Argentina blames IMF for crisis

Debt default triggered an economic crisis

International Monetary Fund policies are to blame for impoverishing 15 million people in Argentina, the country's president has said.

Nestor Kirchner's comments came after an internal IMF report criticised the fund's relationship with the country over the past decade.

The report said the IMF had exacerbated the country's economic crisis, which struck in December 2001.

But Mr Kirchner said the self-criticism was simply too little, too late.

The IMF report also blamed the government for its 2001 debt default which triggered the crisis, pushing half the population into poverty.

"Obviously we can't ignore the responsibility of the ruling class in Argentina," Mr Kirchner told BBC correspondent Elliott Gotkine in Buenos Aires.

Mea culpa

"But I think the IMF has to bear in mind that it is publishing this mea culpa 10 to 15 years after the events and that the damage it's left us with in Argentina is 15 million people or more living in poverty," he said.

Mr Kirchner added that the Fund had been hypocritical to laud Argentina's economic progress throughout the last decade.

He noted that as late as 1998, the IMF invited Argentina's then leader, Carlos Menem, to address its annual meeting.

At that stage, he said, it was already becoming apparent that the Fund was now backing economic policies which were pushing the country towards disaster.

The IMF spent billions over a 10-year period to maintain a controversial exchange rate that pegged Argentina's peso to the dollar on a one-to-one basis.

It lent billions of dollars to Argentina, lauded as an exemplar of IMF-mandated economic reform, even though it knew Mr Menem would use the money to boost public spending ahead of presidential elections, he said.

When the IMF cut off support in late 2001 the government was forced to default on a portion of its $141bn foreign debt.

Argentina is still negotiating with creditors over the defaulted debt and the country's jobless rate hovers over 15%