When faced with the threat of COVID-19, Argentina put people’s safety first. A lockdown was swiftly implemented along with measures to protect the livelihoods of all working people. This action undoubtedly saved many lives and has been successful in containing the virus.
Shutdowns in Argentina and other countries have created economic setbacks. However, despite the immediate costs, a shutdown enables a healthy future with economic growth. It is a fitting parallel to the other crisis facing Argentina before it can start rebuilding from COVID-19: avoiding a default on its un-payable dollar-denominated debt.
Argentina made a good-faith proposal for an orderly restructuring to its creditors, based on realistic expectations of what it can pay. Creditors need to understand that while delaying repayment might seem costly now, giving Argentina the space to recover will benefit them in the future. Given the current global economic context and the fact that Argentina mostly exports commodities with prices that have collapsed, if anything, the government’s offer to creditors is too generous.
