A nation long tied to the global lender tries again to rewrite its vows

A playground in the Villa 31 slum of Buenos Aires. Argentina has spent almost half of the past six decades under IMF supervision. (Erica Canepa for The Wall Street Journal)

BUENOS AIRES: Most countries have a historic villain. For Cuba, it is Uncle Sam. For some in the Middle East, it is Israel. Here in Argentina, many direct their rage at the International Monetary Fund.

Hating on the multilateral lender, which steps in to bail out indebted governments, is something close to a national sport in this country of 44 million.

Now, the IMF is back in the spotlight as Argentina's new leftist government wants to renegotiate the terms of an outstanding IMF loan, which requires the repayment of $44 billion over the next four years.

If the IMF won't play ball, says President Alberto Fernández, Argentina could choose to default--for the ninth time in its history.

"Our focus and priority is and has been to help Argentina recover from its difficult economic situation and pave the way for inclusive and sustainable growth," an IMF spokesman said.

Mr. Fernández partly owes his election victory to mistrust of the IMF, which lent money to his predecessor, conservative businessman Mauricio Macri, when his government came close to running out of money in 2018.

The loans, which have below-market interest rates, came with strings attached: Argentina had to try to balance its books with subsidy cuts and lower public spending.

For many in Argentina, that amounts to an unwarranted--and painful--intrusion into the economy.

"When Macri approached the IMF for money last year, my first thought was: It's like asking Dracula for a blood transfusion," said Juan Zysman, a photographer who drives a taxi to make ends meet.

Distrust of the IMF is widespread. It is the subject of a popular board game called "Foreign Debt, The Country In Play." There is a dark comic book titled "An Intruder in the Family," which features the villainous American financial adviser Francis Maelstrom Inverness, or FMI, the fund's Spanish initials.

For travelers and Argentines, there are postcards picturing a Latin America-shaped transfusion bag with the label: "Economic Plasma: Endless Debt." The blood type: FMI Negative.

The small Museum of External Debt at the University of Buenos Aires features charts showing Argentina's addiction to debt alongside photographs of finance ministers and deposed presidents who had leading roles in the country's rocky history with foreign creditors.

The IMF has a central place in exhibits, portrayed as a foreign institution with a large influence over Argentina's economic policy over decades.

A recent survey showed that 79% of voters opposed to Mr. Macri held a negative view of the IMF. In his inaugural speech on Dec. 10, Mr. Fernández said the fund's technocrats are partly to blame for Argentina being insolvent.

"We will not repeat the sad history of the missions of reckless technicians who promise plans that can't be fulfilled and who take decisions that later end up compromising the fate of millions of Argentines," he said.

On a recent Saturday afternoon, hundreds of residents of the notorious Villa 31 slum in central Buenos Aires gathered to watch "Fondo, the Same Recipe Again," a documentary critical of the IMF. Fondo in Spanish means both fund and bottom, as in hitting rock bottom.

Organizers set up a projection screen and a grill for choripanes, Argentina's popular sausage buns. A large banner read: "The debt is with the people, not the IMF."

"We are Latin America's most experienced country when it comes to dealing with the IMF," said Alejandro Bercovich, the television reporter who directed Fondo. "More than a lender, it's an army of ideological occupation."

Only the late U.K. Prime Minister Margaret Thatcher briefly matched the IMF as Argentines' favorite foreign villain during the Falklands War of 1982, said Nacho Marutian, an Argentine sociologist who works as a volunteer at the Museum of External Debt.

The dysfunctional relationship between the IMF and Argentina goes back to shortly after the lender was created in 1945 to help ensure global financial stability after World War II. Today, 189 nations form its membership.

Argentina has been the fund's biggest client, with more than 20 aid packages of low-interest loans. It has borrowed some $87 billion since the 1950s, which amounts to hundreds of billions when adjusted for inflation. As a result, the country has lived almost half of the past six decades under IMF supervision.

"That's why Argentina is a country in which the IMF is known by everyone, even by taxi drivers," said Héctor Torres, a senior fellow at Canada's Centre for International Governance Innovation and former IMF executive director.

Argentina obtained its first IMF loan after charismatic nationalist Gen. Juan Perón was deposed in a military coup in the 1950s. Ever since, his populist Peronist movement that dominates Argentine politics has used the lender as a whipping boy for policy mistakes.

The cycle goes something like this: A government overspends, leading to an economic boom; then comes a reckoning, and a desperate government turns to the IMF, which provides money in exchange for spending cuts; the ensuing drop in economic activity is blamed on the lender, rather than the profligate government.

Some question why the IMF, facing such scorn, continues to do business with the South American nation.

"Why does the IMF continue to give money to a country that never fulfills its commitments, doesn't return the money and also hates the IMF? Giving money to Argentina is a form of masochism," said Loris Zanatta, an expert on Latin American populist movements at Italy's University of Bologna.

Harvard University economics professor Kenneth Rogoff, who served as chief economist for the IMF between 2001 and 2003, said Argentina is "pretty much the only major country to collapse" in recent times of low global interest rates. "It's like a man drowning in one half inch of water."

The IMF has had honeymoons with reformist presidents such as Carlos Menem in the 1990s, who privatized state-owned companies and contained inflation by linking the monetary system to dollar reserves, a policy that eventually failed. The fund also provided financial assistance to the ruthless military junta that seized power in 1976, and in the 1980s after a return to civilian rule it provided backstage support for President Raul Alfonsín's ill-fated launch of a new currency, the austral.

But it faced open hostility during the 12-year rule of the late Peronist President Néstor Kirchner and his wife Cristina that began in 2003. Cristina Kirchner is back as vice president under Mr. Fernández.

For Mohammed El-Erian, senior adviser for Gramercy Funds Management LLC, the situation is reminiscent of Agatha Christie's "Murder on the Orient Express," because almost everyone involved has had a hand in Argentina's ongoing economic debacle.

"We've seen this movie before, it ends badly and actors do exactly the same thing over and over again," he said. "How can you get out of it?"