Why Argentina President offered to be a gateway to LATAM for Russia days after an agreement with the IMF

The president of Argentina proposed to be a gateway to Latin America for Russia in a move to reduce its dependence on the IMF and the United States. Yet, Argentina had just found an agreement with the IMF and asked for American political support.

Presidents of Argentina and Russia
Alberto Fernández (left) and Vladimir Putin (right) on February 3 during Argentina’s presidential visit to Russia | © Alberto Fernandez

Before going to the opening ceremony of the 2022 Beijing Olympics, Argentina President Alberto Fernández stopped in Russia to meet Vladimir Putin on February 3.

As both countries signed deals on gas, oil and chemical industries and investment for deploying electric trains in Argentina, the leftist Argentine president took the opportunity to mention the difficult economic situation his country is currently in.

Argentina is in a peculiar situation due to its indebtedness,” Alberto Fernández said during a press conference. “Argentina’s economy depends a lot on the debt it has with the IMF, and the influence the United States has in that organization“, he pointed out.

He didn’t miss blaming his predecessor Mauricio Macri who signed the loan with the International Monetary Fund for US$44.5 billion in 2018, the largest bond the Fund ever contracted.

Alberto Fernández also praised a collaboration to deepen ties with Russia because he is “determined that Argentina has to open another path and I believe Russia has an important role in that”.

We have to see how Argentina becomes a gateway to enter Latin America for Russia in a more determined way”, the president emphasized during his speech.

For Alberto Fernández, deepening ties with Russia is a way to reduce its dependence on the IMF.

Yet, the presidential enthusiasm for multiple bilateral agreements comes in the middle of tensions between the United States-NATO and Russia over Ukraine.

Argentina wants to reduce dependency on the U.S. but seeks support for negotiations with the IMF

Furthermore, the declarations come only a few days after Alberto Fernández and Finance Minister Martin Gúzman found an agreement for restructuring its debt with the IMF on January 28.

The country had to pay 731 million dollars at the end of January but the due date was postponed. The agreement would require Argentina to reduce its deficit to zero by 2025 and make cuts in energy subsidies.

The timing for the President’s public stance may seem all the more odd as details with the IMF are not finalized yet.

Moreover, Argentine Foreign Minister Santiago Cafiero went to the United States in mid-January to speak to the U.S. State Department Secretary Antony Blinken. Argentina was seeking political support from the Americans regarding the IMF negotiations.

For the Secretary-General and Foreign Affairs of Buenos Aires Fernando Straface, the statement shows the inconsistency of Argentina’s foreign policy.

But he suggests the declarations were more addressed to his domestic government coalition than the international scene.

IMF is also perceived by Argentinians as the organization that imposes austerity reforms in the country.

In fact, after the president said Argentina found an agreement with the IMF, Máximo Kirchner decided to step down from his role of president of the ruling bloc party in the Chamber of Deputies.

Mr. Kirchner is the son of Néstor Kirchner and Cristina Fernández de Kirchner, both former presidents of Argentina. Cristina Kirchner is currently Argentina’s vice president. “This decision stems from not agreeing with the strategy, and, least of all, the results achieved in the negotiation”, Mr. Kirchner wrote in a public letter.

Máximo Kirchner’s move brings political uncertainty as other lawmakers may be unwilling to endorse the agreement with the IMF while Congress needs to approve it.

Argentina’s pragmatism or contradictory foreign policy with Russia and China?

And after the visit to Russia, Fernández went to China, another country that has difficult relations with the U.S. at the moment. Argentina will be included in the infrastructure development of China’s Belt and Road Initiative.

Before his trip to Russia and China, Mr. Fernández assured the trade deals with these two countries were subject to the agreement with the IMF.

For the governor of the province of Buenos Aires and former Finance Minister under Cristina Kirchner’s presidency Axel Kicillof, the presidential tour in Russia, China, and Barbados is not contradictory with the deal made with IMF.

The governor considered on February 7 that “the timing coincidence can create some confusion or give room for rather sad speculations” but that the contradiction is only seen by “those who merely seek to make noise”, he told El Destape Radio.

He asked not to analyze the agreements with those countries “with conspiratorial eyes or with outdated analyses.

From an empirical point of view, the trip created many productive and commercial opportunities”, he added.

Like Mr. Fernández and all current ruling party leaders, he wanted to emphasize the blame was mostly on Mauricio Macri’s shoulders for having borrowed such large amounts of money and having spent it all in such a short time.

Read more about Argentina

El Presidente mantuvo una reunión con su par de Rusia, Vladímir Putin, y acordaron avanzar en reforzar los vínculos bilaterales, President of Argentina, January 2022, Free access

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