Doubling down on a failed approach: Argentina’s IMF programme, one year later

One year since its start, it has become clear that the IMF programme in Argentina has failed to deliver on its promises to fix the economy while protecting the most vulnerable. Despite the worsening economy, large human costs, and a significant downwards adjustment of growth projections, the IMF is doubling down on its austerity approach and requiring additional spending cuts to meet budget targets.

“Argentina has become yet another example of an IMF programme that underestimates the hurtful effects of austerity, and of the damage these policies cause to both the economy and working people,” commented ITUC General Secretary Sharan Burrow.

A detailed analysis of the programme documents the evolution of the economic projections over the last year and shows the extent to which the initial agreement failed to predict the negative consequences of its policies. Argentina’s economy is still in recession, inflation has not been subdued, and the country’s debt burden has significantly increased.

Poverty has skyrocketed over the past year, with the poverty rate increasing from 27.3 per cent prior to the agreement, to 32 per cent at the end of 2018. While the agreement did contain a binding spending floor on certain social assistance programmes, the floor was set at a level that is inadequate to truly protect the most vulnerable amid the economic hardship. Despite this floor, overall social protection spending has been reduced significantly.

“IMF rhetoric on the importance of social spending and the Sustainable Development Goals should be meaningfully translated into the implementation of loan programmes, which at present continue to promote the same harmful austerity policies of the past,” said Sharan Burrow.

Doubling Down on a Failed Approach: Argentina’s IMF Programme, One Year Later