And if the solution for end the crisis in Argentina Was it to include it in the BRICS, i.e. in that group of now ex-emerging countries – Brazil, Russia, India, China, South Africa – which has been united under the famous acronym since 2001? The answer, on the spot, is obviously no: in the last decade the economies and growth rates of those countries have already taken very different directions, let alone if there is room for a technically bankrupt country like Argentina. Yet Buenos Aires still hopes for it, and also Brazil, which for a few weeks has expressed the president of the New Development Bank, known precisely as BRICS bank, insists in that direction. Indeed, he is at the head of the multilateral financial institution Dilma Rousseff, former president of Brazil and of the same party as Lula, who is in turn from the same political family as Argentine president Alberto Fernandez.
Argentina: Lula on the field
But most of all, the economy of Brazil it is hand-in-hand with that of its neighboring country: Argentina is the third largest trading partner behind only China and the USA, and the two countries have been contending for years for the world record in soybean exports, with the recent overtaking of Brazil. Mainly Buenos Aires exports raw materials and from Brasilia it imports industrial products. Precisely for this reason, as well as to lend a hand to a friend in difficulty, Lula pushes to bring Argentina under the protective wing of the BRICS: to protect Brazilian exporters from the risk of insolvency of Argentine companies and the State, which constitute an outlet market worth over 10 billion euros a year. Argentina is in the throes of an endless crisis, inflation is at an all-time high and liquidity is crying: the risk of not being paid for exported products is real and it would be Brazil above all that would pay the price, much more than other countries .
Crisis in Argentina: a maxi-loan from the Bank of BRICS?
The ideal formula would be that of a big loan, which in fact would make Buenos Aires less dependent on the International Monetary Fund and therefore on the Western financial community, ending up under the sphere of influence of countries such as China and Russia. In these times of war and strong geopolitical tensions (Brazil itself is under observation for its ambiguous positions towards the conflict in Ukraine) it would not be a recent novelty: the second largest economy in South America would shift its axis - no longer just commercial but also political-strategic – towards the East, with all that that entails. At the moment, however, the regulation of the BRICS bank it does not plan to carry out operations in support of non-member countries, even if there has been an exception in history, when the New Development Bank helped Lesotho, an enclave country in South African territory. Alternatively, the possibility of offering at least guarantees and credit lines to Brazilian companies selling in Argentina is also on the table.
Argentina's ties to the IMF
To date Buenos Aires is tied to the IMF for a maxi loan of 45 billion dollars granted just over a year ago, to which another 5,4 billion was added this spring. Also for this reason, his economy is now "dollarized". Ending up in some way within the BRICS would instead make it possible to disengage from this toxic mechanism, which has done nothing but worsen the situation over the years: a few weeks ago, moreover, the country announced that in trade with China will use the yuan directly as the reference currency, instead of the dollar. However, the path of this integration is still hurdles. Despite the pressure from Brazil, there are also perplexities of a technical nature: the BRICS bank was born as a fund for infrastructural projects and focused above all on sustainable development, certainly not to act as a lifeline for external commercial partners, however strategic (the China is the first partner of both Brazil and Argentina).
Argentina debt: the puzzle remains, but Lula goes on
Furthermore, the New Development Bank is a bank to all intents and purposes, and therefore submits to the evaluation of the rating agencies, which without a doubt – also for geopolitical reasons, effectively reporting to Beijing and Moscow – would end up penalizing the decision to allocate loans non-refundable to a country that is unable to offer any guarantee. What happens then? Alberto Fernandez, close to the expiry of his mandate (and will not reapply) still hopes for it, Lula insists because he knows that Brazil's economy also depends on the improvement of Argentina's and Dilma Rousseff promises: “The operation is not simple and will not be immediate, but opening up to new shareholders is one of the bank's objectives. I have been authorized to continue negotiations with Argentina”. He will talk about it again in the coming months, with the watchful eye of the West.
