Hard feelings?

The Argentines are none-too-happy about how IMF support eroded their country.

At least that's how they see it. Under President Menem in the 1990s, Argentina pursued an open economic policy that favored foreign direct investment. As it turned out, many businesses were bought up, and so the Argentines feel that they were forced to sell out on their own assets to protect the IMF loans, which eventually they ended up defaulting on anyway.

However, I think economists see the situation somewhat differently: It was the unsustainable currency-exchange board that locked the Arg. Peso 1:1 with the US$ that ran the country into ruin, because businesses' costs weren't equal to actual value. Moreover, the corruption surrounding the abandonment of the fixed rate angered many, but was no more than emblematic of the great corruption under Menem's economic regime. But when everyday Argentines saw their assets depreciate by 70% in 24 hours, saw their bank accounts frozen so the government could appropriate the money in a last-ditch effort to service debts, saw the political leaders and their cronies flee with immense wealth, and saw their once wealthy country decimated, factories shut, the public sector's workers unpaid for months, and no politicians willing to step up to the challenge, that they came to associate all these policies - whether good or bad, actually imposed by the IMF or not - with that organization and rejected it.

Now I can see both sides: On the one hand, I understand the value of the IMF as a last-resort lender to countries at risk for debt default. I also understand criticism of the IMF that says in the case of Argentina, it should have force the Menem government to give up the fixed exchange rate, as it simply wasn't viable in the long run. What's the point of structural adjustment if you aren't willing to make the dumbest of all ideas part of history?

Well,regardless of what I think, those former middle-class teachers and professionals now living on the street in Argentina have little love for the IMF. It has some of the best educated cab drivers in the world - often university educated, articulate, travelled and intelligent. But because all of this, popular culture in Argentina remains angry at the IMF. Just check out the above artwork, displayed at Mendoza's municipal museum for modern art, and entitled The Queen of the IMF.