A mood of veiled optimism prevailed at the IMF/World Bank meetings that I attended last week in Istanbul. The usual crop of anti-globalization protesters and anarchists rallied outside the state buildings, but the event was mostly calm.

Emerging markets took center stage as countries like Brazil, formerly a frequent recipient of IMF funds, pledged a $10 billion loan to the fund, part of a total $80 billion coming from the BRIC(Brazil-Russia-India-China) nations. IMF Managing Director Dominique Strauss-Kahn stressed that the shift of 5% of the IMF’s votes to poorer countries was “key to making the fund more credible and legitimate.”

He also called for further measures to strengthen the Chinese RMB and address China’s massive trade surplus, and echoed an oft-repeated plea not to ‘squander the crisis’ by losing the cohesive, international action that characterized the response to the financial meltdown.

After-hours revelry saw the usual cocktail parties and dinners, but outside of the Turkish banks’ lavish galas, conspicuous consumption was down. Citibank – having received $45 billion from the US Government last year – seemed particularly conservative at its party in the Swiss Hotel.

Garanti Bank, a local institution, threw a great party at the Museum of Modern Art, and the association of Turkish Bankers had a wildly extravagant bash at the Feriye Lokantasin on the Bosporus.

Overall, the conference looked forward towards the prospects for recovery, rather than an ongoing or deepening recession.

Argentina
is negotiating with the IMF and with creditors in an attempt to re-enter
international credit markets. The country has been locked out of these markets
since its financial meltdown in 2001-2002, and the subsequent debt
restructuring in 2005 was disastrous for bondholders who got no more than 36 cents on the dollar.

Economy Minster Amado Boudou has hinted that Argentina
will re-engage with the IMF after meeting with a senior official, according to
the Wall Street Journal. He also emphasized that Argentina
intends to remain independent, accepting no conditions from outside parties. “”We
can accept (credit) without accepting conditions, and sitting down as equals at
all the tables in the world,” Boudou told the WSJ.

Regardless, it’s going to be a rocky road back to economic
respectability for the battered Argentine government. The Paris Club of creditors has been
particularly incensed with them in the past, and they will not accept an offer
like the 36-cent settlement of 2005. Nine years of accrued interest on
Argentine debt mean that lenders will expect at minimum of 45 cents more.