The IMF recommends to Argentina and other emerging countries to reform labor and open the economy

The new conduct of MFIs He explained what the position would be for the agency to recommend to countries such as Argentina how to get out of the recession and get back to economic growth. In the first official document since the Bulgarian Kristalina Georgieva Director-General, the Fund has recommended reforms of emerging economies in the area of job, financial and of trade.

Argentina needs to sit down with the Fund's authorities in order to renegotiate in the coming months, the financial agreement for $ 57.1 billion. The national government announced in late August, less than a year after the signing of the program, its intention to seek new deadlines To make credit.

In a report released Wednesday under the name "Turning on growth in emerging and low-income economies: what role structural reforms? ", the IMF has proposed reforms in six economic zones so that this group of countries can return to the path of growth.Argentina is considered an emerging economy and even part of the report names the country on an ad hoc basis.

"Reforms in areas such as the the governance -organization and scope of the role of the State – internal and external funding, the trade, the labor market and some areas like electricity and telecommunications, could generate considerable benefits for the medium-term business. A set of comprehensive and comprehensive reforms could double the speed of convergence of emerging and advanced economies, "the report said.

In this sense, he said that these reforms could "increase the annual GDP growth"Durably for a few years, whatever it may be, some of the changes suggested by the Fund, particularly in labor regulations and internal finance -" may lead to higher costs in the short term when they are done in bad times; These are best implemented under favorable economic conditions and at the beginning of the electoral mandate of the authorities. "

"Major simultaneous reforms in the six areas under consideration could increase the production of more than 7% over a period of six years. This would increase annual GDP growth by more than 1 percentage point and double the current average rate of income improvement per inhabitant at the level of the developed economy, "continued the international organization.

On Argentina, the IMF recalled the reforms carried out in the 1990s, while considering that the "economic shock" of 2001 and "bad economic policies" reversed its positive effect. The decline in convertibility and its effects on the economy "has led to a reversal of earlier reforms".

The areas in which the Fund recommends reforms are: "trade – tariffs, domestic finance – regulation and supervision", external finance – opening of the capital account, that is to say entry and exit of funds to and from abroad ", regulation of the labor market and of the electricity and telecommunications market".

With regard to labor reform, "greater flexibility of labor protection legislation", illustrated by a streamlining of referral procedures and reduction of compensation, "increases the employment of almost a 1% On average over the medium term, "the labor market reform improves the profitability of the formal sector, by encouraging formal enterprises to develop and informal enterprises to formalize themselves," the IMF also concluded.

Next week, a delegation from the national government will meet with the IMF authorities in Washington and seek to resume dialogue to unblock the situation. $ 5400 million which has been pending since mid-September.