The title of this book might suggest that Raúl García Heras will discuss the recent 2001 financial crisis in Argentina and the subsequent repeated negotiations between President Eduardo Duhalde and agents of the International Monetary Fund (IMF) and World Bank, but as an economic historian, García Heras returns to the roots of the relationship between Argentina, the Paris Club and the international financial institutions. Essentially, this work is a history of this continuing relationship that began in the mid-1950s. This is a largely under-examined period in the literature, and a reader might ask why we are only hearing about it now. However, as the author points out, this period has been neglected in the academic literature largely because of a lack of accessible sources. The book thus benefits from the recent opening of archives pertaining to the negotiations between Argentina, the IMF, the World Bank and US private banks. As such, García Heras is a pioneer in writing the first historical study on this topic.
His main argument, woven throughout the book, is that political and economic policies coming from and applied by international financial institutions to open markets in Argentina in order to build a soluble and sustainable economic policy were a failure from their very beginning in the mid-1950s. Such policies were also aimed at helping Argentina to establish ties with the international financial community, and this effort seemingly failed because of a variety of internal political and economic factors that were either misunderstood or largely ignored by international creditors. Arguably, some leaders within the Argentine government also ignored signs of potentially failing policies because the aid packages and restructuring programmes did initially provide short-term relief and recovery. Another feature of this book is the description of the relationship between Argentina and the Paris Club, an informal group of creditors. The Paris Club originated in 1956 when Argentina agreed to meet its public creditors in the French capital in order to find a sustainable solution to pay back its debts. From this early beginning it played an important role in trying to influence Argentina to recover, restructure and sustain its economy.
Chapter 2, ‘Illusions and Collaboration, 1958–1962’, details the first infusions of foreign capital intended to help Argentina to restructure its economy and infrastructure. The chapter describes the early formation of a relationship between Argentina and the IMF and World Bank. One of the first programmes was the Economic Stabilisation Plan of 1958, which was intended to restructure Argentina's economy with help from an international aid package. After the overthrow of General Juan Perón in 1955, policymakers, military leaders and civilian politicians sought to dismantle the Peronist model and hoped to liberalise external trade and open markets in line with North Atlantic models of economic development. In 1958 President Arturo Frondizi was a democratically elected president, winning largely on the allure of his economic and political programme, desarrollismo. This initiative called for ‘authentic national development’ for the benefit of all. Initially, it was a broad programme. Its overall goal was to transform the Argentine economy by moving it from a reliance on export receipts from agricultural and pastoral goods to an industrialised and self-sufficient economy. Such a programme was not a unique idea or phenomenon in Argentine economic policy, but what made it diverge from past policy was that the government was willing (and seeking) to borrow from international lenders to promote relatively liberal trade. The 1958 plan called for the devaluation of the peso and economic restructuring. In December 1958 external funds to the amount of US$ 329 million arrived in the shape of a loan-aid package from US private banks, the US government and the IMF. This loan opened the way for others – for instance, despite the initial failed negotiations with the World Bank between 1955 and 1958 described in chapter 1 of the book, by 1961 the World Bank had lent US$ 45.5 million to Argentina for road building. In January 1962 the World Bank granted another loan to the amount of US$ 95 million to a state electricity company, Servicios Eléctricos del Gran Buenos Aires, to upgrade electrical generating and distribution facilities. In some ways, Argentina's credibility increased after these starter loans.
Through these generous loans, the relationship between Argentina and the World Bank and IMF truly began. Despite a relatively rosy start with the first phase of aid and loans, however, Argentina faced an economic crisis in 1962–3, and this is the topic of chapter 3. The initial problems with the foreign-influenced policy for economic development began with a clash of ideology on national versus external influence in economic policy and further internal disagreement on how to implement it. Varying and long-standing political factions within Argentina, such as the Confederacion de Asociaciones Rurales de Buenos Aires and La Pampa, the Sociedad Rural Argentina, the Unión Industrial Argentina and the Confederación General Económica, debated the competence of the economic minister to implement policy that best represented their interests. Also, most of these factions viewed their interests as interconnected with the overall well-being of the economy. At one point the factions were openly hostile to the minister, affecting the outcome of policy implementation and resulting in the resignation of the minister and a continued growth in tensions between the government and these economic groups.
Overall, El Fondo Monetario presents an overview of the infighting and complexities of policy formation and implementation in Argentina. The details of the relationship between Argentina and international financial institutions also make it an interesting read and will likely attract readers from different camps: economic and financial historians, policymakers, political scientists, researchers, undergraduate and graduate students, and general audiences, in particular Argentines who lived through the 2001 crisis and the subsequent political battle between the IMF and Argentina. Targeting a broad audience helps to explain the organisation of the book: it is divided into five substantive chapters together with an introduction, conclusion, prologue and epilogue. For an Argentine researcher, however, the prologue and epilogue seem unnecessary and more appropriate for a general reader who lacks sufficient background knowledge.
Future researchers will be interested in the author's references, which list private and public archives from three different countries: Argentina, England and the United States. The most relevant sources are perhaps those from the IMF and World Bank archives, as well as the US National Archives, in Washington, but García Heras also carried out research on the private papers of three Argentine economic ministers and a president of Argentina's Central Bank.
