Argentina's debt is one of the five challenges of the next director of the IMF

Kristalina Georgieva is ready to succeed Christine Lagarde as Executive Director of the IMF after the board of directors of the multilateral body declared that she was the only candidate for the post.

Georgieva, a 66-year-old Bulgarian who has served as the World Bank's Managing Director since early 2017, will face a series of challenges if her appointment is confirmed by the IMF's directors.

As a defender of multilateralism, it should maintain Lagarde's latest approach to combating climate change, increasing women's participation in the labor market and reducing inequalities. She has more experience in development than Lagarde but is less familiar with the financial problems that affect advanced economies.

The rescue in Argentina

The largest rescue package ever granted by the IMF in history – a $ 57-million bet on the economic management of President Mauricio Macri – is about to be postponed.

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When Georgieva badumes it, Macri was probably displaced by Alberto Fernández, a populist with little regard for IMF interests or loan conditions. The collapse of the peso after the OSPP canceled much of the economic progress achieved and increased the chances for the IMF to renegotiate or replace the current program.

While the IMF defended its strategy, critics question the design and scale of the loan, in addition to its inability to obtain more widespread support from the Argentineans.

Economic downturn

The global economy is losing momentum, putting more pressure on the IMF as a lender of last resort in the world.

According to the Fund's own forecasts, which have been cut several times, global production is expected to increase by 3.2% this year, compared to 3.8% in 2017 and 3.6% in 2018. The downward trend is strengthening. the risk that more countries will have to seek help from the IMF.

Business conflict

The trade war between Washington and Beijing not only complicates the global economy, but has also turned multilateral institutions like the IMF into battlefields.

Lagarde has maintained good relations with both parties, as well as Georgieva. But the IMF still runs the risk of being caught in the middle if the United States or China opposes its investigations, doubts its basic conclusions or hampers a problematic bailout. The work of the Transparency Fund will also be closely monitored.

Get money

Georgieva will have to finalize an agreement negotiated by Lagarde to renew the Fund's debt agreement with the United States, which maintains IMF resources at around $ 1 trillion. However, many members of the Fund do not believe that this is sufficient given the demand they could face in the event of a new recession or financial crisis.

During the IMF's next fundraising campaign, Georgieva may try to achieve what Lagarde could not: a permanent increase in funding in exchange for governance changes giving more power to major emerging market economies, a measure that would be controversial for the EU and the US

repeat offenders

Georgieva will focus not only on Argentina, but also on Ukraine and Pakistan, two other countries that frequently borrow from the IMF but have never been able to fully stabilize their economies and financial systems.

Ukraine is waiting to sign an agreement with the Fund to receive new loans by the end of the year. And Pakistan, after months of negotiations, got new loans in July, but the program has been questioned.

Translation: Mariana Oriolo