Trapped in IMF Debt, Argentina Turns to Russia and Joins Chinaâs Belt and Road
By Ben Norton – Feb 6, 2022
Argentina is trapped in $44 billion of IMF odious debt taken on by corrupt right-wing regimes. Seeking alternatives to US hegemony, President Alberto FernĂĄndez traveled to Russia and China, forming an alliance with the Eurasian powers, joining the Belt and Road Initiative.
The United States constantly intervenes in the internal affairs of Latin America, organizing coups dâetat, destabilizing independent governments, trapping nations in debt, and imposing sanctions. Washington sees the region as its own property, with President Joe Biden referring to it this January as âAmericaâs front yard.â
Seeking alternatives to US hegemony, progressive governments in Latin America have increasingly looked across the ocean to form alliances with China and Russia.
Argentinaâs President Alberto FernĂĄndez did exactly that this February, taking historic trips to Beijing and Moscow to meet with his counterparts Xi Jinping and Vladimir Putin.
FernĂĄndez signed a series of strategic agreements, officially incorporating Argentina into Beijingâs international Belt and Road Initiative, while expanding economic partnerships with the Eurasian powers and telling Moscow that Argentina âshould be the door to enterâ Latin America.
China offered $23.7 billion in funding for infrastructure projects and investments in Argentinaâs economy.
In the meetings, FernĂĄndez also asked for Argentina to join the BRICS framework, alongside Brazil, Russia, India, China, and South Africa. Xi and Putin reportedly both agreed.
âI am consistently working to rid Argentina of this dependence on the IMF and the US,â FernĂĄndez explained. âI want Argentina to open up new opportunities.â
The Argentine presidentâs comments and meetings with Putin and Xi reportedly angered the US government.
Argentina is trapped in odious debt with the US-controlled IMF
Argentina is a Latin American powerhouse, with significant natural resources and the third-largest economy in the region (after Brazil and Mexico, both of which have significantly larger populations).
But Argentinaâs development has often been weighed down by debt traps imposed from abroad, resulting in frequent economic crises, cycles of high inflation, and currency devaluations.
The International Monetary Fund (IMF)âa de facto economic arm of the United States, over which Washington alone has veto powerâhas significant control over Argentina, having trapped the nation in huge sums of odious debt.
In 2018, Argentinaâs right-wing President Mauricio Macri requested the largest loan in the history of the IMF: a staggering $57.1 billion bailout.
Macri was notorious for his corruption, and this was no secret at the time. By agreeing to give such an enormous sum of money to Macriâs scandal-plagued government, the IMF knew it was ensnaring Argentina in debt it would not be able to pay off. But this was far from the first time the US-dominated financial instrument had trapped Argentina in odious debt.
RELATED CONTENT: Argentina: An Agreement of More Submission
In December 2021, the IMF published an internal report admitting that the 2018 bailout completely failed to stabilize Argentinaâs economy.
But when Argentinaâs center-left President Alberto FernĂĄndez entered office in December 2019, his country was ensnared in $44.5 billion in debt from this bailout that the IMF itself admitted was a total failure. ($44.5 billion of the $57.1 billion loan had already been disbursed, and FernĂĄndez cancelled the rest.)
The Argentine government has tried to renegotiate the debt, but in order to do so the IMF has imposed conditions that severely restrict the nationâs sovereignty â such as appointing a British economist who âwill virtually be the new economic minister,â acting as a kind of âco-government,â warned prominent diplomat Alicia Castro.
Seeking ways around these US debt traps, FernĂĄndez decided this February to turn to the two rising Eurasian superpowers.
Argentine President FernĂĄndez travels to Russia to meet with Putin
On February 3, Argentine President Alberto FernĂĄndez travelled to Russia to meet with President Vladimir Putin.
âIâm certain Argentina has to stop being so dependent on the [International Monetary] Fund and the United States, and has to open up to other places, and that is where it seems to me that Russia has a very important place,â FernĂĄndez said, explaining his motivation for the trip.
FernĂĄndez added that, for Russia, Argentina âshould be the door to enterâ the region, telling Putin, âWe could be a venue for the development of your cooperation with Latin American nations.â
đˇđşđŚđˇ | "Estamos dando un paso importante para que la Argentina y Rusia profundicen sus lazos", expresĂł el presidente @alferdez en una declaraciĂłn conjunta que brindĂł junto a su par VladĂmir Putin. #GiraPresidencial
đ @KremlinRussia_Ehttps://t.co/aHl8tOuPZy pic.twitter.com/APoQR6VHtU
— Casa Rosada (@CasaRosada) February 3, 2022
The two leaders discussed Russian investment in the Argentine economy, trade, railroad construction, and energy technology.
FernĂĄndez also thanked Moscow for collaborating with his country in the production of its Sputnik V COVID-19 vaccine. Argentina was the first country in the western hemisphere to do so.
The Argentine president even pointed out in their meeting that he has received three doses of the Sputnik V vaccine. Putin added, âMe too.â
Es un honor haberme reunido con VladĂmir Putin, presidente de Rusia.
Tuvimos la oportunidad de intercambiar ideas sobre cĂłmo podemos complementar mucho mĂĄs el vĂnculo entre nuestras naciones. pic.twitter.com/ntmDGn6jtD
— Alberto FernĂĄndez (@alferdez) February 3, 2022
Putin said the two countries agree on many issues, calling Argentina âone of Russiaâs key partners in Latin America.â
Argentine President FernĂĄndez travels to China to meet with Xi
Just three days after meeting with Putin, President Alberto FernĂĄndez travelled to China on February 6 to meet with President Xi Jinping.
In this historic trip, Argentina officially joined Beijingâs Belt and Road Initiative, a massive global infrastructure program.
RELATED CONTENT: Argentina to Russia: We Want To End Dependency On US
FernĂĄndez and other top Argentine officials signed agreements for $23.7 billion in Chinese financing, including investments and infrastructure projects.
The funding will be disbursed in two parts: one, which is already approved, will provide Argentina with $14 billion for 10 infrastructure projects; the second, for $9.7 billion, will finance the South American nationâs integration into the Belt and Road.
There are three joint Chinese-Argentine projects that were reportedly at the top of FernĂĄndezâs list: creating 5G networks, developing Argentinaâs lithium industry, and building the Atucha III nuclear power plant.
Tuve una cordial, amistosa y fructĂfera reuniĂłn con Xi Jinping, presidente de China. Acordamos la incorporaciĂłn de Argentina a la Franja y la Ruta de la Seda.
Es una excelente noticia. Nuestro paĂs obtendrĂĄ mĂĄs de US$ 23 mil millones de inversiones chinas para obras y proyectos. pic.twitter.com/LGyIJ6zWdG
— Alberto FernĂĄndez (@alferdez) February 6, 2022
FernĂĄndez also discussed plans for Argentina to produce Chinaâs Sinopharm COVID-19 vaccine, in addition to Russiaâs Sputnik V.
Argentina and China signed a comprehensive memorandum of understanding, including 13 documents for cooperation in areas such as green energy, technology, education, agriculture, communication, and nuclear energy.
FernĂĄndez and Xi discussed ways to âstrengthen relations of political, commercial, economic, scientific, and cultural cooperation between both countries,â according to an Argentine government readout of the meeting.
The two leaders apparently hit it off very well, with FernĂĄndez telling Xi, âIf you were Argentine, you would be a Peronist.â
đ¨đłđŚđˇ | El presidente @alferdez mantuvo reuniones sobre el proyecto de producir en Argentina la vacuna de Sinopharm, participĂł de la inauguraciĂłn de los JJOO de Invierno #Beijing2022 y visitĂł el Museo de la Historia del Partido Comunista. #GiraPresidencialhttps://t.co/acSH9rvpM7 pic.twitter.com/Edz7hHRLE8
— Casa Rosada (@CasaRosada) February 4, 2022
Argentinaâs incorporation into the Belt and Road comes mere weeks after Nicaragua joined the initiative in January, and Cuba in December.
Latin Americaâs growing links with China and Russia show how the increasingly multipolar international system offers countries in the Global South new potential allies who can serve as bulwarks against and alternatives to Washingtonâs hegemony.
While right-wing leaders in Latin America keep looking north to the United States as their political compass, progressive governments are reaching across the ocean to the Eurasian powers of China, Russia, and Iran, building new international alliances that weaken Washingtonâs geopolitical grip over a region that the US president still insists is its âfront yard.â
Featured image: Argentine President Alberto FernĂĄndez with Xi Jinping, president of China (left), and with Vladimir Putin, president of Russia (right). Photo composition by Multipolarista.
Ben Norton
Benjamin Norton is the founder and editor of the independent news website Multipolarista, where he does original reporting in both English and Spanish. Benjamin has reported from numerous countries, including Venezuela, Nicaragua, Bolivia, Ecuador, Honduras, Colombia, and more. His journalistic work has been published in dozens of media outlets, and he has done interviews on Sky News, Al Jazeera, Democracy Now, El Financiero Bloomberg, Al Mayadeen teleSUR, RT, TRT World, CGTN, Press TV, HispanTV, Sin Censura, and various TV channels in Mexico, Nicaragua, Venezuela, Ecuador, and Bolivia. Benjamin writes a regular column for Al Mayadeen (in English and Spanish). He was formerly a reporter with the investigative journalism website The Grayzone, and previously produced the political podcast and video show Moderate Rebels. His personal website is BenNorton.com, and he tweets at @BenjaminNorton.
