The relationship between the International Monetary Fund (IMF) and Latin America and the Caribbean (LAC) has historically been a rocky affair of ups and downs, with many economic crises and debt defaults in the middle. 

A turning point in this relationship came in the early aughts, when many countries from the region cancelled their debt with the lender. The end of the pandemic, however, saw that trend change course, with more and more LAC nations requesting loans from the IMF. 

This phenomenon is not taking place in a vacuum, as the Fund’s presence is accompanied by the United States’ growing geopolitical interest in the region. According to experts, this could potentially condition funding in exchange for greater alignment with Washington. 

These are some of the conclusions from the most recent report on the IMF in Latin America and the Caribbean by liberal think tank IDEAs (International Development Economics Associates). 

The region in debt numbers

Of the 83 countries out of the 190 IMF members that are indebted to the Fund, fifteen are in Latin America and the Caribbean.

The high number of LAC countries with some form of IMF engagement becomes more striking when compared to the trough reached in early 2009. At that time, only eight countries in the region maintained a relationship with the institution, and none were located in South America. 

“The weakening of the region’s ties with the Fund had been driven by improved external conditions and the stigma left by its interventions across the Global South under the Washington Consensus policy framework,” the report explained.  

The region is currently also the IMF’s most indebted: of the US$183 billion the Fund has dispensed in loans, around US$74 billion are penciled in to countries from Latin America and the Caribbean (44% of the total). 

Argentina and Ecuador as test cases

The region’s debt is........

© Buenos Aires Herald