Kristalina Georgieva’s visit: a gesture for the Government and an opportunity for the head of the IMF

At that time, the head of the Fund was Christine Lagarde, the president was Mauricio Macri and there was a “crush” (“great crush”), as the PRO leader surprisingly expressed at a gala in New York, while the Frenchwoman smiled from the audience. But the panorama became complicated, Argentina became the Fund’s largest debtor and then the relationship with the IMF became strained to the maximum with Kirchnerism.

Now the organization commanded by Georgieva and the Argentina of President Javier Milei They returned to an unprecedented relationship of praise and mutual trust. In Washington they admire that the libertarian has fulfilled his promise to drastically cut the fiscal deficit, lower inflation, deregulate the economy and undertake structural reforms. There are some points of dispute, but the general direction is applauded.

In this framework, Georgieva’s journey is understood as a gesture for the Government, which has fulfilled a good part of what was promised, and to ratify the importance of Argentina for the organization.

The head of the IMF will meet on Monday with President Milei and his cabinet; with Luis Caputo and his economic team and also with the president of the Central Bank, Santiago Bausili. At noon he will hold a press conference at the Ministry of Economy and will also hold meetings with members of civil society. There will be a meeting with students and businessmen whose names were not revealed, but they would be representatives of the mining, energy, agricultural, industrial, commercial and pharmacological sectors.

On Tuesday he will travel with Milei to Vaca Muerta, where he will meet with workers and businessmen in the energy sector and then leave for Uruguay.

Experts consulted by Clarín sThey point out that, beyond a gesture to the Government, the visit is also an opportunity for Milei and the head of the Fund to show “a concrete reality, not just on paper,” what Vaca Muerta is like today. The trip south could also serve Georgieva to mitigate criticism to the “excessive” exposure of the IMF with Argentina and promote a return to the capital market, they say.

Hector Torres, former Argentine representative at the IMF, told this newspaper that “the visits of the managing directors are infrequent. Their objective, without a doubt, is to provide a clear signal of support for the Government and showing confidence in its possibilities of being able to access the market again private capital which is, always, the ultimate objective of all programs.”

“His visit to Vaca Muerta seeks to highlight that Argentina has a growing capacity to generate foreign currency that will allow it to regain access to the markets and, therefore, stop depending on IMF money. The trip to the south also “It could serve Georgieva to mitigate criticism of the IMF’s “excessive” exposure to Argentina.”he states.

Torres explains that Argentina has 30% of the IMF’s credit exposure and that the country has important maturities starting next year. “Naturally, the Fund is very interested in Argentina regaining access to the capital market. Georgieva’s visit seeks precisely to promote that, for Argentina to regain access to the capital market in order to reduce its exposure,” he points out.

Beyond agreeing with the Argentine direction, among some member countries of the organization there is a certain jealousy for supposedly condescending treatment that the Fund authorities have given to the country, which would be expressed through many waivers (sorry) for failure to meet goals, especially due to the Government’s initial resistance to buying dollars to accumulate reserves.

The IMF persistently insisted on that point and finally the Government reversed its reserve policy. Now the organization is putting pressure on the country to return to the capital market, but in the Economy they are in no hurry. “Going out to the markets is an option, not an objective,” they point out.

Torres believes that Georgieva could talk to the authorities about the decrease in tax collection, since it is one of the alerts that go off when it comes to meeting the program’s objectives. “The drop in revenue could make it difficult to meet the fiscal goal, but if a waiver surely there would be no problems in getting it.”

To Claudio Loser, former Western Hemisphere director of the Fund, Georgieva’s trip “is about public relations and not negotiation. It must be understood as a visit to a country that is the main debtor, but that is applying a program very consistent with the IMF.“he said to Clarion.

He highlighted that the technical staff was recently visiting for the recent review of the program. “I suppose that, if there are loose ends, she will support with conversations with the president. I think the trip is more for Argentine internal consumption. The visit to Vaca Muerta reinforces this idea: Milei wants to show in person and Georgieva too, that they not only focus on papers and numbers but on concrete reality.”

In the midst of a turbulent world, marked by the US war with Iran, the rise in oil prices and the advance of Artificial Intelligence, Georgieva’s visit is also an opportunity for the head of the Fund to debate on the ground – with officials, businessmen and social actors – Argentine potential and the opportunities that open up in the face of global challenges.