James Cox

This selection first appeared in USA Today on September 5, 2002.

Frustrated IMF officials on Thursday rejected Argentina's plan to stabilize its ravaged economy and restore the flow of international aid, saying they will draft their own blueprint.

The International Monetary Fund has been trying for eight months to coax Argentine officials to outline steps to bring a deteriorating economy under control.

Argentina wants an IMF rescue to prevent a collapse of its banks and to keep from defaulting on existing loans from the IMF and other multilateral lenders. The country has $15 billion in such payments due by the end of 2003 but only $9 billion in foreign currency reserves.

On Thursday, Argentine officials said the IMF approved a one-year delay of a $2.8 billion payment due this month. But the IMF also threw out Argentina's proposal on terms for new loans and said it would draft its own by next week.

Argentina has resisted entreaties by the IMF and the United States, the fund's biggest contributor, to:

• Start negotiating new payment terms with creditors holding defaulted government bonds.
• Find a way to lift the freeze on bank deposits, possibly by converting them to new bonds.
• Cut public spending by cutting civil service jobs and pay.
• Stabilize inflation.
• Shift the burden of the currency devaluation off of banks, which are blocked from calling in bad debts, indexing loans to inflation or collecting payments at the same peso-dollar rate they pay their own obligations.

President Eduardo Duhalde called early elections and will step down in May, six months before his term ends. He appears to be leaving serious action on the economy to his successor, experts say.

"This government has implicitly said they're not going to face it. They're trying to manage a transition without making hard decisions," says Pablo Guidotti, economist at Torcuato di Tella University in Buenos Aires.

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