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The Fund's Financial Folly

Sep 1, 2002

The International Monetary Fund has gone soft on Brazil while keeping its hard line on Argentina. Brazil gets a $30 billion IMF bailout but Argentina stays on bread and water. The Fund and its godfather, the US Treasury, have told Argentina to get lost because it has failed to come up with a coherent economic plan. Brazil, on the other hand, is rewarded for sticking to an IMF program even while it fell deeper into debt. It is true that Brazil has not sunk as low as Argentina, but its ramshackle capital structure has exposed it to the whims of global markets and brought it to the brink of disaster. This is because the supposedly ever-vigilant local and international bond markets and...

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