Western hemisphere business leaders and government officials are meeting in Rio de Janeiro to discuss future economic growth in Latin America, a region battered by political and economic turmoil over the past year. The main topic on the opening day of their conference was the plight of Argentina.
Argentina's economic collapse and its prolonged negotiations with the International Monetary Fund were the main topics of discussion on the opening day of the World Economic Forum's Latin American Business summit.
Speaking at a panel discussion, a top Argentine Economy Ministry official outlined his government's hopes for reaching an agreement with the IMF. But the official, Guillermo Nielsen, also complained that the negotiations are taking a long time. He said the two sides could have signed an accord in August re-establishing Argentina's credit line, if the fund had been more flexible.
Argentina, which early this year defaulted on $132 billion in public debt, is seeking to roll-over the money it owes to multilateral lending agencies. Last Thursday, Argentina did not pay $805 million due to the World Bank, paying only $79 million in interest instead.
Mr. Nielsen Wednesday reiterated his government's decision not to make any more payments on Argentina's multilateral debt until an agreement is reached with the IMF. He said that Argentina's international reserves of some nine billion dollars will be exhausted by May if it continues to make the payments.
Mr. Nielsen also went on to strike a defiant note, saying Argentina will not change policies that have brought a certain economic stability to the country in recent months.
"We are still negotiating. But we have not changed any of our key issues, any of our key policies," he said. "They are working. We are not changing them, and we are not going to change them because simply they are working in the right way."
At a news conference later, Mr. Nielsen said his government has been under pressure to change certain policies, but these pressures have lessened. He refused to say who is putting pressure on Argentina.
The Bush administration and the IMF have been calling on Argentina to come up with a sustainable economic development program, and to implement reforms to make the country's economic system more transparent.
At the Rio conference, a top U.S. State Department official described the Argentine decision to suspend its payments to lending agencies as "unfortunate". But Undersecretary of State for Economic Affairs, Alan Larson, urged both sides to keep negotiating.
"Our view is that it is important for both sides to keep working, and that it is possible for there to be an arrangement where the Fund in some way lend support to the efforts the government is making and that has been our constant refrain over the past months," he said. "It is unfortunate there was the mispayment on Thursday, I think that is a serious issue but we don't think that that means the negotiation has to be over."
Argentina, which devalued its currency early in the year, is in the midst of its deepest economic depression in modern history. About 60 percent of the population lives below the poverty line, and about 23 percent of the workforce is unemployed.
The World Economic Forum meeting in Rio has brought together About 400 decisionmakers from some 30 countries, including business leaders and government officials. The conference, whose aim is to discuss achieving economic growth with social equity in Latin America, ends Friday.