- The Washington Times - Friday, January 24, 2003

RIO DE JANEIRO, Brazil, Jan. 24 (UPI) — The International Monetary Fund Friday officially approved a $6.78 billion debt rollover plan for Argentina.

The agreement comes after more than one year of tumultuous negotiations and was greeted by Argentina's president calling the IMF a "hostile" organization.

The eight-month program "is designed to provide transitional financial support through the period ending August 31," the IMF said in a statement.

The agreement also delays $4.4 billion in Argentina's loan payments due to the World Bank and the Inter-American Development Bank, or IDB.

Argentine President Eduardo Duhalde — whose sole mission since being appointed to office in January 2002 has been to reach an accord with the IMF — voiced frustration as the IMF announced the deal.

In an interview given to the La Nacion newspaper and published Friday, Duhalde said the IMF "didn't help us in the worst moment of our history and they have been hostile with us."

Duhalde flew for Davos, Switzerland, on Friday to attend the World Economic Forum, where international creditors might be less than ready to greet him with open arms and assurances of renewing credit lines.

In the La Nacion interview, Duhalde also lashed out at the developed world, mostly for what he called protectionist trade policies that lock many Latin American products out of the world's richest markets.

"It's good that we've reached an agreement and made it understood that it isn't by chance that seven Latin American nations today have the highest country risk (rating) in the world," Duhalde said.

"That has to do with the design of global policies, with the absurd protectionism of the (richest) countries on our products."

Duhalde said he plans to address this concern, along with general complaints about globalization, in Davos.

The transitional IMF program is comprised of a $2.98 billion stand-by credit arrangement — money that will simply cover some of Argentina's debt payments to the IMF through August.

The IMF also approved a one-year delay in some $3.8 billion also owed to the IMF through August.

The IMF indicated a longer-term loan deal will be coming for Argentina after the country's presidential elections and once a new government is installed in late May.

"These actions were taken with the expectation that the transitional stand-by credit will be succeeded by a multi-year IMF arrangement after the election in late April 2003 of a new government," the IMF stated.

The IMF has come under considerable criticism for what many see as its acquiescence to Argentina's refusal to make debt payments to multilateral lenders, such as the IDB and the World Bank.

In approving the debt rollover, the IMF underscored that the transitional package and the expected subsequent "medium-term program will anchor support by the international financial institutions for more comprehensive economic reforms in Argentina."

Critics of the IMF say these reforms should have been in place before any relief was given to Argentina, as the deal sets a precedent for other countries to try their hand at hard-balling the IMF into making precarious loans.

Since it became clear late last week that Argentina would receive the IMF transitional agreement, the country has made debt payments to both the World Bank and the IDB.

The IDB said it now plans to loan Argentina $1.5 billion for social programs, and will resume payments of a $694 million loan.

The World Bank also said that it will resume some $2 billion in loan disbursements to Argentina, as well as consider new loans for social projects.

It was in December 2001 that the IMF cut Argentina off from a $22 billion loan deal, citing non-compliance.

That sparked a series of events that culminated in bloody protests that forced former President Fernando de la Rua to resign. Four leaders rotated through power in a matter of two weeks before Duhalde was installed.

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