If one happens to be a government, which by global financial concord cannot go bankrupt,
states can very well fall into this or that debt trap and run up a debt to GDP ratio that far
exceeds the 80 or 100 percent that little more than a decade ago were theorized to be the limit of sound economic health. In such situations, instead of tightening the belt and suffering in poverty, a contemporary government is more likely to take the collections bowl – along with a huge stack of paperwork, statistics, and reform plans – on the road.
Yet instead of presenting cases to international investors (like a friends-of-Lebanon bash,
private equity fundraiser, or public-private partnership roadshow) at a self-organized or just any IFI conference, a destitute government in the global capitalist age under Western hegemony will migrate to a meeting such as the annual spring meeting of the International Monetary Fund (IMF) in Washington DC. Before that, one requests a visit from an IMF team with a relatively small purse and a very large appetite for numbers and painful commitments.

The regional landscape

The interactions between the IMF and the Arab region since the 1990s were not the largest and
not the most successful. One stalwart Middle Eastern ally of US policy making, Jordan, entered its first of 11 IMF agreements to date in 1989. By the 2000s, according to scholar Julie Miller, 15 years of the IMF-recommended structural adjustment programs have “done little to boost the overall economy, and actually made the lives of the poorest people worse”.

From a geopolitical neighborhood perspective, Egypt offers a frequently cited recent case of
how the IMF operates in the 2020s. According to an IMF press release from March 2024, Egypt signed a 46-month Extended Fund Facility (EFF) agreement with the IMF in 2022 worth $3 billion. The program, augmented to $8 billion in March 2024, was aimed at addressing Egypt’s chronic fiscal deficits, managing inflation, and reducing the state’s outsized role in the economy. 
To secure IMF backing, Egypt was required to devalue its currency in order to achieve
exchange rate flexibility, cut energy subsidies, and increase interest rates—moves that sparked inflation and pushed many Egyptians into poverty as their purchasing power was greatly reduced.

In late 2024, President Abdel Fattah el-Sisi signaled a possible reevaluation of the IMF
agreement due to mounting social pressures and regional turmoil, highlighting the political
volatility that often accompanies IMF reforms. Still, Egypt has been largely praised for adhering
to its program. In March 2025, the IMF approved another $1.2 billion disbursement under the EFF, noting “steadfast implementation” of agreed-upon reforms, and consumer price inflation that is expected – by the IMF’s reckoning in the spring 2025 regional economic outlook – to recede from estimated over 33 percent to 19.7 percent in 2026.

Mirror of wider concerns

The projection of positive and prosperity generation outcomes of such interaction with the IMF, however, is hairy, not to say highly uncertain. As a Chinese scholar argued in a 2023 comment piece , the allocation for financial relief in connection with Covid-19 was, albeit formally in line with avowed IMF principles, highly unequal in favor of G7 countries versus African economies. Many developing countries have been finding that “the borrowing rules for the IMF and the World Bank have increased their debt burden, and the ‘debt sustainability framework’ used by these two institutions for assessment has also been marked by the hegemonic will of the US.
In Lebanon’s past, increased exposure to the will of hegemonic powers has not really been a
decisive concern. The first harrowing occurrence of unsustainable public debt, during the skyrocketing of the public debt to GDP ratio from around 100 percent in the late 1990s to above 180 percent in the mid 2000s, resulted in the Beirut debates circuit raising the question if
Lebanon was in danger to become “another Argentina”, mirroring that country’s dependency on the IMF.

The specter of an IMG agreement had at the time been held at bay as the chosen Lebanese
path to finance remained issuance of debt instruments such as Eurobonds and treasury-bills, and roll-over of more and more such “paper”. But – as the meltdown of the Lebanese economy in 2020 demonstrated – the hammer of indebtedness continued to hang on an invisible thread over Lebanon throughout the following two decades of unresolved, rolled-over, and at the end escalating public debt.

This notwithstanding, the fate of Argentina, a comparatively wealthy country in the middle of the last century but since, and for decades, tumbling from one crisis and episode of currency meltdown to the next moment of popular unrest and painful austerity, is one that no local IMF agreement considerations can dismiss off hand.

Argentina: cautionary tale of chronic borrowing 

Argentina is the country with the largest exposure to IMF deals, coming to a total of now
nominally $177 billion over an ongoing history of 23 IMF agreements. The often controversial
story of Argentina’s indebtedness with the fund spans 67 of its 69 years of IMF membership and programs that commenced with a $75 million program in 1958. Its latest incarnation is a $20 billion agreement with the government of President Javier Gerardo Milei, an economically
IMF-affine and US-administration-cheering libertarian.

The story has many chapters, with the $20 billion latest deal by far not the biggest and most controversial. To many, it is a cautionary tale of insight into how IMF programs operate in complex environments. In one incident with perhaps exemplary political connotations from 2018, the Argentinian economy was flailing under the policies of then-President Mauricio Macri, elected in 2015.

At the time, according to a video published by rightwing news site Infobae in July 2020, Mauricio Calver-Carone, former IMF Executive Director and senior advisor to US President Trump, claimed the US president pushed for an IMF deal to help Macri’s reelection with the hope that the unpopular Argentinian leader would side with the US on its Venezuela policies. It was consequent to Mr. Trump’s push, Calver-Carone claims, that Argentina received its most substantial IMF loan of $57 billion.

The program aimed to stabilize the economy, reduce inflation, and rebuild investor confidence.
However, economic conditions worsened due to internal challenges and external shocks.
Inflation remained high, public debt increased, and social unrest grew in response to austerity
measures, to a degree such a heightened degree that the IMF has become widely unpopular in the country. For many Argentinians, the IMF cure is perceived as far worse than the economic disease. 

In 2022, a year in which inflation rates averaged at 74 percent according to data from Focus
Economics, Argentina renegotiated the terms of its agreement with the IMF to ease repayment conditions and modify some of the required reforms. This case highlights the importance of tailoring IMF programs to a country’s political and economic realities. It also shows the potential consequences when reforms outpace a government’s capacity to implement them or fail to account for public resistance.

On April 8, 2025, just in time for reaping fruits of the Argentinian administration’s strategic and
ideological alignment with both the IMF and the US government of President Donald Trump,
Argentina reached a staff-level agreement for a 48-month EFF of $20 billion.