Founder Editor Tazeen Akhtar..

 Tazeen Akhtar 

Q; Last month there were some reports in the media that Argentina is in financial crisis and What measures has your Government adopted to address this issue?

A; Let me start answering the first part of your question. Argentina is not facing a financial crisis, actually what I can say is that the economy has slow down a little bit. What Argentina is facing today is the consequence of a surprising intervention of  New York District Court Judge, that ruled in favor of a small group of bondholders of the Argentine Foreign Debt, causing a serious damage to my country that pushed Argentina to a Second Default few months ago. Let me give you a brief picture of what happened: The Current situation of the Argentine sovereign debt restructuring.

The default of the Argentine Republic in 2001 was  the biggest one in the world's financial history, largely exceeding 100 billion US dollars. Decades of over indebtedness and low growth left the country with a debt amounting to over 160% of its GDP, an unemployment rate close to 25% and over 50% of its population in poverty.

Without doubt, the most complex problem for the Argentine Government was to reach a deal with the thousands of holders of debt in default since 2001, amounting to 81 billion US dollars. But Argentina was successful in this regard. It reached an agreement for a voluntary exchange of defaulted instruments for new bonds.

The exchange offer was made in 2005 and again in 2010, finding acceptance among 92.4% of creditors. One of the keys to success was, as is customary in such transactions, the fact that both: the Argentinean legislation as well as the prospectus of the instruments issued, prevent the offering of better conditions to creditors who failed to accept the offer (the holdouts).

Neverthless 7.6% of bondholders did not accept the restructuring. The vulture funds that secured a ruling in their favour are not original lenders to Argentina. They purchased bonds in default at low prices after the swap, for the sole purpose of engaging in litigation against the country and making an enormous profit. They found a Judge in New York Thomas Griesa's that with his ruling orderered the payment of 1.5 billion dollars to be made on June 30, 2014

What the Judge Griesa's ruling really made, was to send with his irresponsible direction my country to a new default. This is so because if Argentina does pay the 1.5 billion, it will have to pay 15 billion in the immediate future. To make matters worse, under the laws of Argentina and the clauses governing the restructured instruments (RUFO), if the vulture funds were to be paid, all other bondholders that accepted in 2005 and 2010 the restructuring of the debt would demand equal treatment, involving an estimated cost of over 120 billion US dollars.


On the other hand, if Argentina does not pay the vulture funds, the Judge Griesa's ruling forbids Argentina to make the periodical payments to the 92.4% of the bondholders who did accept the restructuring.

This ruling threatens not only Argentina, but also any other country that may have to undertake a restructuring of its debts in the future. Under the domestic legislation of any country, when there is a suspension of payments and 66% of creditors or more agree to a deal, the rest are also obliged to accept.

The will of Argentina is clear: we expect a judicial decision that promotes fair and balanced negotiating conditions to resolve this protracted and difficult dispute that has affected, affects and will continue to affect the Argentine people due to the voracity of a minor group of speculators.

Q;  How this financial crisis have affected the  businessmen from Pakistan and other countries?

A; Regarding the Pakistani exporter’s observations things are a bit more complex because Argentina’s Policy for import and export has been changed and made stricter with the introduction of new measures. There is some misunderstanding, for sure, between private business enterprises. On the other hand is true that some imported items from Pakistan have had problems to enter into our market, but they should be solved on private basis with the Argentinean importers. Our Government is always ready to facilitate the solution of the problems. I don't contradict the existing of problems, but I say that we are ready to facilitate the solution.


Q; What is the status of both countries on regional conflicts?

A;  We are very thankful that Pakistan always had voted in favor of all the UN Resolutions that called for a peaceful solution and the resumption  of negotiations between Argentina and UK on the long dispute of sovereignty of the Malvinas Islands in the South Atlantic Ocean.

Pakistan's support and vote has been constant in its position regardless which Government is in power in Pakistan.

Same has been the stand and stance of Argentina on Kashmir dispute. My country voted in support of the UN Resolutions that are calling for a peaceful solution to this problem.

 In my opinion, dialogue is the best mechanism of diplomacy to solve the disputes among countries, before they reach to the final stage war. War should never be the option.