Editing Washington Consensus (section)

==== Argentina ====
{{See also|Argentine debt restructuring}}
[[File:Menem con banda presidencial.jpg|thumb|Argentine President [[Carlos Menem]]]]
The [[1998–2002 Argentine great depression|Argentine economic crisis of 1999–2002]] is held out as an example of the economic consequences said by some to have been wrought by application of the Washington Consensus. 

In October 1998, the IMF invited Argentine President [[Carlos Menem]], to talk about the successful Argentine experience, at the Annual Meeting of the Board of Governors.<ref name="menem">{{cite web|author=Menem, Carlos|date=October 1998|title=Intervención del Excmo. Sr. Carlos Saul Menem, Presidente de la Rerpublica Argentina, ante las Juntas de Gobernadores del Fondo Monetario Internacional y del Grupo del Banco Mundial en las deliberaciones anuales conjuntas|url=https://www.imf.org/external/am/1998/speeches/PR05S.pdf|access-date=2009-06-07|publisher=IMF|archive-date=May 6, 2011|archive-url=https://web.archive.org/web/20110506073026/https://www.imf.org/external/am/1998/speeches/PR05S.pdf|url-status=live}}</ref> President Menem's Minister of Economy (1991–1996), [[Domingo Cavallo]], the architect of the Menem administration's economic policies, specifically including "convertibility", said:

{{blockquote|On the second semester of 1998 Argentina was considered in Washington the most successful economy among the ones that had restructured its debt within the Brady's Plan framework. None of the Washington Consensus' sponsors were interested in pointing out that the Argentine economic reforms had differences with its 10 recommendations. On the contrary, Argentina was considered the best pupil of the IMF, the World Bank and the USA government.<ref name=cavallo>{{cite web
  | author = Cavallo, Domingo
  | title = Clase N° 6. Argentina hasta la crisis brasileña
  | publisher = Harvard University
  | year = 2004
  | url = http://www.cavallo.com.ar/wp-content/uploads/C6.pdf
  | access-date = 2009-06-07
  | quote = Hacia el segundo semestre de 1998 Argentina era considerada en Washington la economía más exitosa de todas las que habían reestructurado su deuda en el marco del Plan Brady. Ninguno de los patrocinadores del "Consenso de Washington" se preocupaba por destacar que las reformas económicas de Argentina diferían de sus 10 recomendaciones. Por el contrario, Argentina era considerada como el "mejor alumno" del FMI, el Banco Mundial y el Gobierno de los EEUU.
  | archive-date = August 16, 2009
  | archive-url = https://web.archive.org/web/20090816053909/http://www.cavallo.com.ar/wp-content/uploads/C6.pdf
  | url-status = live
}}</ref>}}

The problems which arise with reliance on a fixed exchange rate mechanism (above) are discussed in the World Bank report ''Economic Growth in the 1990s: Learning from a Decade of Reform'', which questions whether expectations can be "positively affected by tying a government's hands". In the early 1990s there was a point of view that countries should move to either fixed or completely flexible exchange rates to reassure market participants of the complete removal of government discretion in foreign exchange matters. After the Argentina collapse, some observers believe that removing government discretion by creating mechanisms that impose large penalties may, on the contrary, actually itself undermine expectations. Velasco and Neut (2003)<ref name="VELASCONEUT">{{Cite journal|last1=Velasco|first1=Andres|last2=Neut|first2=Alejandro|year=2003|title=Tough Policies, Incredible Policies?|doi=10.3386/w9932|doi-access=free|s2cid=6764956}} NBER Working Paper No. 9932. National Bureau of Economic Research, Cambridge,
Massachusetts</ref> "argue that if the world is uncertain and there are situations in which the lack of discretion will cause large losses, a [[precommitment]] device can actually make things worse".<ref name="WBreport">{{Cite web|url=http://www1.worldbank.org/prem/lessons1990s/|title=Server Error|website=www1.worldbank.org|access-date=December 1, 2008|archive-date=May 15, 2008|archive-url=https://web.archive.org/web/20080515222713/http://www1.worldbank.org/prem/lessons1990s/|url-status=live}}</ref> In chapter 7 of its report (''Financial Liberalization: What Went Right, What Went Wrong?'') the World Bank analyses what went wrong in Argentina, summarizes the lessons from the experience, and draws suggestions for its future policy.<ref name="WBreport"/>

The IMF's Independent Evaluation Office has issued a review of the lessons of Argentina for the institution, summarized in the following quotation:

{{blockquote|The Argentine crisis yields a number of lessons for the IMF, some of which have already been learned and incorporated into revised policies and procedures. This evaluation suggests ten lessons, in the areas of surveillance and program design, crisis management, and the decision-making process.<ref name=FMIIEO>{{Cite web|url=https://www.imf.org/External/NP/ieo/2004/arg/eng/index.htm|title=Independent Evaluation Office (IEO) of the IMF -- Report on the Evaluation of the Role of the IMF in Argentina, 1991-2001|website=www.imf.org|access-date=June 5, 2022|archive-date=March 28, 2022|archive-url=https://web.archive.org/web/20220328120816/https://www.imf.org/External/NP/ieo/2004/arg/eng/index.htm|url-status=live}}</ref>}}

While President [[Néstor Kirchner]]'s reliance on price controls and similar administrative measures (often aimed primarily at ''foreign-invested'' firms such as utilities) clearly ran counter to the spirit of the Consensus, his administration in fact ran an extremely tight fiscal ship and maintained a highly competitive floating exchange rate; Argentina's immediate bounce-back from crisis, further aided by abrogating its debts and a fortuitous boom in prices of primary commodities, leaves open issues of longer-term sustainability.<ref>{{Cite web |url=http://www.petersoninstitute.org/publications/papers/mussa0406.pdf |title=Global Economic Prospects 2006/2007<!-- Bot generated title --> |access-date=March 13, 2007 |archive-date=March 3, 2016 |archive-url=https://web.archive.org/web/20160303192214/http://www.petersoninstitute.org/publications/papers/mussa0406.pdf |url-status=live }}</ref> ''The Economist'' has argued that the Néstor Kirchner administration will end up as one more in Argentina's long history of populist governments.<ref>See, e.g., The Economist. April 12, 2006. Latin America—The return of populism.</ref> In October 2008, Kirchner's wife and successor as president, [[Cristina Kirchner]], announced her government's intention to nationalize pension funds from the privatized system implemented by Menem-Cavallo.<ref>{{Cite web|url=https://www.wsj.com/articles/SB122516435782975265|title=Argentina's Pension Plan Presses On, Driving Down Markets and the Peso|first=Michael J. Casey and Matt|last=Moffett|date=October 28, 2008|work=The Wall Street Journal|access-date=August 8, 2017|archive-date=November 13, 2017|archive-url=https://web.archive.org/web/20171113113024/https://www.wsj.com/articles/SB122516435782975265|url-status=live}}</ref> Accusations have emerged of the manipulation of official statistics under the Kirchners (most notoriously, for inflation) to create an inaccurately positive picture of economic performance.<ref>{{cite news|last=Forero|first=Juan|date=August 16, 2009|title=Doctored Data Cast Doubt on Argentina|newspaper=The Washington Post|url=https://www.washingtonpost.com/wp-dyn/content/article/2009/08/15/AR2009081502758.html|access-date=May 27, 2010|archive-date=November 8, 2012|archive-url=https://web.archive.org/web/20121108161909/http://www.washingtonpost.com/wp-dyn/content/article/2009/08/15/AR2009081502758.html|url-status=live}}</ref> ''The Economist'' removed Argentina's inflation measure from its official indicators, saying that they were no longer reliable.<ref>{{cite news|date=February 25, 2012|title=Official statistics: Don't lie to me, Argentina|newspaper=The Economist|url=https://www.economist.com/node/21548242|access-date=January 21, 2013|archive-date=January 20, 2013|archive-url=https://web.archive.org/web/20130120120727/http://www.economist.com/node/21548242|url-status=live}}</ref>

In 2003, Argentina's and Brazil's presidents, Néstor Kirchner and [[Luiz Inácio Lula da Silva]] signed the "Buenos Aires Consensus", a manifesto opposing the Washington Consensus' policies.<ref>Massaldi, Julian, [http://www.zcommunications.org/buenos-aires-consensus-by-julian-massaldi "Buenos Aires Consensus: Lula and Kirchner's agreement 'Against Neoliberalism'"] {{webarchive|url=https://web.archive.org/web/20120927070907/http://www.zcommunications.org/buenos-aires-consensus-by-julian-massaldi|date=September 27, 2012}}, Znet, November 20, 2003</ref> Skeptical political observers note, however, that Lula's rhetoric on such public occasions should be distinguished from the policies actually implemented by his administration.<ref>See, e.g., Financial Times at following link: [http://www.ft.com/cms/s/d62ca1a2-c219-11db-ae23-000b5df10621.html Left turn ahead? How flaws in Lula's plan could condemn Brazil to lag behind its peers]{{registration required}} {{Cite web |url=https://www.ft.com/content/d62ca1a2-c219-11db-ae23-000b5df10621 |title=Application Error |access-date=June 5, 2022 |archive-date=June 5, 2022 |archive-url=https://web.archive.org/web/20220605122737/https://www.ft.com/content/d62ca1a2-c219-11db-ae23-000b5df10621 |url-status=bot: unknown }}.</ref>