Now blogging at diego's weblog. See you over there!

emerging (?) markets

A good article on the problems emerging markets face. Having been in Argentina only a few days ago, and having seen the latest iteration of the destruction that is happening in the country, it seems to me that the international community isn't really owning up to its part of the problem.

The World Bank and the IMF are interested in getting their money back first, and then they might consider worrying about the effects they are having on the population (but it's not entirely their fault of course, there are many other factors, such as local history, corruption, etc). In particular, Argentina should have a deal in place before November 5, because if it doesn't, and it is forced to make some payments owned to the IMF and the World Bank at that point, it would have to deplete its hard currency reserves completely to do so.

Conversely, if it doesn't pay, then the World Bank would be "bankrupt" (!) since it would have to mark the whole of Argentina's debt unpayable, which would make its credit rating fall creating a domino effect on the rest of its debt. A bad outcome either way.

Categories: personal
Posted by diego on October 2 2002 at 7:51 PM

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