After twelve years without the IMF’s intervention in Argentina’s economic policies, in 2018, Argentina signed a new, highly controversial, 50 billion loan with the Fund. This loan, which violated Argentine domestic rules and IMF rules and may have been illegal under international law, worsened the economic situation rather than stabilizing it. In 2022, after secretive and “docile” negotiations, the debt was renegotiated, though only slightly modified. This development offered little relief and prompted political backlash. The saga continues, and last year, Argentina signed yet another loan—further deepening their indebtedness.
It’s common knowledge that these IMF loans have led to an acceleration of Argentina’s economic crisis—per capita income has dropped by 30% and inflation is rampant. Argentina’s attempts to manage its external debt also expose a profound structural contradiction: the pursuit of debt sustainability clashes head-on with the need to guarantee the sustainability of life.
As I argue in a recent article, the conditions imposed to ensure debt sustainability within the global system precipitate a crisis of social reproduction by requiring the intensification of the super-exploitation of the workforce and by exacerbating extractivism. This recurring cycle of indebtedness and crisis, which seems to be permanent in the countries of the Global South, has further consolidated Argentina’s condition of dependency. In seeking to prioritize financial “sustainability,” Argentina’s ultimate underlying objective is to remain within the debt system—a system that inherently produces and reproduces dependency. As long as it’s caught in this system, Argentina risks rendering life itself unsustainable.
***
The dominant approaches to debt sustainability, such as that of the IMF, define “sustainability” strictly in financial terms: the ability of a government to meet all its future payment obligations without exceptional assistance or default. This criterion focuses on ensuring that the primary balance needed to stabilize debt is economically and politically feasible, while keeping refinancing risk low and preserving growth potential.
This approach is reductionist because it limits itself to calculating financial flows without considering the actual value creation needed to sustain them, focusing instead on the economy’s theoretical capacity to produce foreign currency through exports in order to facilitate debt repayment. The framework fails to incorporate social and political conflict or human rights constraints and overlooks the fact that countries such as Argentina are, above all, peripheral and dependent economies.
The fundamental constraint on debt sustainability involves not only fiscal considerations but also the underlying distributive matrix and living conditions of society. The sustainability of life is the political and social limit that determines the debtor’s willingness (and ability) to pay. Argentina’s current debt sustainability efforts, which refuse to recognize these limits, render life itself unsustainable by deepening the exploitation of the workforce, intensifying the exploitation of women’s reproductive and care work, and inflicting environmental harms.
First, debt sustainability conflicts with the sustainability of life by deepening the exploitation of the workforce. In dependent economies, lower labor productivity leads capitalist companies to compensate for the loss of value through labor super-exploitation. This dependent-economy labor appears as ‘disempowered’ labor because enterprises cannot earn sufficient profit when competing with firms in high-productivity core countries. As firms cannot compete through technology or economies of scale, they exacerbate the exploitation of workers to make up for this disadvantage. This involves increasing the intensity and duration of the working day and reducing wages below the cost of workers’ social reproduction. This exploitation most severely affects the most vulnerable sections of the working classes: young, racialized women.
The pressure to achieve macroeconomic sustainability, particularly through fiscal adjustment promoted by the IMF, exacerbates this form of super-exploitation. In order to facilitate a transfer of value towards capital by generating international currency to pay off creditors, the state forcibly reduces the consumption fund of the working classes, compelling them to cede a fraction of the value of their labor power to service the debt. This decline in working-class income is a direct manifestation of the fact that when debt repayment is prioritized, there is a concomitant deterioration in the living conditions of the population. Ultimately, this super-exploitation leads to labor capacity’s premature consumption—deteriorating health and reducing life expectancy—making workers’ lives more precarious.
Second, debt sustainability comes into conflict with the sustainability of life by intensifying the exploitation of reproductive and care work, often performed by women and feminized bodies. In 2018, the IMF formally included social safeguards in its debt agreements with Argentina. For instance, these safeguards required an increase in focalized social expenditures, especially in the Universal Assistance for Children and for Pregnant Women, if the economy failed to grow fast enough. The IMF also required Argentina to promote gender equity and women’s participation in the labor market. However, these provisions proved insufficient to protect Argentine women given the magnitude of the adjustment. When budget cuts were made, they reflected economic policies’ patriarchal bias.
In practice, Argentina’s debt sustainability strategy has involved cuts to public provision of goods and services in health, education, pensions, and child and elder care, programs which were essential to Argentine social reproduction. This contraction of social spending and transfers, especially as low-income households’ incomes have fallen, has intensified the demands on unpaid reproductive work. Women must manage the material reproduction of daily life with fewer resources, which translates to an unmanageable overload of work and increased exploitation. As Elson and Cagatay have argued, the state, in effect, assumes that women’s unpaid work will offset the adjustment. In this way, the risk of financial instability and default is transferred directly to the lives of the most impoverished women and their families.
Third, debt sustainability comes into conflict with the sustainability of life by inflicting environmental harm on dependent economies. The need to generate international currency to guarantee foreign debt repayment places exceptional pressure on dependent economies to increase their trade surplus. This obligation translates into a deepening of the primary and extractivist trend in exports. Extractivism is promoted as a way to obtain dollars through the exploitation of common goods, which are transformed into commodities. In Argentina, this has taken the form of unconventional gas and oil, mining, and concentrated corporate agriculture.
The case of Vaca Muerta shale gas and oil exploitation is a paradigmatic example of the increased exploitation of a common resource to meet Europe’s demand for gas. This extractivist project has had disastrous consequences: displacing territories claimed by Mapuche communities, contaminating groundwater and soil, and generating seismic activity that has damaged the homes of local populations. Likewise, since the mid-nineties, the production of genetically-modified seeds, especially soybeans, has become the primary use of Argentina’s fertile soil and the nation’s primary export commodity. The production of these seeds has expanded the use of agro-toxins, contaminating usable water and displacing communities across the country.
As I’ve argued elsewhere, extractivism is a form of super-exploitation of nature, in which capital appropriates natural commons (transformed into commodified natural resources) at a rate that exceeds nature’s capacity to replenish itself, further destroying the natural and social environment. The international prices of these raw materials do not reflect the real costs, both social (e.g., destruction of communities and their health) and environmental (e.g., water loss and pollution), of their exploitation. This resource plunder compromises the reproduction of life on a large scale. The development of extractivist initiatives, which subordinate a dependent country’s land to the exploitative demands of transnational corporations and central countries, does not reduce structural unsustainability; it intensifies instability at the expense of nature.
***
Rather than alleviate the structural constraints facing the Argentine economy, recent debt restructuring and new indebtedness to the IMF consolidated them, forcing a deepening of dependence. By relying on macroeconomic expectations that are inconsistent with the actual historical trends of the economy, these agreements’ attempts to ensure debt sustainability force the super-exploitation of productive and reproductive labor and the acceleration of extractivism, pushing social reproduction to unsustainable limits.
The violation of human rights and the destruction of nature are not mere externalities but are fully internal to a system that prioritizes creditors’ rights to collect over the dignified life of the Argentine people. We can think of human rights as expressing the limits imposed by social struggle on the reproduction of life. By violating these rights, the conditions under which life reproduces itself are destroyed. As long as life and human rights are not at the center of the analysis, “debt sustainability” is reliant on the overexploitation of labor and nature, and the debt can never truly be sustainable.
