March 1, 2006
As Latin American nations settle debts and shake off their reliance on multilaterals, the IMF and other Washington institutions must redefine themselves to stay in the game.
Inter-American Development Bank DC headquarters.Last December, Argentina and Brazil – the International Monetary Fund's (IMF) first and third-largest borrowers and its two biggest clients in Latin America – announced within days of each other that they would repay their debt before schedule. Brazil wiped out its entire $15.5 billion IMF tab, and Argentina knocked out its remaining $9.6 billion in obligations to the lender of last resort.
In a remarkable shift of circumstances, these countries that once had to beg for help from multilateral agencies like the IMF were able to erase vast debts with the stroke of a pen. However, this has underlined yet again the identity cr