Argentina secured a positive vote for Russia and China last month, after the tour arranged by Alberto Fernandez for both countries. There was some relief, because it was foreseeable that while the domestic issue was finally dealt with (for approval or refusal of extended facilities) there would be an open defense of Argentina from the two countries visited and strong by the Argentine president. A direct criticism against the normal functioning of the organism. This is despite the recognition that Russia and China have only 6.4% of the total vote in the council, divided into 3.7% China and 2.7% Russia.
The joint specific weight is symbolic and not enough to agree to any agreement, but it was considered that even before the invasion of Ukraine one could be trusted at the time of addressing the Argentine issue with the presence of Russian (and Chinese) defenses against the decisive Argentine position. It would symbolically counteract the emphatic attacks against the country and deal with its economy that Japan, the Netherlands, and other countries traditionally frowned at the lack of precision and predictability of national public accounts. This support is now in crisis, since it is not known what kind of decision the IMF itself will take with Russia and its participation in the organization’s board of directors, in the event that international sanctions are rolled out against Putin and he eventually arrives at his participation as a hero. . in international financial organizations.
The possible absence of Russia in the final vote does not really change Argentina’s chances of success on the fund’s board. According to official accounts, The country will guarantee 70% global support in the directory. This level has been reached with Germany, France, Spain and other European countries that will vote for it, as well as other major countries, excluding, will also support Argentina. This group included Russia and China, adding the Arab countries (especially the Arab Gulf states, which have a strong presence on the IMF board), as well as, logically, all of Latin America and Africa.
It is also hoped that more consensus will be achieved with key countries such as Canada and the rest of the European Union, where the proportion will rise to around 70%. Thus, it would be necessary to have only an additional 10% for the basic level so that a proposal that violates what the IMF statutes mandate and dictates can be approved. Only a minimum of 85% collateral can fund line technicians be authorized to implement a payment plan for the country outside of the only mechanisms authorized under the organisation’s charter: Standby and Extended Facility, in all possible variants. Since what the state is proposing is a change of criteria, only a vote of more than 85% can approve the request.
With this, sooner or later, Alberto Fernandez will have to work things out face-to-face (via video call) with Joe Biden, with US backing on the board. This country owns 16.74% of the shares, without which it would be impossible for the intention of a (minor) amendment of the IMF’s Basic Charter to be feasible. Taking into account the close experience of the last IMF negotiators (Alejandro Werner, Roberto Cardarelli and their associates) who, after signing an out-of-status position, ended up being expelled from their positions.
On the topic of board voting, the situation is clearly defined. Each sovereign country has a percentage of the vote depending on its GDP, reserves, and direct contributions to the work of the Washington-based organization. Any normal agreement (standby or extended facility) is approved with a minimum of 70%, but a majority 85% is required for special plans or changes to the organic charter. More recently, such a majority has been necessary in cases such as the Greek crisis of 2010 and the Portugal crisis of 2011. In all, the Board of Directors is made up of 24 CEOs representing different percentage levels of authority within the organization. The United States, Japan, Germany, France and the United Kingdom can choose an exit without the help of any other country. China, Saudi Arabia, and Russia elect, de facto, one director each; The remaining 16 choose it according to country groups. Argentina, through local envoy Sergio Chodos, occupies the group with Bolivia, Chile, Peru, Paraguay and Uruguay.
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