Argentina: The IMF, a Euphemism for Politics

By Atilio Boron on July 22, 2023

Atilio Boron, photo: Bill Hackwell

In recent times, any analysis on Argentine politics or the Argentine economy does not fail to mention the IMF as one of the fundamental, if not decisive, actors of national events. And its influence on the Government’s decision-making process, on what it does or does not do, more than deserves this recognition.

Given the above, one might ask: What is the IMF? The conventional answer, to which both the hegemonic press and, in many cases, the alternative media resort, is that the IMF is an international technical organization whose mission is to preserve the monetary stability of the world economy. It is often mentioned that this institution arose from the famous Bretton-Woods agreements, a meeting of the delegates of the forty-four Allied countries during World War II, held in that New Hampshire locality between July 1 and 22, 1944, with the purpose of rebuilding the international monetary system destroyed by World War II. It began to operate on December 27, 1945 with 29 members, under the leadership of the United States and accompanied, always as obedient partners, by the United Kingdom and France. The Axis powers, defeated in the war, would join later. Italy, “threatened” by a probable electoral triumph of the communists in the 1948 elections, joined the organization early, in 1947; Germany and Japan would not join until 1952. The Soviet Union, aware of the geopolitical nature of the new institution, never did so. It would be its successor state, the Russian Federation, who would do so in 1992. Argentina would only join in 1956, after the coup d’état that overthrew the government of Juan D. Perón in September 1955. Perón always distrusted the intentions of the White House, and a report by Antonio Cafiero in 1949, written when he was a young financial attaché at the Argentine embassy in Washington, reinforced the president’s misgivings with very convincing arguments. This is stated in the text by Mario Rapaport, entitled ” The IMF in its beginnings as seen by Antonio Cafiero: an unpublished document of 1949”and published by Página/12 in October 2014.

From the above it is clear that the IMF is something much more complex than an innocent and beatific international organization. The composition of its board of directors is overwhelmingly eloquent. The United States is undoubtedly in charge, holding 16.50% of the votes on the board, followed by China, with just 6.04%, Germany with 5.31%, and France and the United Kingdom with 4.03%. Two very concrete corollaries emerge from this: first, given that 85% of the Board’s votes are required to make the most significant decisions (not merely routine ones), the United States exercises de facto dictatorial power over what the IMF may or may not decide, reflecting the international correlation of forces existing in the aftermath of World War II. Secondly, note the abysmal disproportion between the gravity of the world’s different economies and their representation in the Fund’s governing body. According to this body, the United States is, measured in terms of US dollars of the year 2021, the largest economy in the world, with 24,796,076 million dollars, followed by China, with 18,463,130 million of the same currency. However, if the measurement is made using another criterion, purchasing power parity, in 2022 the U.S. economy would represent 15.57% of global GDP and China 18.48%. In any case, the Asian giant’s voting power in the IMF is a paltry 6.04%, which speaks of a significant underestimation of its role in the world economy. Only the United States can change this situation, but so far it has stubbornly refused to reconcile China’s gravitas in the world economy with “voting power” on the IMF board.

With the above considerations in mind, it is easy to understand why no less a conservative theorist than Zbigniew Brzezinski warned in one of his most famous books, The Great World Chessboard, that the IMF, as well as the World Bank, should be seen as extensions of the Treasury Department and guardians of the global interests of the United States. Therefore, anyone wishing to understand the complex meanderings of Argentina’s politics and economy should begin by fighting a frontal battle against the use of euphemisms that conceal a crucial fact: that the IMF is not an “international organization” but an unofficial organ of the U.S. Government; and that negotiating with that institution is, in reality, doing so with the White House; and that the policies that the supposed “international organization” adopts in relation to Argentina (or any other country) will always have as an ordering criterion to strengthen the global primacy of the United States, even at the cost of provoking the debacle of other nations. The ruler or politician who does not understand something as elementary as this is a sleepwalker who will make his own country pay an exorbitant price. Or, in the worst case scenario, he could be an accomplice of U.S. imperialism who seeks to conceal his actions by taking refuge in the supposed “technical”, international or intergovernmental character of the IMF.

Source: ACCION, translation Resumen Latinoamericano – English