In These New Times

A new paradigm for a post-imperial world

Argentina demands credit agency reform at UN

Posted by seumasach on September 23, 2011


22nd September, 2011

The need to reform multilateral credit bodies, particularly the International Monetary Fund, was highlighted at the UN on Tuesday by Argentine President Cristina Fernandez.

It is necessary to formulate clear rules regarding capital transfer and financial speculation, said Fernandez while addressing the 66th UN General Assembly [1].

She said that when financial stock growth is seen with regard to global Gross Domestic Product “we can see clearly why we are living in a world where speculation is seemingly unbridled.”

She said that while in the 80s the financial asset stock was 1.1 time equal to the production of good and services worldwide, in late 2008 that rate was already 3.6, which not only triggers an unprecedented volatility, but also recurrent market crisis.

In this regard she warned that if multilateral credit bodies fail to work hard in the regulation of capital flows, currently uncontrolled, it will be impossible to put the markets in order.

Changes have been just cosmetic so far, she said, and also criticized strongly the risk qualification agencies, which have had a great responsibility in the current crisis.

She recalled from the moment late President Nestor Kirchner took office, her country has been demanding a reform of multilateral credit bodies.

The world has changed substantially since 2003, and so has changed Argentina, she said, and cited achievement including the reduction of the poverty index to a one-digit figure, the dramatic fall in the unemployment rate and the most important economic growth cycle.

When Argentina defaulted in 2001, it was accused by credit bodies of “serial unreliable”, when, in fact, the country was the guinea pig of neoliberal policies of the 90s, she said.

Fernandez extolled the State capacity to restructure its foreign debt in the past few years and comply regularly with payments without turning to capital markets.

In 2003, a five percent of the GDP was allocated to paying the debt and two percent was allocated to education. Today, the proportion has been reversed and we allocate 6.4 percent of the GDP to education and two percent to paying debts.

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