Argentina: The Buenos Aires Shuffle

An enraged Joaquin Ferran, head of the International Monetary Fund’s mission in Buenos Aires, last week stormed out of the office of Bernardo Grinspun, Argentina’s Economy Minister. According to bystanders, Grinspun shouted after him, “I will ask (the IMF) to relieve you from your post!” Instead, Grinspun got the sack. That afternoon he and Enrique Garcia Vazquez, head of the central bank, resigned under pressure from President Raul Alfonsin.

The President was dissatisfied with his economic team and realized that quarreling with the IMF was dangerous. Argentina needs loans from the agency to avoid defaulting on its $45 billion foreign debt. The IMF’s dispute with Grinspun centered on his inability to reduce Argentina’s inflation rate, which was 688% last year. Argentina promised to slow inflation to 300% by September, but in January prices surged at an annual pace of 1,370%.

Alfonsin replaced Grinspun with Juan Sourrouille, who has been the government’s chief economic planner. The new central bank head will be Alfredo Concepcion, former Secretary of Internal Commerce. Their top goals will be to curb inflation and restore good relations with Argentina’s rich uncles at the IMF.