The approach of Alberto Fernández to China and the political resistance of Máximo Kirchner will delay the approval of the agreement with the IMF

February 7, 2022

Alberto Fernández closed the understanding with the International Monetary Fund (IMF) convinced of having overcome in January a apocalyptic default instance. But his trip to China and the unexpected political move by Máximo Kirchner put Argentina in a new groundhog day: it is unlikely that the board will approve the program in March, and if it does, there will be no reserves in the Central Bank to pay -that month- capital maturities and outstanding debt to the Paris Club.

China is the global enemy of the United States. Xi Jinping has a strategic plan to put Beijing above Washington, and the Silk Road is the sophisticated diplomatic device -soft power- that the communist leader designed to meet that precise geopolitical objective.

Next to the Silk Road, which is a public project and full of good intentions,China has a technological and military apparatus that protects its national security and looks for the weaknesses of its global enemies to advance in its project of being a world power without falling into Thucydides trap.

That technological device has its flagship: It’s called Huawei.

Alberto Fernández visited China, signed the incorporation of Argentina to the Silk Road, and before flying to Barbados -after a stopover in Madrid-, he had lunch at Huawei with its CEO Ren Zhengfei.

Alberto Fernández and his entourage pose in the offices that Huawei has in Beijing.  (Twitter / @cecilianicolini)
Alberto Fernández and his entourage pose in the offices that Huawei has in Beijing. (Twitter / @cecilianicolini)

Alberto Fernández reached an understanding with the IMF for the efforts he made in the White House beside Sergio Massa (Head of Deputies), John Louis Manzur (chief of staff), santiago cafiero (chancellor), Martin Guzman (Economy Minister), Gustavo Beliz (Secretary for Strategic Affairs) and Jorge Arguello (Ambassador in Washington).

Guzmán had reached a negotiation stage that needed a political decision to crown the understanding. He had worked at the Secretary of the Treasury, and the President -with his allies in the Government- played hard to get out of the swamp and avoid default in January.

Joseph Biden listened to Jake Sullivan (director of the National Security Council), Juan González (National Security Advisor for Latin America) and Antony Blinken (Secretary of State) before to ease Argentina’s position in the IMF.

Sullivan, González and Blinken assured the President of the United States that Alberto Fernández would maintain diplomatic equidistance with Russia and China and that it would do nothing for Huawei’s expansion in the country. They failed Biden: in Moscow and Beijing, the head of state did the opposite.

The information that Sullivan, González and Blinken provided to Biden was not based on satellite listening or dubious gossip that was picked up in the diplomatic halls of Buenos Aires and DC. The three officials spoke with Alberto Fernández, Massa, Cafiero, Beliz and Arguello, both in Argentina and in the United States.

And in all cases, lunches in the country house in Olivos, barbecues in the barbecue area in Massa, dinners at the Argentine embassy, ​​bilateral meetings at the State Department, conclaves in the West Wing of the White House, or chats at midnight in Washington, the same reserved information was always transmitted: From Balcarce 50 only diplomatic gestures without strategic weight would be made with Russia and China, and there would be nothing to facilitate the expansion of Huawei in Argentina.

Alberto Fernández and Jake Sullivan during an official meeting in the country house of Olivos
Alberto Fernández and Jake Sullivan during an official meeting in the country house of Olivos

The obvious contradiction between what was said to Biden’s advisers and the events carried out by Alberto Fernández would not imply the collapse of the understanding due to a unilateral decision by the White House. There will only be a hardening in the negotiations and in the demands of the Secretary of the Treasury, in the face of the discursive inconsistency of the Government regarding its foreign agenda.

This probable toughening in the key aspects of the program will condition the times to sign the staff agreement with the IMF. Guzmán thought that he could resolve this negotiation instance by the beginning of March, but the presidential visit to Moscow and Beijing upset the tentative schedule.

If the signing of the staff agreement is delayed, the parliamentary discussion will also be delayed. And that delay will mean that the board will not be able to approve the agreement with Argentina before the end of March.. In this case, the IMF will not disburse the corresponding items to cancel the debts of that month, and the default will appear -again- as a possible event.

In March, the Government could exhibit two structural flaws: the absence of reserves in the Central Bank to settle debts with the IMF and the Paris Club, and the inability to approve the staff agreement with its own votes in both houses of Congress.

Biden distrusts Alberto Fernández and will limit his political will in the Fund. While Máximo Kirchner has already announced that he opposes the agreement with the IMF, exhibiting a partisan position that challenges Baglini’s Theorem.

In the ideological antipodes, the president of the United States and the Peronist deputy put the Casa Rosada in check. March will be unforgettable.


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