October 5, 2003
Will Lula follow in Kirchner's lead in
playing hardball with the IMF?
Say what you like about Néstor Kirchner, but Argentina's president has shown the world he knows how to negotiate. He rightfully claimed victory over the International Monetary Fund in September before proceeding to make a predictably aggressive offer a few weeks later to bondholders sitting on $75 billion in defaulted Argentine government debt. Kirchner had a strong hand and played it well. Argentina is growing again as it emerges from the wreckage of the 2001-2002 crisis. Its president is hugely popular at home and key western governments, led by the US, were fed
Argentina extracted a favorable deal from the IMF but its victory could be short-lived if the country fails to address critical policy weaknesses.