There is Life After Default - Argentina offers Bondholders A Last Chance Deal
http://www.bloomberg.com/apps/news?p...d=aWq1x4RKZmt4
We really need to be looking at what default is and how to deal with it.
Argentina defaulted in 2001 and is now moving to leave default in a keenly negotiated write off with bond holders.
Argentina has implemented policies which are in many ways the opposite of the IMF World Bank Washington Consensus. Employment and protection of local industry have been key to returning to economic growth.President Cristina Fernandez de Kirchner, locked out of international capital markets since taking office, said an offer to holders of $20 billion of unpaid debt marks a “turning point” in her country’s history and will be a good deal for investors...
A successful exchange of the bonds would enable Argentina, South America’s second-largest economy, to tap global markets after a record $95 billion debt default in 2001. This is the last opportunity for bondholders to accept an exchange and profit from an annual economic growth rate of 6 percent, Fernandez said...
While the offer is “marginally worse than what we had previously been expecting,” it’s “probably a good idea to tender,” Exotix strategist David Aserkoff in London said in a phone interview today. ...
Lehman exposed the need for global controls on capital flows and greater regulation, Fernandez said.
The pressure for dropping important controls, for privatisation and the opening of markets to globalised business along with financial deregulation have been a disaster for many economies: IMF prescriptions for recovery look very similar to the poisons that caused the disease.Fernandez said her priority is to preserve and create jobs. Policies including loans to General Motors Co. and accords with unions helped skirt a recession during the global economic crisis, she said....
Argentina last year had a record trade surplus of $17 billion because of import restrictions and an exchange rate policy that favored local industry, Fernandez said. The economy expanded 0.9 percent, compared with a 0.2 percent contraction in neighboring Brazil and a 1.5 percent decline in Chile.
Fernandez, a former senator and the first woman to be elected president of Argentina, began her four-year term in December 2007.
Nestor Kirchner, 60, took office when Argentina was recovering from the late-2001 financial meltdown that led to violent street protests, attacks on banks and five presidents in two weeks. In 2002, the peso, which had been pegged 1-to-1 to the dollar, declined 70 percent, unemployment peaked at 21.5 percent and the economy shrank 10.9 percent.
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