-118)

    Stand-by arrangements, as shown in Chapter 3, serve as the platform for establishing a solid joint working routine for the IMF and its borrowers. The fact that the majority of borrowers sign a series of consecutive SBAs (e.g., Chile has signed ten consecutive agreements; Uruguay, thirteen; and Haiti, twenty-one) may create the impression that this routine can only deepen and become increasingly institutionalized.¹ That impression, however, is only partially accurate. As explained below, the routine of dependency is by no means an unalterable or deterministic mechanism.

    Argentina provides a privileged prism through which to examine how national political instability is...

  9. 5 All Regimes Are Legitimate: The IMF’s Relations with Democracies and Dictatorships, 1973–1982
    (pp. 119-150)

    The joint working routine between Argentina and the IMF has had many ups and downs. The fluctuations in the relationship in general, and the occasional episodes of detachment in particular, were most often initiated by Argentina. Contrary to the IMF’s enduring image as an inflexible body, an examination of the intimate aspects of the relations between the parties suggests that the IMF has been ready and willing to compromise to retain its influence in Argentina’s economy. This has held true not only for governments that have been sympathetic to the Fund, but also for administrations that have opposed the routine...

  10. 6 Routine of Dependency or Routine of Detachment? Looking for a New Model of Relations with the IMF
    (pp. 151-183)

    The 1980s are usually considered Latin America’s “lost decade.” This characterization refers, more than anything else, to the state of the economy. In effect, at the same time that the region experienced the worst economic crisis since the Great Depression, it underwent a profound process of political transformation that resulted in the largest series of free elections in its history until then. Moreover, those nations that returned to democracy in the 1980s and 1990s have remained democratic to the present day.

    This chapter thus begins with this lost decade, paying special attention to several heterodox experiments undertaken in the mid-1980s...

  11. Conclusions
    (pp. 184-190)

    For millions of Latin American citizens, as well as for a legion of scholars and politicians in the region and around the world, IMF–Latin American relations are synonymous with intrusive conditional loan agreements, skyrocketing debt, and imposed economic liberalization. This is perhaps why academic research has focused almost exclusively on the economic aspects of these relations. In contrast with this traditional approach, this book focuses on the unexplored, “intimate” aspects of the relationship between the IMF and its borrowers. In doing so, it reveals what I term the “routine of dependency”—a dependency that goes beyond the size of...

  12. Notes
    (pp. 191-232)
  13. References
    (pp. 233-244)
  14. Index
    (pp. 245-251)
  15. Back Matter
    (pp. 252-252)