G20: Massa calls for global financial overhaul

The economy minister deemed Argentina an “economic victim” of the Ukraine-Russia war

Economy Minister Sergio Massa called for the International Monetary Fund (IMF)’s to change their surcharge policy at the G20 summit in the Indian city of Bengaluru, describing Argentina and other countries an “economic victim” of the Ukraine-Russia war.

Speaking at a meeting of G20 Finance Ministers and Central Bank governors, Massa said that “the pandemic, the war, and the drought caused by climate change all condition global food security and economic development.” 

“Existing asymmetries in financing conditions between developing and advanced economies were exacerbated by the tightening of interest rates in advanced economies,” Massa said, referring to other countries’ response to the war.

Massa also criticized the IMF board for not revising its surcharge policy given the war, calling it “regressive” because “it falls on the backs of countries with greater financing needs” and “hinders economic recovery.”

IMF surcharges, introduced in 1997, mean that additional rates are applied to countries that take credits that surpass their quota of allowed amounts and return times. Argentina’s record-breaking US$44 billion credit is roughly 1000 percent of its quota, according to the lender.

“The same countries that call for the seriousness of the war damages to be on the agenda should ask their leaders in multilateral organizations to listen to us as economic victims of those damages,” he added.

According to a report by the Economy Ministry, Argentina lost US$4.94 billion in its trade balance due to the “price shock” caused by the Ukraine-Russia war, mostly in the fuel and agricultural sectors. 

While Massa highlighted the role of multilateral banks of credit, he called for “financial relief” to countries that need it and said that sustainable financing is especially challenging for “developing countries” and that lots of countries cannot access “climate financing in favorable conditions” for the energy transition. 

Moreover, Massa said that there are countries rich in economic resources and countries rich in ecosystemic resources. He called Argentina a “financial debtor,” and an “environmental creditor.”

“The natural heritage and biodiversity of our countries serves humankind, which makes us unrecognized creditors for financial creditors,” he said.

Massa’s agenda in India will continue today with a bilateral meeting with his French counterpart, Bruno Le Maire. He will also meet with his Brazilian and German counterparts, Fernando Haddad and Christian Lindner. Finally Massa will also hold a meeting with the World Bank’s Managing Director Of Operations, Axel Van Trotsenburg.


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