IMF chief praises Massa’s ‘stabilising plan’
Kristalina Georgieva hails “strong steps” taken by economy minister since taking office.
The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, this week hailed the “positive meeting” she held with Economy Minister Sergio Massa in Washington, praising the steps the official has taken to “stabilise” markets.
Georgieva described the much-anticipated talks with the minister as “very positive,” noting that it came after a week of “productive and highly professional meetings” between the “technical teams” from both sides.
The IMF chief went on to praise “the strong steps” taken by Massa since he took office in July, which she said had helped to “stabilise the markets and reverse a scenario of high volatility.”
According to Georgieva, the minister “expressed his clear intention” to improve the economy “under the principles of fiscal order and the strengthening of reserves.”
She added: “The minister expressed his clear intention to mobilise external support, intensify efforts to stabilise the economy, and secure sustainable and inclusive growth.”
Georgieva’s comments go beyond the usual rhetoric Argentine officials get in Washington, a reflection of how Massa, a seasoned political operator, has flexed the political muscle his predecessors lacked. Before Monday, Massa spent a week meeting with executives from Exxon Mobil Corp, Chevron Corp, Amazon.com Inc and Goldman Sachs Group Inc, among several others.
LITMUS TEST
The trip to Washington was Massa’s first major litmus test as economy minister, as he tries to reassure markets and the IMF of A rgentina’s commitment to its Us$44.5-billion Extended Fund Facility programme.
Under the terms of the deal, President Alberto Fernández’s government must increase the international reserves of the Central Bank and reduce Argentina’s fiscal deficit from three percent of gross domestic product in 2021 to 2.5 percent this year, 1.9 percent in 2023 and 0.9 percent in 2024.
Georgieva on Monday insisted that the goals of A rgentina’s programme “will remain unchanged,” while noting that “conclusive progress” had been made on fiscal parameters,
monetary policy and reserve accumulation. She also praised the nation’s efforts to combat tax evasion and money-laundering.
Massa left Washington content, but said in his own press conference that much remains to be done.
“I’m satisfied with the results” of the trip, Massa told reporters, “but I understand it’s just a step.”
“Argentina’s situation is fragile because we have a big fight against inflation and we have sectors of the country suffering a lot, so we have a huge job ahead of us,” he added.
“We have an economy that has generated employment over the last two years, that has
been consolidating growth but also has challenges and problems to solve,” such as high inflation, he said.
MASSA MEETS US TREASURY CHIEF
The IMF meeting was preceded by another at the US Treasury Department, at which Massa met Treasury Secretary Janet Yellen, a rather unusual occurrence.
Yellen encouraged Massa to implement reforms necessary to rebuild the government’s credibility, stabilise markets and set the stage for sustainable growth, according to a Treasury official who asked not to be identified.
After a marathon week of meetings, the minister did not return to Argentina empty-handed: he managed to secure multi-billion-dollar commitments from a host of international organisations, including US$5 billion from the Inter-american Development Bank (IDB) in 2022 and 2023, as well as another US$900 million from the World Bank.
OIL AND GAS INVESTMENTS
During his stop in Houston, Texas, Massa held extensive meetings with representatives from the energy sector, in which Chevron and Total promised to increase their investments for next year.
Total confirmed it would spend US$700 million on its Fénix development project in the Austral Basin in conventional oil, while Chevron announced a Us$330-million increase to previously trailed investments. The latter firm will use the resources to invest in a third production area at Vaca Muerta to produce unconventional or shale oil.
According to reports, Massa promised oil companies legal stability and clear rules to develop Argentina’s energy potential. He also sought to reassure firms that opportunities in liquified natural gas were ripe for exploitation.
“Argentina does not need one LNG plant, it needs several LNG plants, and what we want is for everything that represents reserves to be accompanied by investment that allows us to transform this resource into jobs, sales of Argentine products to the world and, obviously, profitability for companies,” he said.