The presidents of nine Latin American countries and Spain teleconferenced with senior executives from the International Monetary Fund, World Bank and the Inter-American Development Bank on Wednesday to discuss how to handle the economic impact of the coronavirus pandemic.
The national leaders asked the organisations to help provide more solutions to the crisis, including a "possible restructuring" of debt.
President Alberto Fernández, representing Argentina, signed a joint statement requesting assistance along with the leaders of Chile, Colombia, Costa Rica, Ecuador, Peru, Paraguay, the Dominican Republic and Uruguay. It was issued after the teleconference, which was called by the Spanish government. According to AFP sources, the meeting lasted more than three hours.
IMF Managing Director Kristalina Georgieva participated in the meeting, which came on the same day the Fund issued revised economic forecasts for the world, predicting a collapse in global GDP of 4.9 percent. The Fund said the Latin America-Caribbean region would contract by 9.4 percent as a whole, worse than the 4.2 percent plunge projected back in April.
A Spanish government source told AFP that Georgieva's attitude during the meeting was "constructive."
Also present online for the event were the World Bank's Vice-President for Latin America and the Caribbean, Felipe Jaramillo, the President of the Inter-American Development Bank (IDB), Luis Alberto Moreno, and his counterpart from the Development Bank of Latin America (CAF), Luis Carranza.
Neither Brazil nor Mexico, the region's two largest economies, were represented at the meeting.
In the statement, the leaders called on the international financial institutions "to guarantee liquidity by facilitating access to currency swap lines," and "by providing fast-access lines of credit."
At a macroeconomic level, they also requested the need to "study the possible restructuring of debt payments, case by case, for highly indebted countries as a consequence of the pandemic."
Argentina is among those nations and is currently seeking to restructure more than US$66 billion in foreign debt with private creditors. Among its debt burden, it also owes US$44 billion to the IMF, the result of a record US$56-billion bailout issued in 2018.
The leaders also asked for support to "strengthen health and social protection systems," the latter through "soft" loans and "possible bilateral donations."
Since the beginning of the epidemic, the IMF has provided loans for many countries in the region. Within the framework of its Flexible Credit Line, which consists of resources accessible at all times without continuous conditions for two years, the Fund granted Chile a line of some US$23.93 billion. Peru (US$11 billion), Colombia (US$10.8 billion) and Mexico (US$60 billion) are also being supported.
Latin America is currently the epicentre of the coronavirus pandemic. As of Wednesday, the region has more than 100,000 deaths and 2.1 million cases, with Brazil, Mexico and Peru among the most affected.
The Spanish government says that it wants to support Latin American countries through its initiative. Prime Minister Pedro Sánchez has said that middle-income nations suffer a "clear disadvantage when it comes to benefiting from the traditional instruments of international financial institutions," which are often aimed at the poorest countries.