“Ah, don’t be alarmed. This is for the performance. I’ve been neck and neck with Candidate Massa in the recent polls, you see.”
As if it were nothing, the man set the chainsaw down beside him.
The Director of the IMF’s Americas Department forced down a sigh. A man like this was currently one of the most viable presidential contenders. If he won the runoff in a week, he would become president.
Was there hope for Argentina?
“It’s all right. Politics needs performances like that, too.”
“As expected of the IMF. Meeting all sorts of people must have made you very understanding.”
“Congratulations, Candidate Milei. I never expected it, but you’ve somehow made it all the way to the runoff.”
“Yes. Now there’s only one man left. That damn Massa! If I just beat Candidate Massa, I’ll become president of Argentina.”
The man spoke in an excited voice, as though he already had the presidency in his grasp.
“Which brings me to the matter at hand, Director. About the favor I asked you before—what do you say?”
“Impossible.”
The Director of the Americas Department answered with absolute firmness, without the slightest hesitation.
“No, why?”
“Candidate. You know which country on earth has stiffed the IMF out of the most money, don’t you?”
“That’s all in the past.”
“Who says it’s in the past? You still haven’t repaid the forty-four billion dollars you borrowed in 2018, and even that repayment date was pushed back under the excuse of COVID, was it not? Under these circumstances, how can you ask us for another loan?”
The Director’s voice was thick with anger.
Argentina was a regular customer of the IMF. To date, it had taken out more than twenty loans. And yet whenever repayment dates approached, they cried poverty, extended maturities, reduced interest, and engaged in all manner of shameless behavior.
And now those very same people were demanding additional loans just because a presidential election was coming up, so of course he could not help but seethe.
“Oh dear. It seems our Argentina’s reputation in the international community isn’t very good. Then please read this instead. It’s the national reform plan I have in mind.”
“No. I will not read it.”
This time, too, the Director of the Americas Department was firm without hesitation.
“Candidate Milei. Do you know how many times the IMF has been fooled by promises like this? Argentina’s previous president also said at first that he would carry out reforms. His predecessor, and the predecessor before him, and the one before that—all of them cried reform at the beginning. And yet why has nothing changed for decades?”
“Just read it first and—”
“Why should I review promises you’re not going to keep anyway?”
“Huh…”
“The purpose of the Americas Department’s visit today is one thing. The debt restructuring adjusted for you during COVID—carry it out without fail! There will be no more additional loans, no interest forgiveness, and no principal forgiveness. Keep that promise without fail.”
Every member of the Americas Department wore the same expression.
In the international community, the IMF was undoubtedly the most notorious loan shark. And yet, just as there was always someone flying above those who ran, these people were outlaws who stiffed even the IMF.
“Oh dear. It seems I should show my sincerity first.”
Yet despite that reaction, the man smiled with an utterly unconcerned expression.
“Very well, Director. We can talk more about additional loans later. Instead, please at least review our national blueprint.”
“Promises you won’t keep anyway—”
“If you keep acting like this, we may fail to meet the debt targets adjusted during COVID, you know?”
The Director of the Americas Department boiled inside.
Regardless of time and place, money seemed to be something one lent while sitting down and collected while standing up. But after a brief review, the Director wore an unreadable expression.
“…What is this?”
“It’s a national reform plan. I told you you’d like it.”
“What in the world…”
“If I take power, the very first thing I’ll do is restructure the civil service. The target is one hundred thousand people. Accordingly, I’ll abolish ten ministries and reduce the fiscal deficit.”
“…Candidate?”
“Along with that, I’ll carry out a devaluation of the peso. The current exchange rate is around four hundred pesos to the dollar, but I’ll immediately raise that to eight hundred. Once the blue dollar—the black-market dollar—and the market price gradually become similar, I’ll abolish the fixed exchange rate and follow a floating exchange rate. Naturally, I’ll create various institutional safeguards so the government cannot interfere with Argentina’s central bank.”
The political independence of the central bank… the abolition of the fixed exchange rate.
Now that neoliberalism had set in, these were extremely obvious matters, but in truth, they were immensely important. One of the main reasons Korea had been beaten by the IMF was that it had failed to do exactly this.
“That is not the end. I will eliminate the various subsidies currently provided to the people and strengthen protections for foreign corporations.”
“…Do you understand what that means?”
“Yes. It means the people will curse their own president for shielding foreign corporations. But Argentina has lived in hell for the past several decades. We’ve realized that if you recklessly seize foreign assets, investment funds leave, companies withdraw, and as a result, the entire national industry is put in jeopardy.”
“…That too, but I meant whether you understand what it means to lay off civil servants and cut government spending.”
“Look, Director. Before I’m a presidential candidate, I’m an economist. I know very well what side effects will appear when the subsidies provided by the government are cut off. That’s why even if I cut every other budget, I’m thinking of doubling the budget for the presidential security office. Haha.”
The Director of the Americas Department was aghast.
How could he talk about possibly being assassinated while laughing like that?
“What do you think? If we show this kind of sincerity, can the IMF provide us with additional loans?”
“…If you keep even half of what you just said, we will consider it.”
“Half… Then if I keep all of it, can you lend us twice as much?”
“…”
“I’m joking, joking. Haha. In any case, you’re saying you are willing to lend. That’s enough. I’ll contact you again after the runoff. My presidential campaign schedule is busy, so I’ll take my leave now.”
Watching him stride away energetically and pick up the chainsaw again, the Director of the Americas Department felt a strange sense of incongruity.
He did not believe him.
From a market perspective, politics, in the end, was also a business of selling votes. Argentina’s many predecessors had made promises like this until now, but in the end, they had been unable to overcome their support bases. This time would be the same.
“Ah, Director of the Americas Department, I forgot to tell you this. Eva Perón is dead. Argentina will no longer cry for her. I will truly reform Argentina’s economic structure down to the bone. Then I really must be going.”
And yet the faintly unhinged… no, almost certainly mad look in his eyes kept giving him that sense of incongruity.
What was it… Did he truly mean to do it? Since he had climbed this far without any support base to begin with, did that mean he owed no one anything?
The Director of the Americas Department looked out the window at a building whose construction had been halted for thirty years.
Would he be able to see that building completed before he died…?
*
A risk management meeting held in celebration(?) of recovering the principal.
Today, the pension fund executives gathered in the conference room with smiles on their faces for the first time in a while. It was not a risk meeting convened because of a crisis, but a risk meeting convened because of hedging.
Recently, the Nasdaq had shown a pillar of fire, and the pension fund’s rate of return had risen vertically. It was the fastest pace among sovereign wealth funds, and in some quarters, expectations were spreading that this year’s return might exceed 20%.
“Well, there’s no urgent agenda where every second counts, so let’s just get through the updates quickly.”
“Yes.”
“The Head Office Director has instructed us to select ten external managers. As you all know, sixty percent of our pension fund assets are concentrated in the United States. Naturally, the external managers we select should be fund companies that do not handle U.S. assets, correct?”
“Yes, yes.”
“Futures and options are fine, and short selling is fine too. Even if they’re somewhat aggressive, let’s select places that can hedge our assets properly.”
“Understood.”
“And separate from this issue, our cash-equivalent assets are continuing to pile up as well. The Head Office Director instructed us to look for investment destinations among emerging-market bonds and stock markets, and several people have already recommended good places. Let’s discuss that today.”
“Understood.”
After the amicable meeting had more or less ended, the conference room suddenly fell silent.
I knew the secret behind this suspicious silence.
Everyone glanced sideways at me once, then soon lowered their heads.
“Ahem, hmm.”
“Ahem, hah.”
As the uncomfortable throat-clearing continued, Department Head Choi opened his mouth.
“Why is everyone so quiet? Senior Associate Lee, Senior Associate Park, Team Leader Kim, and Team Leader Jeong, the four of you submitted reports. Does everyone fully agree with their contents?”
“Yes, Division Head. Greece has succeeded in structural reform and has recently been receiving all the expectations of the stock market. I agree with Team Leader Jeong’s Greek portfolio.”
“I agree with Senior Associate Park’s China investment as well. Of course there are negative factors stemming from real estate, but that doesn’t mean China is a country that will collapse like this. The Chinese stock market should be included in the portfolio now too.”
“I agree with Team Leader Kim’s alternative investment. With the U.S. stock market burning that hot, will real estate really stay still? I hear New York real estate is already showing unusual signs, so I hope we purchase buildings preemptively.”
Department Head Choi nodded.
“Good. Everyone agrees with Senior Associate Park, Team Leader Kim, and Team Leader Jeong’s reports, then? But why is no one saying a word about Senior Associate Lee’s report?”
“Well, Senior Associate Lee is…”
“He’s always good at what he does. Haha…”
“There must be some reason behind Senior Associate Lee’s report. Yes. There must be a reason this time too…”
They all sided with me in pleasant tones, but their faces were grim.
Of course they were. I had written that we needed to buy roughly five trillion won’s worth of Argentina’s MERVAL index and bonds…
“Then, everyone, as it stands—”
“Argh, I can’t hold it in! Department Head Choi, I’d like to say one thing.”
Just before the meeting ended, Director Kim Myeongcheol, the most impatient among us, raised his hand high.
“Of course I know. Yes, I know. Among us, the one with the best investment results and the best eye is Senior Associate Lee. It’s all thanks to Senior Associate Lee’s portfolio that we recovered all of last year’s minus seven percent performance and have already entered profitable territory. But!”
“…”
“Senior Associate Lee, isn’t this going too far…? We’re investing in emerging markets right now to diversify risk, aren’t we? But Argentina… These bastards are the worst of the worst, people who even stiff the IMF. Is this really right?”
At his signal, the team leads rose up like a swarm of bees.
“That’s right, Senior Associate Lee. No matter how I look at this, the basis is too weak… This isn’t diversifying risk. It’s like jumping into a fire pit while carrying straw.”
“Last year, Argentina’s bond interest was sixty percent, but not a single global investor bought them. Why? Because the value of the peso was dropping by a hundred percent.”
“Argentina is in a state where even its own citizens don’t trust the peso and are transacting in dollars. It’s practically North Korea.”
As expected, it seemed there was no way this would pass easily.
Inwardly, I hoped for supporting fire from Director Oh. But when his eyes met mine, he quietly looked away.
“Everyone, stop.”
Department Head Choi restrained the red-faced team leads and spoke.
“A risk meeting is a place where unbiased conversation is important. It’s not as if Senior Associate Lee is saying Argentina’s stock market has hope for no reason, is it? Candidate Milei’s victory in the runoff is almost certain. And that man has clearly promised austerity.”
After saying that, Department Head Choi suddenly sighed.
“But listen, Senior Associate Lee… Do you believe that man? The opponent is Argentina… Argentina, where national bankruptcy is an annual event.”
I scratched my head.
If anything, it seemed Department Head Choi was the one who distrusted my report the most.