The current global economic order was structured after the end of World War II. At that time, important international organizations were created that last until today.. It is important to understand their role because they end up impacting countries. Among the leading organizations, the International Monetary Fund (IMF) is one of the most impactful in Latin America.
The role of the IMF
The International Monetary Fund (IMF) is an international organization created in 1944, with the aim of promoting international monetary cooperation, facilitate international trade, promote exchange rate stability and help member countries in situations of economic crisis.
The main role of the IMF is to provide loans and technical assistance to help member countries overcome economic crises., such as currency or balance-of-payments crises. To receive IMF assistance, a country needs to agree to implement economic and fiscal policies recommended by the IMF, aiming to restore economic stability and avoid future crises.
Besides that, the IMF monitors the global economy and provides economic advice and analysis to its member countries, with the aim of promoting healthy and sustainable economic policies. It also acts as a forum for international monetary cooperation and promotes transparency and integrity in the global financial system..
The IMF and Latin America
The IMF has played an important role in Latin America over the last few decades.. The organization has been a frequent source of loans to countries in the region that have faced economic difficulties., such as currency and balance-of-payments crises.
IMF loans are often accompanied by conditions and economic policies recommended by the organization, that aim to help countries overcome their difficulties and achieve economic and fiscal stability. While these conditions can be painful for countries that accept them, they can help restore investor confidence, reduce interest rates and encourage economic growth.
The IMF also plays an important role in promoting cooperation and dialogue among Latin American countries.. The organization holds regular consultations with governments and business leaders in the region, providing economic analysis and policy recommendations aimed at improving economic stability and promoting growth.
However, IMF participation in the region has not always been well received. In so many cases, the terms of the loans were considered to be excessively strict, and IMF-recommended policies have been criticized for deepening social inequality and harming the most vulnerable. As a result, the organization has faced significant criticism across Latin America.
O FMI, the ukraine, Argentina and the world
Regardless of the position we may adopt in relation to the war between Russia and Ukraine or the policies adopted by Argentine governments that have led the country to the current economic and social crisis, it is interesting to observe the different behavior that the IMF has in relation to the two countries.
The relationship between the IMF and Ukraine has been complex and tumultuous over the past few years.. Ukraine has become one of the biggest beneficiaries of IMF loans, receiving various loan programs over the last few years.
In 2014, Ukraine faced an economic and political crisis that led to the fall of President Viktor Yanukovych's government. As part of efforts to stabilize the Ukrainian economy, the IMF approved a loan package of US$ 17 billion for Ukraine in 2014.
However, the implementation of these lending programs has been difficult and often interrupted by political and economic tensions. In 2015, the IMF temporarily suspended Ukraine's lending program after the Ukrainian government refused to implement fiscal reforms demanded by the IMF.
In 2019, Ukraine received another loan program of US$ 3,9 IMF billion, which aimed to help stabilize the Ukrainian economy and support economic reforms. However, the COVID-19 pandemic and the subsequent economic crisis led the IMF to postpone the payment of part of these loans.
Besides that, the relationship between the IMF and Ukraine has been affected by political tensions between Ukraine and Russia. The IMF has been pressuring Ukraine to implement economic reforms and fight corruption, but these efforts have been undermined by political and economic conflicts with Russia.
New loans were recently approved for the country with the approval of changes in its rules, allowing lending to countries with “exceptional high uncertainty” (Ukraine to clinch first IMF loan to nation at war – https://www.bbc.com/news/business-65034765). Now for Argentina, the treatment is not the same.
This difference in treatment shows the need for international economic organizations that are more open to global participation., with a more democratic system of governance.
