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Why the Popular Movement in Argentina Against the Debt and the IMF is Important
by Maria Elena Saludas
8 April 2022

The Argentine government and International Monetary Fund (IMF) negotiators reached an agreement on 3 March to refinance some 45 billion dollars in debt. An agreement that was ratified by a majority of Members of Parliament (MPs) on the night of Thursday 10 to Friday 11 March 2022 and will most probably be ratified by the Senate before 19 March. The four radical left MPs grouped in the FIT-U (Left and Workers’ Front - Unity) voted against the ratification, as did 28 MPs in the Presidential majority who have openly criticized the Policies of President Alberto Fernandez and his Minister of the Economy Martin Guzman.

This agreement comes against the backdrop of years of global recession and crises exacerbated by the SARS-COVID 19 virus, and in the context of a worrying war. These are times when social and material inequalities across the globe are ever greater, accentuating the gap in material living conditions between the northern and southern populations. Indeed, the health crisis exposes the inequality in access to health care and full immunization schedules in each country. Spotlighting another great failure of society: its incapacity to guarantee global health rights, while at the same time hunger and poverty increase in the greater part of the population.

In this context, the “financial vultures” who are tightening the noose of indebtedness in order to gain still greater advantages at a historic moment when humanity is suffering sanitary, humanitarian and ecological disasters, must be denounced. As Fidel Castro said: “Let us pay the ecological debt, and not the foreign debt. Let hunger disappear, and not mankind.”.

“Let us pay the ecological debt, and not the foreign debt. Let hunger disappear, and not mankind.” – Fidel Castro

Faced with this scenario, the popular classes in Argentina must mobilize urgently to demand the cessation of payments of foreign debt. The category of docile payer, which the Party of the Debt has always assumed, should not become inherent, debts contracted by previous governments are illegitimate, illegal and fraudulent. The people should not have to support the burden of paying what they do not owe. We cannot mortgage the Argentine peoples’ future. We cannot allow a new financial extortion to be established.

It is fundamental, therefore, to create a great popular campaign to raise debate and raise awareness, advance the proposals to suspend debt payments and start an immediate popular audit. Furthermore, it is necessary to denounce the nefarious role that the International Financial Institutions (IMF, WB, WTO, IDB...) and their satellites: G7, G20, Paris Club, among others, have been playing for nearly 80 years. How can anyone imagine that they have suddenly become “good guys”?

The struggle against public debt in the context of a brief overview of the debt system in Argentina

This bloodletting, which continues to this day, began in 1976 when the civic-military-religious dictatorship usurped government, the foreign debt was, at that time, about $8 billion. just 7 years later, when democracy returned, the debt had grown to $45 billion. This debt was contracted to finance capital flight and to pay for the repression of the workers’ movement and social struggles. Also, during this period, private debts were nationalised.

By the 1990s total neoliberal hegemony had been imposed, the peso had become convertible (1 peso = 1 dollar), privatisations had taken place: the debt was being paid, IMF and World Bank (WB) conditionalities were imposed, with the well-known consequences of structural unemployment, marginalization, impoverishment, disarticulation of the productive apparatus and the de-localisation of the economy. During this period, the foreign debt reached $147 billion. The Brady Plan (1993/94) instigated the use of securities to finance fiscal deficits, thus changing the type of creditor from banks to bondholders (investment funds, pension funds, etc.).

Poverty in Argentina

In 2001 the convertibility exploded, recession and deep economic crisis hit, causing the De la Rua government (Alianza) to fall. The provisional government that followed declared non-payment of the debt in private hands (54% of the total). The debt to the International Financial Institutions (WB, IMF and IDB) was not included. They continued rigorously to receive payments up to the renegotiation and bond swap in 2005.

Repression in Argentina (2001 crisis)

This unilateral suspension of payments lasted 38 months, it was one of the factors that enabled the State to emerge from the financial asphyxia imposed by the debt service and to be in a better position to face the economic and social crises. It is important to clarify that this decision, taken unilaterally, was not intended to challenge the legality and legitimacy of the debt. The grounds for non-payment was the impossibility in the midst of one of the worst crises in the country’s history.

Campaigns for the non-payment of the debt

Alejandro Olmos investigated the process that Argentine indebtedness had followed since 1976 and the responsibility of the first Minister of Economy of the civil-military-religious dictatorship, José Alfredo Martínez de Hoz, as well as all other officials involved up to 1983

The important contribution to the audit process of the well-known “Olmos judicial inquiry” was not taken into account on this occasion. Alejandro Olmos investigated the process that Argentine indebtedness had followed since 1976 and the responsibility of the first Minister of Economy of the civil-military-religious dictatorship, José Alfredo Martínez de Hoz, as well as all other officials involved up to 1983. The inquiry determined, among other things, that: the foreign debt had no legal, administrative or financial justification; the procedures used constituted true illicit acts; public companies had been forced into debt; fraudulent foreign debt of private companies was assumed by the State in 1982. The inquiry pointed out that 477 illegal acts had been committed. In July 2000, a sentence was proclaimed. Judge Ballestero decided not to follow up on the proceedings because the only defendant was acquitted due to the statute of limitations, but he did send a copy of the resolution to the National Congress so that it could adopt the measures it considered appropriate in the negotiation of the debt “which has grossly increased since 1976”... Since 2000, this sentence has been laying in Parliament together with the expert opinions added to the file that demonstrate the illegitimacy of most of Argentina’s foreign debt.

The legacy of Alejandro Olmos

In 2003, Néstor Kirchner became President but did not make a real break with the Perpetual Indebtedness System and, from the outset, set the goal of regularizing the debt declared in default, “re-establishing investor confidence” in order to be able to seek funds on the international capital markets again.

Note that the major tendencies in Argentina’s political circles advocate subordinate insertion into the capitalist system and its transnational hegemony.

The 2005 swap and access to the markets in 2010 made it possible to exchange debt for bonds tied to inflation and growth. A large part of the external debt ended up being transformed, through securitization, into domestic public debt. Although 7% of creditors- the so-called “holdouts” or “vulture funds” – refused to accept the marked down offer made by the Argentine administration.

The fight against vulture funds

Another moment in the history of Kirchnerism’s debt repayments was in 2006, when a $9.8 billion lump sum was paid to the IMF, giving the excuse that this was to “buy sovereignty”.

The IMF is an organisation that was created in the Bretton Woods agreements in 1944. It became an instrument of the victorious imperialisms, after WW2, lead by the US, to dominate the post-war world

The IMF is an organization that was created in the Bretton Woods agreements in 1944. It became an instrument of the victorious imperialisms, after WW2, lead by the US, to dominate the post-war world. The aim was to promote and impose liberal globalization and the use of the dollar as the currency of international trade and finance. The IMF’s role has always been to guarantee and regulate global finance. Moreover, with the push for neoliberal globalization as from the late 1970s and especially in the 1990s, the IMF made loans to countries in need of “aid” on the condition that they apply the economic prescriptions of neoliberalism. The IMF is not simply a bank, it is much more than that. It seeks on the one hand to safeguard Capital when crises arise and on the other to impose neoliberal policies. Paying the IMF is not an act of sovereignty. On the contrary, it is an act of capitulation.

No to the IMF repayment

In addition to this, another $10 billion were negotiated with the Paris Club in 2014, during the Cristina Fernández administration and under the Economy Minister and now governor of the Province of Buenos Aires, Axel Kicillof.

In short, during Kirchnerism (2003-2015) Argentina’s nominal debt continued to increase: from around $180 billion to more than $240 billion. However, its real weight on the economy was drastically reduced, allowing claims that the country had been “desindebted”.

This claim was based on two points: first, the debt-to-GDP ratio which fell sharply to 52%. Also, the proportion of dollar-denominated debt shrank compared to local currency debt (in 2001 only 3% of debt was in pesos, by 2015 it represented almost a third of the total).

Macri and the agreement with the vulture funds

When Mauricio Macri took office he immediately agreed to pay the “holdouts” in full, reopening Argentina’s access to credit.

Argentina’s debt skyrocketed again. By the end of his term, it exceeded $320 billion. It reached over 90% of GDP in 2019.

Negotiations with the IMF

At that time, Argentina had a curious position: it was the country that topped the world’s ranking for debt security issues in international markets.

This is what led Macri’s government to seek help from the “Fund”, receiving the largest loan in the history of the IMF. The agreement established loans of up to $56.3 billion, of which $44.2 billion were eventually disbursed.

In such a highly volatile climate, and within the framework of a policy of exchange rate and financial account deregulation, this led to the flight of resident capital and the outflow of speculative foreign capital.

And the 100-year bond? The cession of legal sovereignty in this bond, as in all those issued by the Macri government, takes on greater relevance given that it has been agreed for 100 years at a very high rate, with an interest coupon payable half-yearly at 7.125 per cent per annum.

When Alberto Fernández / CFK took office, according to Finance Secretariat data the gross internal and external public debt was $324.5 billion, divided by the country’s 44.5 million inhabitants, each person owes around $7,300. In this period, the “pay as you negotiate” criterion is met: negotiations with foreign bondholders continue until the final restructuring agreement is reached. The legal arguments that can support a unilateral decision to suspend payments in the face of a health crisis are not taken advantage of. They are: state of necessity, a notion of law used by international courts; fundamental change of circumstances (a very serious epidemic); Force Majeure.

Therefore, the debt contracted with the IMF by Mauricio Macri falls into the category of “odious debt”. Alexander Sack, in 1927, stated that in order to determine that a debt is odious, the nature of the regime is irrelevant, that is to say, it makes no difference whether it is a dictatorship or a democracy, since what is truly decisive is whether or not the debt has served the people.


Finally, what needs to be reflected on, in our country and region, is that the problem of the debt and the model organized around it, which is not only the issue of perpetual debt repayment but also of the productive and financial restructuring that Argentina has experienced throughout this time. This is what needs to be discussed above all, and it involves both the problems of the debt and of the agro-export-extractive production model and its main “agents”: the transnational corporations.

In short, the forced payment of the fraudulent debt means the intensification of plunder, pollution of our territories, it endangers agricultural resources, causes hunger and inequality. The foreign currency for the payment of a nefarious debt is obtained at the cost of a ruthless plundering of Nature. This model feeds on pollution and exploitation.

It is necessary to organize, mobilise and support popular initiatives such as The Autoconvocatoria por la Suspension de Pagos e Investigación de la Deuda (Self-Convocation for the Suspension of Payments and Investigation of the Debt). This movement is the result of an open articulation of organizations, social movements, assemblies and popular parties, trade unions, social and political leaders and human rights organizations that, since January 2020, have been promoting a broad, active, independent, horizontal and inclusive campaign against the injustice of the Public Debt and the policies promoted by the International Monetary Fund. The People’s Trial of the Debt and the IMF was of great importance and provided essential testimonies and arguments from dozens of popular leaders and personalities representative of the people’s resistance.

The powerful plea argued that “public indebtedness was identified as an economic crime against humanity and the IMF is the principally incriminated”. The prosecution defined economic crime against humanity as including all, some or one of the following practices: causing serious to very serious injuries and/or death; damaging habitats, common goods and the environment; offending dignity and honour; restricting freedoms, endangering public safety and public health; disrupting public administration; corrupting public officials by bribery and/or influence peddling; embezzlement of public funds; negotiations incompatible with the exercise of public functions; illegal exactions; illicit enrichment; prevarication; denial and delay of justice; concealment and laundering of assets of criminal origin; fraud in commerce or industry. With regard to crimes against life, the expression “whoever kills” used by the Criminal Code is interchangeable with the expression “causing death” in the Rome Statute. Thus, on the crime of genocide, it states “including by the deliberate infliction of conditions of life calculated to bring about the destruction of part of a population” - Art. 7, 1(b) - depriving populations of food or medicine enters into this definition. The definition also includes the imposition of such conditions of subjection to one or more persons to humiliating or degrading treatment - in accordance with the specific convention on the matter and other International Conventions such as those agreed on the elimination of all forms of racial discrimination, on the elimination of all forms of discrimination against women, on the rights of children, and on the crimes of human trafficking in our Criminal Code. They “emphasized that the only way to make the crime of public indebtedness tie-up with the elements of the offense is to demonstrate the external interference by the international financial institution in the affairs of the State”. In this they argued that “We endorse the words of the National Prosecutor Federico Delgado in his indictment dated 17/03/2016, stating that ’According to the court cases, since Martínez de Hoz, the Brady Plan or the Mega-canje, the debt is taken under the pretext of addressing economic development. But is then used for other purposes such as to finance capital flight and in the midst of this shift, there have always been serious crimes (...)’. Yes, there are a number of crimes by the same offenders and a number of offenders for the same crimes - to use the distinction made by the Argentine Criminal Code”.

Today, we continue the movement throughout the country, alongside many organizations, trade unions, social movements, human rights organizations, political parties and assemblies, to expand, to debate, raise awareness and build popular power for the SUSPENSION OF PAYMENTS AND INVESTIGATION OF THE ILLEGITIMATE, ILLEGAL AND ODIOUS DEBT!

Protest in the city of Rosario (Argentina) against the agreement with the IMF

Translated by Mike Krolikowski

Maria Elena Saludas