Transcript of an IMF Book Forum

Pragmatisn: Latin America's New 'Ism'?: "If you look at Argentina, they seem to be doing everything wrong, and yet they seem to be getting everything right. If you look at the statistics in Argentina, they look wonderful. Every single statistic you look at looks absolutely wonderful, and yet just look in detail at what they are doing. Prices all over the place, the president going from supermarket to supermarket telling the supermarket attendants what prices to charge for what items. They have banned the exports of meat in Argentina. This is lunacy, Argentina, the meat exporting par excellence, and they are banning that. Why? Because they want to create a superabundance in the internal market so they can bring prices down. They have a big energy crisis in Argentina. Why? Because 4 years ago they controlled prices, and, of course, investors did not invest, and when investors do not invest, what happens? Supply goes down, and at a time when, as was the case in Argentina, demand was doing up because the economy was picking up. A lot of people were converting their automobiles from oil to gas, so demand went up, supply went down because there was no investment. So what happened? An energy shortage. And this had international repercussions because [it affected] Argentina's [commitment] to export some of that gas to Chile, and, of course, as you well know probably better than I do, Chile was quite displeased about this. So that is one very interesting case in which everything looks good from the outside. The picture is pretty rosy. And yet I think there is a fundamental weakness at the base that will become more apparent as the international conditions vary."