Country Program Evaluation. Argentina 2016-2019

Inter-American Development Bank - Office of Evaluation and Oversight

Lugar: Washington; Año: 2020 p. 512

0-8436-1072-7

(LAC), is among the LAC countries whose populations enjoy thegreatest degree of equality. However, it continues to face developmentchallenges. Living standards, education and health outcomes, and accessto basic infrastructure vary greatly among different Argentine regions;in particular, the northern provinces (Norte Grande, or NG) and parts ofgreater Buenos Aires lag behind. Argentina?s business environment ismarked by obstacles to competition, growth, and innovation, as well asinsufficient access to finance because of the underdeveloped financialsystem. A lack of investment in infrastructure has resulted in persistentgaps in the quality of Argentina?s roads and of the electricity supply.Argentina?s institutions and regulatory framework continue to exhibitsignificant weaknesses, although public perceptions of the quality andefficiency of Government improved at least temporarily during theevaluation period.The 2016-2019 evaluation period was marked by a return to crisisafter initial stabilization attempts. The incoming Government tookseveral measures to address a deteriorating macroeconomic andfiscal situation and create better conditions for investment. However,as economic shocks in early 2018 added to continued high fiscaldeficits financed by foreign debt and Argentina?s Central Bank,waning investor confidence resulted in capital outflows and a currencydepreciation. Facing liquidity challenges, in June 2018 Argentina?sGovernment signed a US$50.7 billion three-year stand-by agreementwith the International Monetary Fund (IMF), the largest in IMF history,which was later expanded by another US$6.3 billion. So far, US$44.1billion of the program have been drawn down. Inflation, poverty, andunemployment continued to rise through 2018 and 2019, and afterthe ruling coalition?s clear loss in the August 2019 primary elections,a sharp drop in international reserves prompted the Government toreinstate currency controls and delay domestic debt payments. Aftergeneral elections confirmed the opposition?s return to power in late2019, the new Government passed several emergency measures,including increased export taxes and a freeze in public utility tariffs,and announced its intention to restructure a large part of its foreigndebt, including its obligations under the IMF program. More recently,the Government has also introduced several emergency measures toaddress the effects of the COVID-19 pandemic.