Independent Evaluation Office (IEO) of the International Monetary Fund to Investigate the 2018 Stand-By Loan Granted to the Government of Mauricio Macri

The Independent Evaluation Office (IEO) of the International Monetary Fund confirmed this Monday what An analysis of the US$57 billion credit will begin at the end of November (about 44,000 million disbursed) that the organization granted to the government of Mauricio Macri in 2018a “first” that had been announced on Sunday by the Minister of Economy and candidate Sergio Massa in a report.

However, since The agency indicated that it is a common practice regarding this type of loans and it can be seen that among the points to analyze does not contemplate the analysis of the use of resourcesas the minister had suggested when saying that they would investigate whether the money had evaporated in a “capital flight.”

During his interview with Luis Majul, Massa sought to defend his management at the head of the Economy portfolio and highlighted the impact on the economy of the historic drought and the “criminal agreement with the IMF”. In that context, the candidate minister said: “I’m going to give you a scoop that may excite you, because I think it may even be an issue of international repercussions.”

And he advanced: “At the end of the month the IMF begins the investigation into capital flight of the 2018 standby loan. And he is sending a commission to Argentina that is going to carry out a review of the 66% that, according to the AGN, was not used to finance hospitals, schools or to resolve economic stability, but rather to finance the payment to investment funds such as BlackRock”, among others.

Asked by Clarín about the issue, the IMF responded through the organization’s Independent Evaluation Office (IEO), from where they indicated that this agency “carries out objective and independent evaluations of topics relevant to the mandate of the Fund.”

They noted that “the current IEO work program, decided at the end of 2022, includes the evaluation of the IMF’s exceptional access policy. This policy was established in 2002 as a framework to guide IMF lending decisions when normal limits on access to the Fund’s resources are exceeded. The evaluation will examine the application of this policy in completed exceptional access programs, including the 2018 Stand-By with Argentina.”

However, this type of investigation It is a rule that applies to all countries who obtained exceptional access loans, which means that they exceeded the usual credit limit that corresponds to their quota.

The IEO specified what topics the analysis includes: “The evaluation will analyze the design and application of the main elements of the exceptional access policy, which include the four exceptional access criteria (which focus on the country’s balance of payments needs, the sustainability of its debt, its access to markets and the prospects for success of the program), reinforced decision-making procedures, and post-hoc evaluations,” they added.

Among these items, there is no mention of a possible investigation into the legality of the loan or the destination of the funds towards an alleged “capital flight”, two themes that Kirchnerism insists on.

The office mentions sending a mission to Buenos Aires, as the minister had anticipated. “In the course of IEO evaluations, it is common practice to visit relevant countries – in this case Argentina among others – to gather the opinions of key actors at the national level on the issues evaluated. In this context, a visit to Argentina is planned, in principle, for the end of November. The entire evaluation is expected to be completed by the end of 2024.”

They also clarify that the IEO is “independent of the management of the IMF and exercises its functions autonomously with respect to the Executive Board of the institution.” They point out that their objectives are to “foster the culture of learning at the IMF, strengthen the credibility of the institution, and support the responsibilities of the Executive Board in terms of governance and institutional oversight. The IEO evaluates activities already completed by the IMF, not current programs.”

This is not the first time that the IMF has closely examined the loan with Argentina, which is the largest that was awarded in the history of the organization. An ExPost Staff Assessment was published in December 2021, led by Norwegian economist Odd Per Brekk, which concluded that the credit had “substantial risks for the IMF.”

They also stated that the agreement did not meet the objectives “of restoring confidence in the market, reducing external and fiscal imbalances, reducing inflation and protecting the most vulnerable segments of the population.” Ultimately, the program strategy proved too fragile for Argentina’s deeply rooted structural challenges and political realities,” they noted.

The new review is scheduled to be completed by the end of next year.