IMF loans with austerity conditions drove Argentina to historic default

Evidence

Argentina is one of the most infamous examples of IMF intervention. During the 1980s and 1990s, the IMF provided Argentina with multiple loans to “rescue” the country from debt. These loans came with harsh austerity conditions, leading to deep cuts to social spending, such as pensions and education, while foreign and national investors were lured by attractive deals on newly privatized sectors, lower taxes, and weakened worker protections. In 1998, when the economy entered a deep depression, a $22 billion IMF loan package resulted in more of the same social suffering but not much of the promised economic stability. By 2001 Argentina’s economy had collapsed, causing the largest sovereign debt default in history at that time. — Clara E. Mattei, Escape from Capitalism, 300