Archive for 30 noviembre 2015


30 noviembre, 2015




















By the Editorial Board
27 November 2015

Even by the operatic standards of Argentine politics, the upset victory of Mauricio Macri, the mayor of Buenos Aires, on Sunday was a stunner that is likely to set in motion a transformational era at home and in the region. Long considered the underdog, Mr. Macri narrowly beat Daniel Scioli, the Peronist candidate endorsed by President Cristina Fernández de Kirchner. Mr. Macri’s motto, ”Let’s Change,” gained traction as Argentines soured on Mrs. Kirchner’s bumbling management of the economy and abrasive style.

Mr. Macri’s most urgent task is to untangle the web of economic controls and unsustainable subsidies established by Mrs. Kirchner and her husband, Néstor Kirchner. Mr. Kirchner governed from 2003 until 2007, when his wife was elected. The couple dug Argentina out of an economic crisis, buoyed by a commodities boom, and adopted protectionist policies popular with the working poor.

Reforming the stagnant economy will be painful in the short run, but could make Argentina more attractive to foreign investors. Inflation has been soaring in recent years and the country is running low on foreign reserves. Borrowing abroad to make reforms palatable will be tough until Argentina manages to restructure its foreign debt.

Mr. Macri needs to level with Argentines about the depth of the economic problems, which the Kirchners went to great lengths to hide, and offer a sensible path forward. Weaning Argentina from its decades-long habit of spending more than it earns will require deftness, because Peronists and other opposition parties that dominate Congress are likely to stand in the way of reforms.

On foreign policy, Mr. Macri could have an immediate and profound impact. The Kirchners aligned Argentina with the leftist flank in Latin America, supporting authoritarian leaders in Cuba and Venezuela, and cultivated strong ties with China, Russia and Iran. Mr. Macri has signaled he intends to chart a new course by expanding trade with the United States and Europe. American officials are eager for cooperation on law enforcement and energy policy and are hopeful the president can be an ally, or at least a reasonable actor, in regional diplomacy.

On Monday, Mr. Macri took a bold and principled stance against Venezuela’s despotic leader, Nicolás Maduro, vowing to seek Venezuela’s ouster from the regional trade group Mercosur if Venezuela keeps opposition politicians in prison. By taking on Mr. Maduro so forcefully in a region where leaders, by tradition, tend to air grievances privately, Mr. Macri could galvanize the political opposition in Venezuela in the leadup to the Dec. 6 parliamentary election there and embolden other leaders to isolate Mr. Maduro. That would be healthy for a region where entrenched leaders and systems of patronage have made victories like Mr. Macri’s relatively rare lately.

By Jonathan Gilbert
29 November 2015

BUENOS AIRES — Diana Sacayán was found tied up in a 13th-floor apartment in Buenos Aires in October, stabbed to death. A month earlier, Marcela Estefanía Chocobar, 26, was decapitated and her body dumped on a vacant lot in Río Gallegos, in Patagonia. Also in September, in Santa Fe, a city on Argentina’s Pampas lowlands, the corpse of Fernanda Olmos, 59, was discovered on her bedroom floor, a plastic bag pulled over her head. She had also been stabbed.

The unsolved killings of transgender women in recent weeks have jolted Argentina, prompting soul-searching in a country that has introduced some of the most liberal civil rights legislation in Latin America, but that critics say remains mired in conservative and macho attitudes toward gender identity.

”Society hasn’t changed in the slightest,” said Andrea Cantero, 29, a hairdresser who until last year was called Andrés. ”We’re people like anybody else,” she added, ”but I feel it was a message to say, ‘You’re worthless.’ ”

Ms. Cantero, who says she is regularly insulted and threatened over her gender identity, spoke at a recent march of gay and transgender Argentines. She had tied her hands and ankles with rope, painted blood stains on her skin and written on her chest, ”Liberate us from violence.”

At the march, protesters held handmade signs denouncing the murder of Ms. Sacayán, 40, one of the most prominent transgender activists in Argentina. She led a group that fights discrimination against transgender people and was a regional representative of the International Lesbian, Gay, Bisexual, Trans and Intersex Association. On the street, someone had stenciled graffiti that read, ”Basta de travesticidios,” or ”Enough transgendercide.”

In recent years, legislators have passed a series of laws to protect the rights of transgender and gay people in Argentina. Although conservative attitudes on social issues persist and the Roman Catholic Church remains influential, the government of President Cristina Fernández de Kirchner has pushed for greater equality, seeing the issue as a crucial human rights concern. In 2010, Argentina became the first country in Latin America to allow same-sex marriage.

Three years ago, legislators passed a groundbreaking gender identity law that allows people to change their gender without a psychiatric diagnosis or surgery. It also requires state health care and private insurers to provide hormone therapy and gender reassignment surgery.

In Buenos Aires Province, Argentina’s most populous, lawmakers passed a bill in September that requires public sector employers to allocate 1 percent of jobs to transgender workers.

About 6,000 people, including a 6-year-old boy, have changed their gender on official documents in the last three years, compared with a handful before the 2012 law, said Esteban Paulón, president of the Argentine Federation for Lesbian, Gay, Bisexual and Transgender People.

Government ministries have in some cases supported transgender people searching for jobs by subsidizing wages and helping arrange medical attention.

But despite these advances, many challenges remain.

The gender identity law has been carried out slowly, critics say, noting that the provision for hormone therapy and surgery was only enforced this year. And few cities have doctors trained to perform reassignment operations. Similarly, as activists like Ms. Sacayán hailed the provincial labor law, doubts were being voiced in some quarters, like trade unions, about whether it would ever be respected.

In addition, hostile and uninformed attitudes on gender equality remain commonplace, according to many transgender people. In 2011, Susana Giménez, a popular television host, offered a glimpse of these attitudes when she said on air that she would rather die than be lesbian.

Silvia Augsburger, a former congresswoman who drafted the gender identity law, said, ”We have passed hugely important laws so that the community can express itself.” But, she added, ”as a state, we still don’t have the resources to guarantee them lives free of discrimination.”

A 2014 report by the National Institute Against Discrimination, Xenophobia and Racism estimated that 40 percent of Argentines held discriminatory attitudes toward transgender people.

A survey of nearly 500 transgender Argentines by the Huésped Foundation, published last year, said that discrimination had diminished in some contexts, like in schools and medical clinics, since the 2012 gender identity law was passed. But it also highlighted the challenges that transgender people face.

More than 60 percent of the people interviewed were prostitutes, pointing to the difficulties transgender people have finding other employment. A majority had not finished high school. Transgender life expectancy is 35, according to the foundation. In the general population in 2013, according to the World Health Organization, it was 73 for men and 80 for women.

”We are still victims,” said Daniela Ruiz, the founder of Artetrans, a transgender art cooperative.

Gay and transgender Argentines are now pushing for modifications to an existing law that targets traditional forms of discrimination, like those based on religious or political beliefs. They want provisions that would explicitly criminalize discrimination against transgender people.

Some are also urging transgender people to break out from the safety of their own community, which might speed up societal acceptance. ”Because they don’t integrate much, prejudices persist,” said Cristian Reches, 39, a gay university student who was at the march. ”There’s responsibility on both sides.”

Gender equality issues were also a factor in the campaign leading up to the presidential election on Nov. 22, won by Mauricio Macri, an opposition leader.

In the final weeks of the race, Daniel Scioli — the governing party’s candidate — and his supporters, including Mrs. Kirchner, sought to scare voters away from Mr. Macri, seen as socially conservative. Mr. Macri once called homosexuality a ”disease” and, last year, defended the harassment of women. ”Deep down, all women like being catcalled,” he told a radio station. ”There can’t be anything nicer.”

But Mr. Macri, currently the mayor of Buenos Aires, said this month that he would not thwart the gender rights movement. ”We have respected minority rights,” he said of his municipal government, which has supported same-sex marriage.

Despite the murders and the complaints about enduring discrimination, there are also signs that attitudes are changing.

In Chivilcoy, a city of 64,000 that has drawn attention for efforts against gender discrimination, a municipally funded medical center for transgender people opened last year, one of several similar facilities nationwide.

The center provides services like hormone and psychological therapy, vaccinations and speech coaching for transgender people to alter the pitch of their voice.

”When we would face up to our families, we were thrown out of our homes,” said Victoria Ocampo, 40, a transgender nurse at the center. ”But that’s changing now.” She recalled two teenagers grappling with gender dysphoria who recently turned up at the center with their parents.

”I focus on the progress,” Lizy Tagliani, a transgender woman in her 40s who is a hair stylist and a local TV celebrity, said as fans huddled around her. ”I don’t worry about what’s yet to be achieved. I always try to see the glass half full.”

By Benedict Mander in Buenos Aires
November 29, 2015

When Alfonso Prat-Gay took charge of Argentina’s central bank in 2002 at the age of just 37, the economy was still reeling from a meltdown less than a year earlier that saw what was at the time the biggest sovereign debt default in history.

In almost two years at the helm of the central bank, the former JPMorgan currency strategist not only oversaw a huge drop in inflation, but he also successfully unified the peso that had splintered into an array of quasi-currencies after bankrupt regional governments had been forced to issue scrip to pay their bills.

More than a decade later, Mr Prat-Gay once again finds himself with the task of fixing an economy afflicted with soaring inflation and a chaotic currency regime — this time as finance minister, after being picked by Mauricio Macri, Argentina’s centre-right president-elect, to mastermind the economy’s revival when he takes power on December 10.

Mr Prat-Gay now faces an additional challenge: fathoming the depths of Argentina’s economic woes given that figures published by the state statistics agency have become widely discredited.
“Truth is a pillar of what we have to offer. The sooner we let the mask drop, the better off we will all be,” Mr Prat-Gay told the Financial Times, arguing that the problems must be tackled in the right order. “Sequencing is at the heart of the matter,” he says.

Describing himself as a Neo-Keynesian, Mr Prat-Gay’s first move will be to remove strict capital controls in place since 2011 and to unify the currency, which Mr Macri has promised to do on his first day in office.

That will lead to a de facto devaluation, since the official exchange rate of 9.6 pesos to the dollar will be discarded, with the new exchange rate likely to be closer to the rate of about 14.5 pesos used in certain stock market transactions.

Martín Redrado, who replaced Mr Prat-Gay as governor of the central bank, said his predecessor’s success in the early 2000s was a “great achievement”. But he pointed out that the difference now was that the central bank badly needed to rebuild its reserves which it has burnt through as it tries to prop up the peso.

Central bank reserves have fallen by half to less than $26bn since his resignation in 2010 after a spat with the government over the use of reserves for paying debt. But some economists argue that liquid reserves are close to zero.

Born into the Buenos Aires elite, Mr Prat-Gay was educated at the same secondary school as Mr Macri, who is from one of Argentina’s richest families. Speaking flawless English, he later studied at the University of Pennsylvania before spending eight years with JPMorgan in New York, London and Buenos Aires.

Although he was nominated as Euromoney magazine’s central banker of the year in 2004, Mr Prat-Gay’s term was not renewed owing to clashes with the then president, Néstor Kirchner, over the independence of the central bank. He went on to set up an asset management company in 2005, before being elected to congress in 2009.

Perhaps the greatest concern is that Mr Prat-Gay could trip up in the remorseless world of Argentine politics. He has had to fight allegations of tax evasion, which he has demonstrated to be false; and in the run-up to the elections a video of him criticising Argentines’ weakness for electing little-known “caudillos” from far-flung rural provinces was circulated on YouTube, prompting accusations of elitism.

“On a technical and intellectual level [Prat-Gay and his team] have certainly got what it takes — let’s just hope that they do from a political perspective too,” says Mr Redrado, highlighting Mr Macri’s lack of a majority in congress as a major challenge. “The honeymoon is going to be short.”

Despite concerns that a devaluation would lead to a spike in inflation, investors and analysts are optimistic that Mr Prat-Gay has the skills to manage the complex transition. After all, at the central bank he presided over a fall in inflation from 40 per cent to 5 per cent.

“Alfonso is a pragmatist, and one of the smartest people around,” says Daniel Melhem, managing partner of Knightsbridge Partners, an investment management firm in Buenos Aires. “His tenure at the central bank was at a time of great economic distress, however he immediately brought stability and grew its reserves,” he adds.

“He is one of the most brilliant economists of his generation,” says Andrés Borenstein, BTG Pactual’s chief economist in Argentina, naming a handful of other Argentine economists, including Federico Sturzenegger, who Mr Macri has earmarked to head the central bank.

By John Paul Rathbone and Benedict Mander
November 27, 2015

Mauricio Macri sounded peeved but unsurprised when he described his meeting this week with Cristina Fernández, Argentina’s outgoing president. “It wasn’t worth it,” was his curt summary of their 40-minute conversation at the presidential residence; a comment that left his interviewers from a local television news station flabbergasted.

Two days earlier, the country’s voters had chosen Mr Macri as their new president in a surprise election that promises to turn politics in Argentina, and maybe even across Latin America, on its head. The swing from left to right is striking.

Out goes Ms Fernández, a sharp-tongued populist who models herself on Eva Perón. In comes Mr Macri, a 56-year-old millionaire who says Ayn Rand’s The Fountainhead is the book he would take to a desert island, and whose campaign promise to change Argentina and reinsert it into the modern global economy contradicts almost everything Ms Fernández stands for.

She invited Mr Macri for a private discussion about the transition. There was much they could have talked about. The commodity price crash and the gloomy prospects of Argentina’s closest trade partners, Brazil and China. Or how to co-ordinate the handover on December 10. Instead, their conversation focused on the event’s ceremonial niceties .

“Was that it?” asked the dumbfounded journalist. “That was the conversation we had,” replied Mr Macri. “And that is how we left it.”

Such a lack of co-operation marks an inauspicious start for the transition, especially as Mr Macri needs all the help he can get. For starters, South America’s second-biggest economy is a shambles. Bereft of hard currency, it is isolated from international capital markets, ravaged by inflation of more than 20 per cent. It has an overvalued exchange rate, with the peso hovering on the brink of a devaluation. The promise of “change” that won Mr Macri the election will be hard to effect.

Mr Macri is the oldest child of one of Argentina’s most prominent industrial tycoons, Italian-born Franco Macri, now 85. The latter has long had a relationship with Boca Juniors, Argentina’s most popular football club; Macri junior became president of the team in 1995.

Mr Macri found a political calling at 32, after rogue police officers kidnapped him, stuffed him into a coffin and re­leased him a fortnight later after his father paid a ransom. “It’s not an experience I would recommend,” Mr Macri told the Financial Times last month.

Two decades later, investors are applauding his aim to resuscitate what a century ago was one of the world’s most prosperous economies by cutting trade tariffs and ending a decade of heavy-handed state intervention. In the past month alone, the local stock market has soared 41 per cent.

Mr Macri has made a good start, assembling a technocratic team that includes Alfonso Prat-Gay, a respected former central bank chief, as finance minister. He has made an about-face on foreign policy, saying he wants to repair relations with the US and eject socialist Venezuela from a regional trade group because of its rights abuses. Domestically, he has promised a more conciliatory approach than Ms Fernández’s confrontational style, handing out Nelson Mandela’s biography to his cabinet.

Even so, he faces formidable obstacles. As his coalition lacks a majority in Congress, Mr Macri will be as weak a leader as any president since the return of democracy more than 30 years ago. Moreover, the last time that Argentina embraced free-market economics was in the 1990s under the freewheeling presidency of Carlos Menem.

That experiment ended in 2001 with a $100bn debt default and disastrous devaluation that has scarred the Argentine psyche. Mr Macri’s aloof mien and playboy lifestyle — his second wife is a model, his third a fashion designer — will make the bitter economic medicine Argentina will probably have to swallow even more unpalatable. In a telling comment, the footballer Diego Maradona, who found early fame at Boca, described him witheringly as: a “guy [who] does everything wrong. He’s a rich kid who knows nothing . . . he never even polished his shoes.”

Still, Mr Macri is no neophyte. His 12-year leadership of Boca is now a Harvard Business School case study: under his leadership, the finances of the near-bankrupt team were revived and the club won a string of trophies.

While at Boca, Mr Macri launched his political career — first as the founder of a new political party in 2003; next, as mayor of Buenos Aires in 2007. He was re-elected as mayor in 2011.

Mr Macri has a penchant for flamboyant 1970s pop stars: Rod Stewart and Freddie Mercury are favourites. Yet his record as mayor, akin to London’s Boris Johnson but without the jokes, is res­pectable. Despite lacking a majority in the local legislature, he created a police force that enjoys public trust, invested in infrastructure and installed widely used bicycle lanes.

Yet it is Boca, Mr Macri says, that taught him most, and he compares the presidency to a groundsman: someone who ensures the grass is neatly clipped and the lines tidily painted so the teams can play by “clear rules of the game”.

There is little tidy or clear, though, about modern Argentina, and as the recession continues to bite Mr Macri’s honeymoon will be brief. As one aide commented to the FT this week: “To say we feel swamped may be the understatement of the year.”

By Benedict Mander, Elaine Moore and Miles Johnson
November 26, 2015

Market gains must be franked by new ‘pro-investment’ government

After massive gains in Argentine stocks and bonds over the past two years, investors are beginning to wonder just how much longer the rally can continue as a new government takes power.

Storied hedge fund investors from George Soros to Dan Loeb have been piling into Argentine assets, speculating that better times await Latin America’s third-largest economy once its fiery nationalist leader, Cristina Fernández, quits power.

At last that moment has arrived. Better still, the market’s preferred candidate, the centre-right Mauricio Macri, clinched victory in presidential elections on Sunday. He promises to put an end to more than a decade of protectionism and state intervention, ushering in a new era of pro-investment policies.

“Argentina has an unparalleled opportunity,” says Emily Fletcher, co-manager of BlackRock’s Frontiers Investment Trust, who argues that Mr Macri’s proposed reforms could finally allow Argentina to realise its true economic potential.

“While we wouldn’t be surprised to see some profit-taking in the short term, the long-term outlook for Argentina is brighter than it has been for some time,” she adds, pointing out that the MSCI Argentina Index rose by 45 per cent in October alone.

Indeed, the tiny and volatile Buenos Aires stock exchange — whose market capitalisation is similar to a large US company — has fallen since Mr Macri’s victory, although Argentina’s heavily-traded bonds have registered slight gains.

Prices for the bonds that were issued by Argentina following its 2001 default have nudged upwards this week, with the yield on debt due to be repaid in 2033 falling eight basis points to 6.96 per cent since the start of the week. That comes after prices for the bond have more than doubled in the last two years to 114.5 cents on the dollar, up from just 51.5 cents in mid 2013.

Alejo Costa, head strategist at Puente, an investment bank in Buenos Aires, thinks that bond yields could continue to fall over the next few weeks as investors react positively to initial announcements by Mr Macri.

“But eventually we will need to see concrete results for the rally to continue,” says Mr Costa. “Soon investors are going to have to start to face up to reality,” he added, pointing to serious challenges facing the next administration.

Argentine stocks and bonds

First, Mr Macri will inherit a toxic economic legacy from Ms Fernández that will require immediate action. Faced with an acute shortage of foreign exchange reserves, Mr Macri has promised to remove strict capital controls on his first day in office.

He has also pledged to move swiftly to unify Argentina’s overvalued official exchange rate, which will effectively mean devaluing the currency. That, in turn, could spur the inflation rate, which is already one of the highest in the world thanks to the wholesale monetisation of a widening fiscal deficit.

Nevertheless, Mr Costa argues that the next government’s biggest problems are in fact political. Lacking the majority in congress that is needed to pass legislation, he warns that Mr Macri could run into grave governability issues.

“The economic problems are extremely serious and urgent. But even if you have the skills to solve them, that’s no use without political willingness,” he said, arguing that most of the major reforms planned by Mr Macri require congressional approval.

One of the most important is the resolution of a long-running legal dispute with a group of so-called “holdout” US hedge funds that has blocked Argentina’s access to international capital markets since its 2001 sovereign debt default.

Although credit rating agency Moody’s raised Argentina’s credit outlook to positive on the back of expectations that the new administration would seek to put an end to the saga, uncertainty about the success of this plan prevented an outright credit upgrade.

Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, points to factors beyond Argentina’s control that are also playing against Mr Macri chances of success. He lists the rapid slowdown of China’s economy, the crash in commodity prices, and the imminent start of the US Federal Reserve’s monetary tightening cycle.

“Macri couldn’t be assuming the presidency at a worse time from an emerging market sentiment standpoint,” says Mr Spiro. “This makes the implementation of economic reform in Argentina all the more difficult — but also all the more urgent.”

Such concerns explain why Jan Dehn, head of research at Ashmore, worries that Mr Macri could end up like other well-intentioned reformist presidents in the region unable to overcome tough circumstances. “The risk is clearly that Macri becomes to Argentina what [Vicente] Fox was to Mexico: an ineffective breath of fresh air,” he says.

By Daniel Lansberg-Rodriguez
November 25, 2015

His victory shows change is possible through the ballot box, writes Daniel Lansberg-Rodriguez

This is how socialism ends, not with a bang but with a squeaker. Despite a commanding lead during the run-up to Sunday’s presidential run-off election, in the end conservative challenger Mauricio Macri’s victory came down to only 200,000 votes in a nation of more than 40m. The defeat of Cristina Fernández’s political machine has prompted euphoria in much of Buenos Aires. Once it dies down, the president-elect will have his work cut out.

In democratic Argentina, non-Peronist presidents are the rarest of birds; none has finished a term in office. Mr Macri does not command a majority of Senate seats (although he can block hostile legislation). He has relatively little support among Argentina’s powerful provincial governors.

Meanwhile, much like Juan Domingo Perón, whose style shifted from militant nationalism to populist socialism, Peronism is amorphous, more patronage than ideology. It will recover.

Mr Macri may need time to transform the economic wasteland he inherits from predecessors who were happy to default on their country’s debt and shield inefficient industries from competition. But the effects of his victory may be sooner felt outside Argentina.

As the socialist tide in Latin America has receded, dragged back by the death or retirement of its charismatic leaders and the turning of the commodity cycle, it has left many a bloated government high and dry — in Brazil, Venezuela and Chile as well as Argentina. Still, Kirchnerism is the first to expire.

200,000 Macri’s victory came down to this number of votes

As the largest Hispanic country in South America, Argentina casts a sizeable shadow, and Mr Macri has promised to re-engage with the US and strengthen ties with the EU. Just as the rise of Hugo Chávez in Venezuela helped bring populist movements to power across the continent, Argentina’s choice of a market-friendly pragmatism may galvanise opposition movements elsewhere.

In Venezuela’s legislative elections next month, Mr Macri’s victory has shown a nervous electorate that real change is possible through the ballot box. There is even a remote chance it might strengthen the resolve of Brazilians seeking to impeach Dilma Rousseff, or persuade Bolivians that there can be workable alternatives, ahead of February’s referendum on scrapping term limits for Evo Morales.

Beyond what he represents, the importance of Mr Macri lies in what he can do. The past two decades has seen the proliferation of supranational organisations in South America, which has weakened US influence over the sovereign affairs of their members. This, though, has led to an erosion of values. A code of silence has prevailed as like-minded nations refused to call out one another on the chipping away of democratic protections, free media and human rights.

Nowhere is this as visible as in Venezuela, now governed by Nicolás Maduro, a gaffe-prone Pierrot who succeeded Mr Chávez and displays a penchant for collecting political prisoners. Mr Maduro is the most visible symptom of the region’s troubling slide towards authoritarianism.

Mr Macri invited Lilian Tintori, the wife of jailed Venezuelan opposition leader Leopoldo López, as guest at his victory speech. He has promised to invoke a “democracy clause” and suspend Venezuela from the Mercosur trade bloc during a summit in Paraguay, days after he takes office.

There might be costs: all but one of Mercosur’s other voting members are allied with Mr Maduro, and Brazil has already made its opposition to the suspension clear. Standing up to Mr Maduro would be worth it. It is the one campaign promise that Mr Macri can deliver unilaterally. Moreover, it would signal to the US and the EU that Mr Macri is the future and that the future is bright.

The writer teaches Latin American business at the Kellogg School of Management

By Benedict Mander in Buenos Aires and John-Paul Rathbone in London
November 25, 2015

It is a measure of the challenges facing Mauricio Macri as Argentina’s president-elect that on the eve of his electoral victory, as champagne cooled in the fridge and most Argentine minds were elsewhere, the central bank issued a stealthy decree enabling it to raid bank deposits.

In a bid to bolster precariously low foreign reserves, the institution ordered Argentine banks to sell half their dollar assets at an unfavourable exchange rate. For Mr Macri’s camp it was jut another reason why central bank chief Alejandro Vanoli has to go.

“The central bank is our most urgent problem,” said Federico Pinedo, a leading congressman for Mr Macri’s Pro party, who has filed a legal complaint against Mr Vanoli that led to a police raid on the bank last week.

In addition, though, the move went to the heart of the most pressing problems Mr Macri faces when he assumes the presidency on December 10: what to do about Argentina’s overvalued exchange rate and how to best dismantle capital controls.

Few issues are more divisive in a country where people look to the dollar as a store of value and where the outgoing government of Cristina Fernández has used every trick in the book to prop up the Argentine peso in order to suggest all is well.

“If you look at the numbers, which do not lie, they clearly show that when it comes to the economy, the government of Cristina Fernández did little good,” said Luis Secco, an Argentine economist.

Leaving aside Mr Vanoli’s legal problems, the broader fix that Argentina’s central bank is in is plain to see — especially as Mr Macri has pledged to dismantle its system of currency controls on “day one” of his presidency in a bid to restore market confidence.

The official exchange rate is 9.6 pesos to the dollar, but in the black market it trades at about 15. To support the official rate, the central bank therefore needs to sell dollars for pesos. However, it lacks sufficient dollars to do so indefinitely.

“The appreciated peso and exchange rate controls are choking economic growth,” Pilar Tavella and Sebastian Vargas, analysts at Barclays, said in a note to clients.

CHART: Argentine peso against the dollar

The logical alternative is to devalue — especially as the currency of Brazil, Argentina’s biggest trade partner, has fallen 45 per cent against the dollar over the past year, while the peso has dropped just 14 per cent.

The peso’s devaluation “is one of the most anticipated in Argentina’s history”, said Mr Secco, who argued that current exchange rate policy is unsustainable given hard currency reserves at an almost 10-year low.

According to the central bank, reserves are less than $26bn. But Nicolás Dujovne, an economist, said liquid reserves are just $2.7bn. Moreover, these are falling “dangerously” fast, dropping more than $1bn in November.

CHART: Argentine currency reserves fall

This is the backdrop to two recent central bank moves.

One is the November 21 order that commercial banks must sell half their dollar holdings at the official rate. Mr Dujovne estimated the move, which recalls the government’s 2008 nationalisation of pension funds, could add $1.2bn to reserves.

The other has been the central bank’s attempt before the election to prop up the official exchange rate by selling about $17bn of future dollar contracts.

The scheme, under which investors can buy dollars six months ahead for about 11 pesos to the buck, essentially guarantees healthy profits if there is a devaluation before then. That has produced almost “unlimited demand” from investors, said Mr Pinedo.

As a way of propping up the peso, though, this also virtually guarantees large losses for the central bank. Hence the legal complaint lodged against Mr Vanoli, who has been charged with damaging the national patrimony by selling futures at an artificially low rate.

At his first press conference as president-elect, Mr Macri asked Mr Vanoli, who has headed the central bank since October 2014, to resign.

Mr Vanoli has refused to step down before his term officially ends in 2019, saying: “You don’t appoint someone because they want a central bank that’s at the service of a devaluation.”

The central bank’s complications go further still. Lacking reserves, economists say it will be difficult for the incoming government to remove capital controls and avoid the exchange rate “overshooting” to a much weaker level. That, in turn, would fuel inflation already running at more than 20 per cent.

In addition, Argentina’s racing inflation is due to a collapse in the independence of the central bank, which has been forced to print money to finance a fiscal deficit estimated at 7 per cent of gross domestic product.

Although Mr Macri insists he wants to remove capital controls and unify the exchange rate, there is disagreement within his camp as to how fast the economy should be opened after more than a decade of isolation from international markets.

That, plus the political fallout of a sudden move and the possibility of other financial time bombs lurking in the vaults, explains Mr Macri’s call for “patience” on Monday when asked about his precise economic plans. “We really don’t have good information. We still don’t know [the exact situation we are inheriting],” he said.

By Raymond Colitt, Anna Edgerton and Charlie Devereux
November 30, 2015

* Macri beat Argentina’s ruling party candidate in Nov. 22 Vote
* President-elect pledges market friendly policies, freer trade

President-elect Mauricio Macri is pledging to turn Argentina’s economic and foreign policy on its head, introducing market-friendly and free-trade measures — a nail in the coffin of the economic populism that has dominated much of South America for a decade.

Macri, a 56-year-old wealthy businessman, has said he will abandon currency controls, cut subsidies, embrace closer ties with open economies of the Pacific Alliance, and seek to oust socialist Venezuela from the regional trade block Mercosur, just about three years after it won entry.

Leftist leaders throughout the region are losing support as money for their generous social programs is running out with the end of the commodity boom, said Riordan Roett, director of Latin American Studies at Johns Hopkins University’s School of Advanced International Studies in Washington. Venezuela’s Hugo Chavez and Brazil’s Luiz Inacio Lula da Silva no longer bestride the continent, propounding a new form of socialism for the 21st century and baiting the U.S.

“The populist left is marching out the door,” said Roett by phone. “They all rode on this commodity boom beginning in the early 2000s, misspent it, didn’t invest it. Now there’s no money.”

Argentina will post its biggest fiscal deficit in about three decades this year, while Brazil’s widens to a record. Venezuela doesn’t even report its fiscal balance any longer as its economy slips into chaos.

Good News

The shift to more orthodox policies is good news for business, said Michael Shifter, head of the Inter-American Dialogue in Washington.

Macri spoke by phone with President Barack Obama Wednesday to discuss trade and the energy sector, while agreeing to strengthen investment links with the U.K. in a separate call with Prime Minister David Cameron. Current President Cristina Fernandez de Kirchner had poor relations with the U.S. and worse still with the U.K.

Macri has also said he will push the Mercosur to move along in trade talks with the European Union.
In Brazil, the shift in policy means the government is turning to private and foreign investors to help finance infrastructure projects. In an effort to help shore up public accounts the government last week sold the rights to operate 29 hydro-power plants, raising 17 billion reais ($4.4 billion) from bidders including China’s Three Gorges Corp.

Even Bolivia’s Evo Morales, who seized foreign-owned gas fields in 2006 and maintained his anti-capitalist rhetoric after winning a third term last year, has shown signs of embracing private capital. In October he was courting investors in New York to lure hydrocarbons and mining investment.

Tread Carefully

Still, don’t expect a return to the kind of economic liberalism the region adopted during the so-called Washington Consensus in the 1980s and 1990s, when import tariffs were slashed, state assets sold off and industries deregulated, said Shifter.

“The new leaders coming in, like Macri, politically can’t afford to go back to the pure market formulas of a couple of decades ago and reject the social policy advances that have been made,” said Shifter.

“They’re going to have to accept them because people expect them to continue — if not there could be a backlash.”

Faced with the fiscal shortfall, Brazil’s President Dilma Rousseff is unwinding tax breaks, cutting spending and lifting price caps on fuel and energy as the budget deficit balloons. In response, her disapproval rating has surged to the highest of any Brazilian head of state.

The only large economy in South America bucking the trend is Venezuela, where President Nicholas Maduro is clinging to a myriad of stop-gap economic policies including multiple exchange rates and price controls to buffer the impact of the plummeting price of oil, its main export item. Yet even here change may be on the horizon. Polls show the opposition is set to obtain a majority in December congressional elections for the first time in 16 years as shortages spread to everything from toilet paper to medicine.

Mercosur Debate

Macri’s first point of conflict may be his pledge to oust Venezuela from Mercosur. Diosdado Cabello, president of Venezuela’s National Assembly, has already referred to Macri’s election as an “historic mistake” and warned him against meddling in the South American nation.

Macri will also seek closer ties with the more open economies of the Pacific Alliance –Mexico, Chile, Colombia and Peru — which have avoided recession following the slump in commodity prices. That more open attitude will certainly include closer ties to the U.S.

“There is a sense that there are changes afoot in the region, that the old kind of ’blame the U.S., run into the arms of Beijing and hope for eternally high commodity markets’ doesn’t cut it anymore,” said Eric Farnsworth, Vice-President of the Council of the Americas.

By Charlie Devereux
November 28, 2015

* Soybean export tariff to be lowered from 35 percent on Dec. 10
* Tax on corn, wheat, beef and sunflowers completely eliminated

Argentina will reduce its tariff on soybean exports by five percentage points, to 30 percent, when President-elect Mauricio Macri takes office, Clarin reported, citing designated Agriculture Minister Ricardo Buryaile.

The new government also will fulfill electoral pledges to remove tariffs on wheat, corn, beef and sunflowers from Dec. 10, Buryaile said, according to Clarin. The soybean tariff will be cut by five percentage points a year until its elimination in seven years, Clarin said.

Argentina, the world’s third-largest soybean producer, is forecast to export 10.75 million tons of soybeans in its 2015-16 marketing year, according to the U.S. Department of Agriculture.

By Ye Xie and Katia Porzecanski
November 25, 2015

* Macri reiterates pledge to lift nation’s currency controls
* Official and black-market rates are currently 58% apart

If there’s one point Argentine President-Elect Mauricio Macri has been crystal clear about, it’s that he hates all the rules and restrictions throttling the country’s currency market. On Tuesday, two days after defeating the pro-government candidate, Macri reiterated his pledge to do away with the foreign-exchange controls immediately upon taking office next month.

It’s an audacious plan, one that has the potential to jump-start his efforts to lure much-needed investment to the country but also one that comes with great risk. With the official and black-market exchange rates currently 58 percent apart, lifting the controls will almost certainly trigger a plunge in the value of the peso. That could cause a surge in consumer prices in a country where inflation is already running above 20 percent, deepen the economic slowdown and spark a public and political backlash against the new government.

The plan is so fraught with risk and so logistically difficult that many outside observers insist that he won’t really try to pull it off so quickly. They chalk it up to campaign rhetoric. But Macri isn’t toning down his language as president-elect. When asked Tuesday how fast he’d move, he replied Dec. 11, one day after he’s sworn in.

“History is littered with the corpses of countries that have abandoned capital controls precipitously,” said Barry Eichengreen, an economics professor at the University of California at Berkeley and former senior policy adviser to the International Monetary Fund during the 1997-1998 Asian financial crisis.

Should Macri, two-term mayor of Buenos Aires and wealthy businessman, follow through on the rhetoric, the $540 billion economy could suffer a big blow. “There will be a single exchange rate,” Macri said Tuesday. “The controls don’t make sense any more since there aren’t even any dollars left to defend in the central bank.”

Assuming he devalues the peso by 39 percent to 15.8 percent in three months to align the exchange rate with black-market prices and removes utility subsidies, the central bank will have to raise interest rates to 40 percent by September to control inflation, according to Oxford Economics, a U.K. research firm. Under such a “shock therapy,” the economy will shrink by about 3 percent annually in the next two years before picking up in 2018, economist Luiz Kessler wrote.

Venezuela, a neighbor and long-time ally, has been there before. In 1989, newly-elected President Carlos Andres Perez abruptly lifted foreign-exchange controls and let the currency plunge after finding that the central bank was running out of foreign reserves. Consumer prices soared 21 percent in one month alone, leading to the “Caracazo” riots that killed hundreds and spurred Hugo Chavez, then an Army officer, to accelerate plans to stage a coup attempt that launched his political career.

Instead of shock and awe, Macri should adopt a gradual transition to a free-floating exchange rate, said Paulo Vieira da Cunha, a former Brazilian deputy central bank governor. That would give the government time to pass measures that will soak up extra pesos, implement a credible fiscal plan and draw in cash from abroad, he said.

“There is a difference between doing something gradual with credibility and doing something haphazardly into a void,” said Cunha, now chief economist at Los Angeles-based money manager Ice Canyon.

No one is saying Macri shouldn’t start implementing changes quickly. After 14 years of rule under the Kirchners, the economy is reeling from the lowest foreign reserves in nine years at $25.8 billion, the biggest budget deficit in three decades and a regulated currency that’s failed to depreciate in line with inflation. In the last four years, the peso has fallen just 55 percent, compared with annual price increases of more than 20 percent since 2011.

Excluding items such as dollars held for commercial lenders and a $10 billion currency swap with the People’s Bank of China, the country has just $2 billion in readily-available reserves, according to Barclays Plc. Rigid currency controls are one of few measures that keep the country afloat amid relentless capital flight.

But for Macri, the margin for error is thin. As 49 percent of voters went for his opponent the ruling party candidate Daniel Scioli, unpopular measures of large devaluation, coupled with spending cuts and tax increases, would only alienate Argentines and erode his political support.

Mario Blejer, the nation’s former central bank president who devalued the peso in 2002, said capital controls should only be phased out and lifted sector by sector, starting with importers. To mitigate the impact, Macri will have to increase interest rates on central bank notes and spur demand for pesos, said Blejer, who boosted those yields to 140 percent 14 years ago.

“We used to think about it as an equation in which the greed for higher interest rates will trump the panic of holding pesos,” Blejer, who was most recently advising Scioli, said from Buenos Aires. “They’ll see that it’s difficult. You can’t just change everything from one day to the next.”

Another doubt for investors is the ease with which Macri can implement these changes without the support of the central bank. Alejandro Vanoli, who was appointed by Cristina Fernandez de Kirchner to govern the bank and deemed unqualified for the job by Macri, has vowed to carry out the rest of his term through 2019. He’s being investigated for illegal operations in the dollar futures market. While Vanoli has said the fraud allegations are politically motivated, they may pressure him to step down, according to Barclays strategist Sebastian Vargas.

Ultimately, Macri’s narrow victory over Scioli may be the loudest call for a gradual approach, said Vargas.

“What I’m seeing is that they’re becoming aware of the magnitude of the adjustments, maybe because of how close this race was, and that’s going to impact how aggressive they are,” he said in an e-mail.

By Charlie Devereux
November 25, 2015

* New ruling party official cites Prat-Gay as finance minister
* Prat-Gay served as central bank president from 2002-2004

A former JPMorgan Chase & Co executive, Alfonso Prat-Gay, will become finance minister in Argentina’s new government, said the head of a think-tank linked to the party of the incoming president. Prat-Gay confirmed he would be a member of the cabinet, while declining to say which ministry he would take over.

“We already know who the minister is – it’s Alfonso Prat-Gay,” Francisco Cabrera said in an interview on Radio Latina Wednesday. Marcos Peña, Cabinet Chief for President-elect Mauricio Macri, said he will announce the full cabinet at 5 p.m.

Macri has pledged to open up the country’s economy following a dozen years of trade protectionism and state intervention. He has also said he plans to reduce the power of the current economy ministry to diversify decision-making, with the finance minister playing a key role in a newly-formed economic cabinet comprised of six ministries. Prat-Gay said Wednesday that Macri’s government plans to present a package of new laws to Congress in its first week.

Asked to define exactly when Argentines will be able to step into an exchange house and buy dollars following four years of currency controls, Prat-Gay said it would be a priority.

“The president-elect has said he wants them to be lifted as soon as possible and we’re working toward that,” he said.

Cabrera said Federico Sturzenegger, a lawmaker from Macri’s Pro party who was also president of Banco Ciudad, the bank owned by the Buenos Aires city government, would become president of the central bank. Cabrera told the radio that he would become production minister.

Tough Challenge

The new finance minister will inherit a challenging economic scenario: reserves are at a nine-year low, the budget has the widest deficit in 30 years and the peso is at its most overvalued against the Brazilian real since the establishment of the Mercosur trade bloc in 1991. One of his first tasks would be to find a resolution to a decade-long legal battle with disgruntled creditors from the 2001 default that’s blocking Argentina from international capital markets.

“They’re building a great team with solid technical grasp, it’s way superior to what we’ve had previously,” said Fernando Jasnis, a money manager at Explorador Capital Management. “It’s a good signal, this team is going to promote trust. They’re people with a great track record and reputation in the market.”

As central bank president from 2002 to 2004, Prat-Gay halted a surge in inflation following the debt default and currency devaluation and helped spark a recovery from Argentina’s worst recession on record. He cut the inflation rate to 5.3 percent in 2004 from 40 percent at the start of his term in December 2002.

Despite winning the Euromoney magazine central bank governor of the year award in 2004, former President Nestor Kirchner chose not to renew his mandate as Prat-Gay pushed for more autonomy for the central bank.

Prior to his appointment as president of the central bank, Prat-Gay was the head of emerging market research at JPMorgan Chase. After leaving the central bank, he founded Tilton Capital, an asset management company. He entered politics in 2009 when he was elected as a lawmaker for the opposition’s Civic Coalition led by Elisa Carrio.

By James Gibney
November 25, 2015

Sunday’s election of Mauricio Macri as president promises a fresh start not only for Argentina, but also for its ties with the U.S., which have been mostly chilly since Argentina’s massive default in 2001.

Yet that will only happen if the U.S. revisits and learns from its own role in precipitating this diplomatic deep freeze. When President George W. Bush came into office, he threw away a budding, multi-faceted relationship to make Argentina a misguided object lesson in fiscal probity. If the U.S. truly wants Latin America’s “pink tide” of populist socialism to recede, and to rejuvenate its own regional diplomatic mojo, it needs not only to engage more deeply with the continent but also to take a more strategic approach to advancing its interests.

For decades, U.S.-Argentine relations have been marked, as one historian put it, by “repeated misunderstandings, extended periods of tension, and missed opportunities for cooperation and friendship.” They took a turn for the better with the 1989 election of President Carlos Menem. Partly this was driven by Menem’s conclusion that the only way to end Argentina’s recurrent economic travails was to break with the statist policies of the past — a decision that cheered U.S. policy-makers.

But according to Domingo Cavallo, who served both as Menem’s foreign and economic minister, Argentina also saw the Cold War’s end and President George H.W. Bush’s effort to create a New World Order as a chance to lock in economic and political benefits by aligning Argentina more closely with the U.S.

Over the next decade, a series of remarkable policy shifts followed. Argentina set aside its nuclear rivalry with Brazil and ratified the Nuclear Non-Proliferation Treaty. It sent ships to participate in the Gulf War. It cancelled a controversial program, funded by Egypt and Iraq, to develop a medium-range missile. Menem became Latin America’s “most vociferous critic” of Cuba’s human rights record.

Argentina also dramatically stepped up its participation in United Nations peacekeeping, and in 1997 the administration of President Bill Clinton designated the country a major non-NATO ally. At least figuratively, Argentina had achieved the “carnal relations” that Menem’s Foreign Minister Guido di Tella famously declared he sought with the U.S.

Then came the break-up.

Despite achieving brisk economic growth in the 1990s, Argentina’s government also continued to borrow heavily, and the decision to peg its currency to the dollar made the country vulnerable to external shocks. When the 1997 Asian crisis hit, falling demand for Argentine exports shrank its foreign reserves, making debts harder to cover. Meanwhile, the dollar’s appreciation rendered Argentina’s exports less competitive.

The U.S. at first tried to help. After crashes in Asia and Russia, the Clinton administration worried about a knock-on crisis in its good friend and star neoliberal pupil. So in 2000 it backed a $20 billion support package from the International Monetary Fund. Even with that in place, however, Argentina’s economic troubles mounted.

Unfortunately for Argentina, the incoming administration of George W. Bush was less sympathetic — skeptical about the wisdom of “bailouts,” and suspicious of the growing influence of multilateral organizations.

Treasury Secretary Paul O’Neill told Congress that the IMF “had been too often associated with failure”; in his earlier years as an academic, Treasury Undersecretary for International Affairs John Taylor had called for its abolition. (I leave it to Sophocles and psychologists to explain the glee with which the younger Bush undermined every multilateral pillar of the New World Order laid out by his father.)

In the summer of 2001, the administration signaled it was reluctant to support more IMF help for Argentina. As O’Neill put it, “Argentines have been off and on in trouble for 70 years or more. They don’t have any export industry to speak of at all. And they like it that way. Nobody forced them to be what they are.” The U.S. punted, and the IMF decided in November 2001 to pull the plug on further financial support. In December, Argentina defaulted on $132 billion in debt.

In the year that followed, the economy shrank by 11 percent, savings evaporated and more than 50 percent of Argentines were plunged into poverty. A revolving door of caretaker regimes led to elections in 2003 that brought to power Nestor Kirchner, who regularly lambasted the U.S. and IMF for beggaring his country.

Of course, blame for the conditions that led Argentina to collapse rests primarily with the Argentines. But the U.S. decision to let Argentina fall was neither necessary nor consistent. Even as the U.S. railed against the IMF and bailouts, it backed assistance to Turkey, Brazil, and Uruguay. And consider some of the costs. In Argentina, public opinion toward the U.S. turned sharply negative; there, as in the rest of Latin America, the U.S. reinforced its reputation as a fickle ally by abandoning a more-than-willing partner.

Worse, that partner then became a pain in the pampas. Kirchner not only repudiated neoliberalism and the so-called Washington Consensus; he and then his wife Cristina Fernandez unhitched Argentina from U.S. goals.

Kirchner cozied up to Cuba, and he and his wife went on to sign more agreements with Hugo Chavez’s Venezuela than with any other country, including inviting it into the Mercosur trade bloc. Kirchner opposed the invasion of Iraq and bucked the U.S. at the UN and the Organization of American States. As the host of the 2005 Summit of the Americas, he helped organize a counter-summit to attack the U.S. and its plans for a Free Trade Area of the Americas.

After taking office, his wife continued the sniping and skirmishing — trumped-up incidents like withdrawing from U.S. police training programs that Argentina said promoted oppression, or confiscating equipment to be used for joint security exercises. More seriously, her administration reportedly conducted secret negotiations with Iranian officials offering, in return for Iranian oil, to deflect charges that they organized the 1994 bombing of a Jewish community center in Buenos Aires. And Fernandez has opened the door to growing Chinese influence with a string of financial deals, motivated both by the country’s post-default needs for cash and her belief in the advantages of a multi-polar world.

The election of Macri promises better diplomatic days ahead: He plans to shift Argentina’s foreign relations away from China, Iran, Russia and Venezuela toward the U.S. and Europe.

But given the sharpening global competition for influence (not least with China), the U.S. had better reciprocate. Macri will need American support to finally regain access to the international credit markets. That’s a subject of heated dispute, with lobbying groups (bankrolled by hedge funds who bought up Argentina’s defaulted bonds) pushing the U.S. to take a hard line. President Barack Obama shouldn’t put that narrow interest ahead of rebuilding its partnership with Argentina and its broader influence in the hemisphere.

28 November 2015

BUENOS AIRES, Nov 28 (Reuters) – Argentina’s incoming government will abolish export taxes on corn and wheat the day after it assumes office and reduce the export tax on soy by 5 percent, designated Agriculture Minister Ricardo Buryaile confirmed to the daily Clarin.

President-elect Mauricio Macri won the election last Sunday on a platform of wholesale change. He has vowed to end interventionist measures like these taxes that have hobbled growth in Latin America’s third largest economy.

“The wheat and corn taxes will be eliminated from the first day, in line with what we promised,” Buryaile was cited as saying by Clarin.

“The tax on soy will drop by 5 percent from the start of Mauricio Macri’s term,” he added. “What we are examining is which methodology we will use.”

For years growers in the world’s No. 3 soybean exporter have been stung by a 35 percent tax on all international shipments.

The country collects a 23 percent export tax on wheat and a 20 percent levy on corn shipments.

By some estimates, Argentina will have doubled wheat shipments and surpassed Russia and Brazil as a corn exporter by the end of Macri’s four-year term, as the abandonment of years-long trade restraints unleashes the full potential of the country’s vast Pampas farm belt.

By Charles Newbery
27 November 2015

Buenos Aires (Platts)–27Nov2015/1015 am EST/1515 GMT Juan Jose Aranguren, the next energy minister of Argentina, said Friday he will seek to rebuild investor confidence in the country by improving business conditions after taking office December 10.

“We need, as in other sectors of economic activity, to restore rationality,” he said on Radio Mitre a day after getting tapped for the post by the conservative President-elect Mauricio Macri. “We must emerge from the schizophrenia we have lived in the energy sector in recent years.”

Aranguren, who comes to the post after working for years as the chief executive of Shell Argentina, said he will cut energy subsidies and push for a rapid increase in energy production to reduce imports.

He called it “a crime” to subsidize energy “in a country that imports 15% of its energy” when it also has rich resources of oil, gas and renewable power.

“Only countries that are exporters subsidize energy,” he said in his first public comments since getting appointed. “Our country is the only case that is an importer and subsidizes energy.”

Argentina holds among the world’s greatest potential for shale oil and gas, of which only about 54,000 b/d of oil equivalent is now in production.

The outgoing populist-left government has paid subsidies on energy since coming to office in 2003, at first to keep down gas and power bills to help pull the economy out of a 2001-02 crisis by fueling consumer spending.

In recent years, the outgoing administration has been paying producers subsidies to prop up wellhead prices at up to $80/b for crude and $7.50/MMBtu for gas to encourage rebuilding production after dwindling by 20% over the past decade.

The effort has helped to stabilize oil production at 532,000 b/d and to increase gas production by 3.2% to 117.3 million cu m/d in the first three quarters of 2015 compared with the annual average of 113.7 million cu m/d in 2014, according to the Argentine Oil and Gas Institute, an industry group.

However, with energy consumption continuing to rise, imports of crude, diesel and gas have held steady.

Aranguren warned that if temperatures surge this summer, blackouts could return because of years of insufficient investment in improving distribution.

By Dimitra DeFotis
November 25, 2015

Markets have heralded new, more market-friendly leadership in Argentina, but now the hard part comes: and recession is possible.

This is showing up in the market: The Argentina Merval Index fell more than 55 points or 0.41% Tuesday; the Global X MSCI Argentina exchange-traded fund (ARGT) is down more than 3% this week, and has pared gains for the year. The ETF is now up 1.8% year to date. Argentina banks Banco Macro (BMA), BBVA Banco Frances (BFR) and Grupo Financiero Galicia (GGAL) are down 10% apiece this week. Tamping down inflation and cutting government spending — tighter macro policy in the short term – could lead to an economic recession, writes Fathom Consulting, which adds:

“While [Macri’s] presidency provides an opportunity for longer-term economic reform, there is a risk that it will be impaired by his party’s failure to hold a majority in either houses of Congress. Mr. Macri’s agenda also faces challenges from abroad, with China in the midst of a hard landing; deepening recession in Brazil; and the US on the brink of raising interest rates for the first time in nearly a decade.”

Barclays analysts Pilar Tavella and Sebastian Vargas are a little more optimistic:

“Mauricio Macri will face three economic battles and a political one as soon as he is sworn in as president of Argentina: re-capitalizing the central bank; devaluing the ARS and ending FX controls; reducing the primary fiscal deficit from 4.8% of GDP; and preserving governability. We expect Macri’s administration to win the first battle quite quickly, boosting net reserves from the current US$2 billion to US$7 billion in the first quarter … we expect a decline of 1.1% in 2016, as a result of falls in real income related to the potential pass-through effects of a devaluation and fiscal adjustment. We expect higher growth (3.5%) in 2017 and beyond on positive-supply side effects following from much-needed adjustments …”

An inflation-targeting program may hasten the exit of Argentina’s central bank President Alejandro Vanoli, Barclays adds.

By Silvio Canto, Jr.
November 30, 2015

We mentioned last week that Argentina has a new president. He is already sounding a lot different than the incumbent. President-elect Mauricio Macri of Argentina sent a message to Venezuela and Iran:

Only a day later, Mr. Macri moved quickly to strike a different tone from that of the departing president, Cristina Fernández de Kirchner, who — along with her late husband, Néstor Kirchner — had controlled the presidency for the last 12 years.

At a news conference on Monday, Mr. Macri emphasized how his administration would differ from that of Mrs. Kirchner on foreign policy. He announced an effort to get Venezuela — a close ally of Argentina under the Kirchners — suspended from the Mercosur regional trade bloc over claims of the infringement of civil liberties there.

And he made clear his desire to revoke an agreement struck under Mrs. Kirchner with Iran to jointly investigate the 1994 bombing here of a Jewish center, which killed 85 people. Some investigators have accused senior Iranian officials, including a former Iranian president, of planning and financing the attack, making the agreement to give Iran a direct role in the investigation a political lightning rod.

Mr. Macri has also announced plans to improve diplomatic ties with the United States, which became strained in recent years over Argentina’s international debts and Washington’s sway in the hemisphere.

“There is little doubt that Argentina’s relations with the U.S. under a Macri administration will become friendlier,” said Michael Shifter, president of the Inter-American Dialogue, a policy group in Washington.

Mr. Macri understands how the Kirchner regime has hurt Argentina, from a relationship with Iran to demonizing foreign investors to distract the people from the failures of crony capitalism.

Let’s hope that president-elect Macri will also restart the investigation into the death (or murder) of Mr. Nisman, the prosecutor who was killed in his apartment the day before he was to appear in Congress.

It will take time, and patience, but Argentina has a chance to turn it around and become a vibrant economy and U.S. trade partner.

Singing a different tune with Iran and Venezuela is the right “tango” for the moment!

By John Charlton
1 December 2015

Further evidence that copyright protection terms appear to be heading in only one direction comes from Argentina. The country’s ruling party, Front for Victory, recently proposed a draft bill extending the term of copyright protection on photographs from 20 years to life of the photographer plus 70 years. This would put the copyright term for photographs on the same footing as that for books and may, effectively, sextuple the period of protection from 20 years to 120.

If the proposal passes into law, it would apply retroactively and may prompt the removal of many images from the public domain. It’s very likely that photographic images owned by foreign individuals and entities will also get the lengthier protection term. Argentine pressure group Fundacion Via Libre, which campaigns for more open access to digital information, is against the proposal. According to its secretary, Beatriz Busaniche, it is “fighting in the congress and in the media” to open the debate on copyright. “We are trying to build public awareness,” says Busaniche. “We are also talking to congressmen and women to provide them input on the consequences of this kind of [bill]. … [W]e hope our representatives will hear our voice.”

Busaniche says that Fundacion Via Libre has been “working in the copyright field since 2000,” and its research shows that “copyright extensions [have] negative effects [on] human rights, [especially] cultural rights…. We also defend public domain and free culture projects like Wikimedia Commons, which will be directly affected by this proposal.”

Earlier this year, Jamaica increased copyright protection to life plus 95 years, while in 2011, the European Union (EU) raised the term for music recordings to 70 years. In 2009, Cambridge University academic Rufus Pollock authored a paper that used mathematical models to show the optimum term for copyright protection should be 15 years. The Association of Graphic Reporters of Argentina is pressing for the copyright extension.

Rob Ward
26 November 2015

As the ideology known as Kirchnerismo begins to fade in Argentina following the defeat of outgoing president Cristina Fernandez de Kirchner’s intended successor in elections Sunday, shippers and container terminal operators in Buenos Aires may benefit from an increase in trade.

Kirchner’s economic policies and penchant for picking fights with neighboring countries have caused the country’s container trade to decline and the election of Mauricio Macri, the current center-right mayor of Buenos Aires, holds the promise of better days ahead.

Macri has promised major change on all fronts, including better relations with neighbors in South America, the United States and the European Union.

“It is going to be very interesting to see how President Macri deals with the many problems that have been left behind by the Kirchner regime,” Antonio Zuidwijk, an experienced and well-respected port consultant based in Buenos Aires told

These issues include protectionist policies such as import and export restrictions in addition to runaway inflation of more than 20 percent and trade spats with neighbors Brazil and Uruguay. The government also put too much of a focus on the domestic market rather than nurturing international trade, Zuidwijk said.

Zuidwijk, who was operations manager for Argentina, Uruguay and Paraguay for the U.S.-based Moore McCormack Lines in the 1970s when containerization was first being established in South America, said that these issues have caused the container trade in Argentina to shrink to where it was in 1998.

The country’s largest port, Puerto Nuevo in Bueno Aires, which is responsible for 90 percent of the country’s container trade, handled 1.2 million 20-foot-equivalent units in that year. The port moved 997,000 TEUs in 2014.

That decline took place even as containerization continues to grow throughout South America. For example, the Port of Santos, Brazil, which has surpassed Puerto Nuevo to become the continent’s largest container gateway, may pass the 4 million TEU mark this year, after breaking 2.5 million TEUs in 2010.

Argentina’s port sector must also contend with the government’s narrowly-focused approach to transportation. “The problem here is that no one looks at the complete picture, a transport policy for the country as a whole, of which the ports should form part,” Zuidwijk said. “The complete relationship between ports and the hinterland, between trucks, rail and waterborne transport.”

The government must also come up with policies to better manage the River Plate, which is shared with Uruguay, and work with Uruguay to figure out the best way to manage the entire River Plate Basin, Zuidwijk said.

Another positive aspect of Macri’s accession to power for the wider community of shippers and transport specialists is that the new Argentina president wants to bolster the local South America trade bloc of Mercosur.

Mercosur, which includes Brazil, Uruguay, Paraguay, Argentina and Venezuela, has been an ineffective body over the past 10 years and that has largely been due to Argentina’s intransigence and opposition to free trade under Kirchner.

For more than 10 years the EU has been trying to forge a free trade pact with Mercosur, but Argentina has often proved the stumbling block.

By Frank Holmes
Nov 29, 2015

It might be hard to believe now, but Argentina once ranked among the top 10 wealthiest nations in the world, following the United Kingdom, United States and Australia.

Today, however, it’s one of the most corrupt, according to Transparency International, a group that annually measures public sector corruption around the world. In 2014, Argentina ranked 107, sandwiched between Niger and Djibouti.

That’s largely because for more than half a century, Argentina has been led almost exclusively by the far-left Justicialist Party, based on the political thought of Juan Perón—an admirer of Mussolini—and his wife Evita.

But this week, Argentina said “no, gracias” to further leftist rule when it elected conservative businessman and two-term Buenos Aires mayor Mauricio Macri to succeed Cristina Fernández de Kirchner as president. It was an upset victory for the people of Argentina, who have seen their once-prosperous nation deteriorate under decades of Marxist policies.

It was also a strong win for investors around the globe. Not since Narendra Modi’s election last year has a leader’s entry on the world stage inspired such bullishness.

In the three months leading up to the November 22 election, Argentina’s Merval Index rose 30 percent as optimistic investors anticipated a win by Macri.

This week I was in San Francisco attending the Silver Summit & Resource Expo, where many fund managers commented that their Argentine holdings had seen huge jumps recently. Many people I spoke with were bullish on the country.

Latin America Veering Right to Escape Corruption

I join many others in expressing my belief that this change in leadership points to an ideological shift in Latin America and a rejection of the Peronism that has threatened to turn the region into an also-ran economy. I’m confident that once Argentina demonstrates to its neighbors that market-friendly policies stir economic growth and help lead to widespread prosperity, the people of Colombia, Brazil, Venezuela and others will demand similar corruption-free leadership.

In Venezuela—which is slightly less corrupt than the likes of Yemen, Libya and Iraq, according to Transparency International—the people are still reeling from Hugo Chávez’s disastrous administration. With food shortages and hunger worsening, the government implemented fingerprint scanners in grocery stores last year to limit purchases of basic goods.

This, despite Chávez—a leader who was supposed to be “for the people”—being worth an estimated $2 billion at the time of his death two years ago. It’s believed that he stole much of his wealth from the country’s oil industry. Today, his daughter Maria Gabriela is the wealthiest woman in Venezuela, worth double that.

In August, global intelligence company Stratfor conducted an analysis of satellite imagery taken of Puerto Cabello, Venezuela’s main port of entry for imports, between February 2012 and June 2015. The visible reduction in food container traffic is alarming.

Meanwhile, in Peru, First Lady Nadine Heredia is being investigated for money laundering and the usurpation of public functions. When I was in country earlier this month speaking at the Mining & Investment Latin America Summit, there was a lot of discussion on rule of law and corruption in Peru and surrounding South American countries. It’s estimated that stolen public money in Peru adds up to about 2 percent of GDP annually.

Latin Americans are increasingly saying enough is enough.

“What happened in Argentina was the first change in Latin America,” said former Brazil finance minister Maílson da Nóbrega, speaking to the Wall Street Journal. “It may be the start of a downfall in populist governments. I think the next one should be Venezuela. And I think Brazil will follow suit in 2018.”

Brazil President Dilma Rousseff, who won reelection last year, currently has an approval rating in the single digits. As I shared with you last month, her Marxist policies have suffocated business development. The country tumbled 18 points this year in the annual Global Competitiveness Index (GCI) and is now considered to be one of the worst in terms of burdensome government regulations and unethical business practices. The people of Brazil deserve better.

his is part of the reason why I believe active management is so important. When I travel around the world and talk to different people, I obtain and return with tacit knowledge that can’t be found by simply reading Bloomberg.

Macri Bucks the Trend

In this troubling context, Mauricio Macri is a breath of fresh air. He’s not what most people envision when they’re asked to describe the stereotypical South American leader. Unlike Fidel Castro, Chávez, Rousseff and others, Macri never served as a Marxist guerilla in his youth. There are no pictures of him posing heroically in a steaming jungle, attired in military garb like fellow Argentine Che Guevara. Macri’s more likely to be found playing a friendly game of soccer than delivering a rousing hours-long speech from a balcony. By most accounts, he’s contemplative and soft-spoken.

But change is precisely what Argentina needs now. For the last 12 years, former President Néstor Kirchner and, following his death, wife Cristina managed only to cripple the country’s economy even further. The size of the state doubled in the last 10 years alone. Entire industries were nationalized, taxing and spending skyrocketed, foreign investment fled and inflation exploded at an average pace of 20 percent a year.

Under these conditions, holding gold in Argentina pesos has been a good bet for investors.

Realistic or not, Macri has vowed to roll back many policies from previous administrations. He also plans to cultivate a warmer business climate with Brazil, Argentina’s top trading partner, and staunch the outflow of foreign capital. Last year, $2 billion left the country, a 75 percent increase from 2013, according to the Organization for Economic Cooperation and Development (OECD).

Which is a shame. Argentina has a huge amount of untapped potential—a highly educated population, the fastest-growing middle class in Latin America and an abundance of natural resources.

Here’s hoping Macri’s administration can succeed at fostering a more welcome environment for business, one that might benefit the Argentine people and global investors alike.

As Argentina is facing steep inflation, American consumers today are spending a little less on essentials such as food—more specifically, Thanksgiving dinner.

According to the Texas Farm Bureau’s Thanksgiving Meal Report, a typical spread of turkey, stuffing, sweet potatoes, cranberry sauce and more cost $46.48 this year, down 31 cents from 2014.

(The one Thanksgiving staple we spent more on this year was pecans. They’re up 11 percent as China’s appetite for the nut has increased.)

The reason for the savings? Lower fuel and grain prices. As a whole, grains are down about 11.5 percent from a year ago, while crude oil is off more than 36 percent. According to AAA’s Fuel Gauge Report, gas averages $2.05 per gallon right now, a 27 percent decline from this time last year.

As I’ve been saying since last December, this “oil peace dividend” is helping us save not only

By Patrick Gillespie
November 25, 2015

American Airlines won’t accept Argentina’s money.

The airline announced that it will no longer allow customers to pay for flights with Argentine pesos.

“We currently do not have inventory available for purchase in Argentine pesos due to repatriation issues,” American Airlines said in a statement.

Translation: American Airlines faces problems converting its pesos to dollars.
American Airlines had already changed its policy once — in September — allowing Argentines who buy with pesos to fly within 90 days of the purchase.

Now, no flights can be purchased with pesos. American Airlines is still accepting purchases in Argentina with foreign credit cards.

“American Airlines’ action is very strong,” says Pablo Singerman, CEO of an economic think tank, Singerman y Makon, in Buenos Aires.

There’s two issues for American Airlines (AAL) in Argentina.

First, Argentina’s central bank recently reduced the amount of money foreign companies could bring back to the U.S. on a daily basis. The reduction comes amid growing concerns over the central bank’s declining foreign reserves — a warning sign of economic instability.

Second, major changes to Argentina’s currency are coming.

Just last Sunday, Argentines elected Mauricio Macri as its new President. Macri has promised major economic reforms to turn around the country’s stagnant economy.

One of those reforms will be ending the government’s currency controls set by the previous administration led by Cristina Fernandez de Kirchner. The controls put the peso on a mostly-fixed exchange rate.

Right now one dollar equals $9.67 Argentine pesos. But many people believe that the peso is overvalued, and most Argentines exchange money on a black market at an exchange rate of 15 pesos to the dollar.

Kirchner put the controls in place to fight Argentina’s rising inflation, which has risen over 20% annually in recent years.

Ending the currency controls might lead to some volatility in the short term, but experts applaud the move and will likely lure back foreign investors.

“Macri is going to devalue the peso,” says Singerman. Long-term for foreign companies: “It’s a great time to invest in Argentina.”

It won’t be a surprise if undoing the currency control will immediately cause Argentina’s currency to be significantly devalued.

With a devaluation likely coming, American Airlines may not want to accept a currency that many experts say is well overvalued.

The situation in Argentina is similar to what’s already happening in Venezuela, where airlines have $3.7 billion held in the country because of currency controls, according to the International Air Transport Association. Venezuela has four official exchange rates and it also limits how much American companies can send back to the United States.

American Airlines is one of the biggest international airlines to fly to the Argentina. It has 27 weekly flights from various cities around the U.S. to Buenos Aires, the capital.

-CNN’s Diego Laje contributed reporting from Buenos Aires

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30 noviembre, 2015


Hemos sostenido que en Argentina liberales prácticos no ofrecen propuestas serias para gobernar, y esto lo dijimos desde hace años, e incluso ofrecimos propuestas sensatas a gobernadores y presidente, para redactar legislaciones liberales que sirvieran para generar bienestar y disminuir el flagelo de la desocupación, mas la opinión publica tiene una opinión falsa, producto de décadas de fascismo antiliberal que destruyó nuestra economía y sistema constitucional republicano. Ver, como ejemplo,

Noto que Adrián Ravier escribe desde infobae ¿Fracasó el neoliberalismo? teclear para confirmar  que simpatiza con lo neoliberal. y   prefiero al liberalismo, a secas, la forma de vida que me gusta, aunque a los gobernantes moleste. Porque neoliberales suelen ser gobernantes que hacen y roban mas de lo que el pueblo produce bajo sus desgobiernos, por eso el  liberalismo es superior. Y la prueba es que en Argentina los autoritarios criticaban siempre al liberalismo, y el neoliberalismo se…

Ver la entrada original 687 palabras más


30 noviembre, 2015


Leo en La Nacion que se expusieron criticas y loas a Vargas Llosa, y se revoluciono el tema de la politica argentina y en especial, la actual K. Es interesante comprobar cuan util es para la gente que se debatan ideas en torno a la Feria del Libro, toda vez que el PARLAMENTO, o Congreso Nacional, incumple sus funciones de hacerlo y discutir libremente politicas de Estado.

Es la ausencia de politicos serios en Argentina la que motiva la decadencia, que emerge de la dictadura fascista que anulo de facto la Constitucion Nacional en 1930, un pecado que perdura y nos hace retroceder en terminos comparativos, con otros paises que antes eran mucho mas atrasados que el nuestro.

La palabra liberalismo tiene distintas acepciones, y en Argentina se la confunde hoy con el neo liberalismo, que es el conservadorismo de derecha extrema, para intentar marcar la primera de las muchas…

Ver la entrada original 1.382 palabras más


30 noviembre, 2015

A quienes prima facie dañan a la economía argentina, comenzando por la Presidenta que es la que ordena medidas economicas peligrosas que surtirán efecto perjudicial luego del 10 de diciembre, cuando ella ya no esté en el cargo, hay distintas formas de intentar prevenirlo.
Nosotros creemos que ciertas medidas de la Presidenta intentan beneficiar a ella misma o a sus amigos, en perjuicio de la economía de los argentinos, provocando gastos innecesarios al Estado Nacional, en beneficio de militantes y amigos de la presidenta que deja su cargo el diez de diciembre próximo.

Pero planificar medias equivocadas prima facie indica intención de cometer hechos ilícitos, y esto requiere la intervención de tres o mas personas. Sería una asociación ilícita, encabezada por alguien que hoy puede tomar medidas disparatadas sin sentido, destinadas a favorecen injustamente a pocos. Eso debe denunciarse penalmente y si se lo hace anticipadamente, mejor. Quien mejor puede hacerlo es el presidente ENTRANTE, para defendernos de la Presidenta aliente, suponiendo que Macri tiene razón y Kristina ha permitido enriquecimiento propio y de sus amigos durante sus ocho años de Presidenta, así como Nestor lo habría hecho antes.

Insistimos que la causa de enriquecimiento ilícito de la familia K cuya absolución en primera instancia por parte del Juez Oyharbide no fue apelada en término por el fiscal, podría ser reabierta, en nuestra opinión, si se investiga que al momento en que debió apelar, al señor Fiscal le secuestraron una hija, que reapareció en libertad recién cuando el plazo para apelar habría vencido. Es factible reabrir la apelación, basta con averiguar si el Fiscal denunció penalmente el eventual secuestro, o si fue una mentira de la prensa opositora. Si el Fiscal niega el secuestro, no tuvo motivos para no apelar, a menos que haya sido su voluntad quebrada por un hecho grave y delictivo: o fue comprado para no apelar la sentencia, o fue amedrantado por un secuestro que no se atrevió a denunciar, por temor a la mafia que protege a los ladrones estatales, especialmente a los Presidentes y gobernadores. Cualquier Fiscal puede presentar un recurso contra la falta de apelación, ya que es fácil determinar por medio de peritos serios si cierran los números de la familia K, ya que no es fácil con el sueldo de empleados públicos convertirse en propietarios de cadenas hoteleras en apenas veinte años, digamos desde que Nestor Kirchner comenzó su carrera política en la municipalidad de Rio Gallegos, luego en la Gobernación de Santa Cruz y finalmente en la Presidencia argentina. Estarían obligados a declarar no solo el Fiscal, sino sus propios familiares, y deben decir la verdad o cometer el delito de falso testimonio y encubrimiento de un posible delito de enriquecimiento ilícito por muchos millones de dolares.
Atención: si Macri cumple con su futuro juramento de hacer cumplir la Constitución y las leyes, deberá ocuparse de que la causa del enriquecimiento de la familia K sea reabierta. De lo contrario, que Dios y la Patria se lo demanda. Y agrego QUE OTRO FISCAL LO DENUNCIE, y obligue a la Justicia a decidir si el caso está realmente terminado por falta de apelación, o si debe ser reabierto por haberse producido el hecho IRRITO consistente en un fraude a la verdad con el objetivo de ocultar ganancias ilicitas por parte del difunto Nestor y su familia. El dinero mal habido debe ser restituido por sus herederos. Y será la Presidenta la que tendrá que demostrar que si ella intervino en la construcción lo hizo con dinero honestamente ganado para construir tantos hoteles en tan poco tiempo, ademas de ir comprando o construyendo otras propiedades en Santa Cruz y en la Ciudad Autonoma de Buenos Aires, y eventualmente en otros sitios del planeta.

Juez Bonadío ¿afuera del Poder?

29 noviembre, 2015

¿Y la institucionalidad? x ex Presidente Sanguinetti

29 noviembre, 2015


27 noviembre, 2015

Leo en infobae que el ex funcionario kirchnerista Prat Gay está abriendo el paraguas, en vez de que él y todos los miembros del gobierno entrante – comenzando por el Presidente electo Macri – procedan legalmente como corresponde frente a las sospechas de que ha existido un vaciamiento a la economía y a los grandes bancos Nación y Provincia de Buenos Aires, entre tantos posibles faltantes o delitos o robos para la corona.
Todavía hoy están a tiempo para intimar personalmente a la Presidenta, el Vice Presidente y el Jefe de Gabinete que rindan uentas del Estado de Argentina desde el punto de vista patrimonial, ANTES de la fecha de asumir. Si no lo hacen, que no se quejen, o quizás tengan un acuerdo para no denunciar penalmente que el gobierno saliente NIEGA información sobre la RES PUBLICA, y eso prma facie indicaría algo peor que falta de cortesía: UNA ASOCIACIÓN ILÍCITA durante años destinada a enriquecerse un selecto grupo de amigos de la Familia Kirchner y ellos mismos.


Un Presidente entrante puede denunciar directamente ante la Corte Suprema de justicia la grave situación que se provoca ante la cuasi certeza de que los bancos oficiales han sido saqueados, y eso solo puede haberse cometido mediante una asociación ilícita, a un nivel extraordinario. Para eso, intervinieron dos presidentes como mínimo, aunque no sabemos si cuando Nestor recibió la Presidencia de manos de Duhalde, alguien contó realmente si las declaradas reservas del Banco central existían o eran tan solo cifras que los burócratas manejan en forma discrecional, para engañar a la gente y enriquecerse.
El Estado debería ser serio, pero sabemos que durante la época K no lo ha sido y tememos pueda no serlo durante la era de Macri, ya que no obtuvimos hasta ahora explicación sobre la expropiación extraña de un inmueble derrumbado en 2011 en la calle Bartolomé Mitre al 1200, que en virtud de una sospechable ley 4.004 de Caba autorizó al Gobierno de la Ciudad a expropiar el edificio derrumbado y pagarlo al valor anterior del día del derrumbe. Ignoramos los motivos de tanta insensatez, pero el dinero publico se pagó porque hubo muchos legisladores porteños involucrados que firmaron la ley y el Intendente Macri no la vetó. Si esto puede pasar en la Ciudad, imaginemos lo que pudo suceder durante doce años y medio de desgobierno nacional kirchnerista.


Esa figura existe en el Código Penal y se usa para casos comunes, pero Argentina estamos saliendo de una etapa peligrosa donde nos engañan con los índices y muchas otras cosas. Hay que tener coraje para sacar a Argentina del eje bolivariano anticapitalista, y el Presidente electo debe aprovechar los días que le faltan hasta asumir la Presidencia, para denunciar penalmente en forma preventiva los funcionarios del gobierno saliente. Si no lo hace antes, habría consentido o convalidado hechos ilícitos.
Y como entre las personas a denunciar está la Procuradora General de la Nación y el Presidente del Banco Central, que tienen estabilidad y para ser removidos es necesario juicio político ante el Senado, el lugar lógico e independiente donde el tema denunciado puede ser tratado rápido y en forma seria, es la Corte Suprema de Justicia Nacional, el único órgano que puede – si considera que hay prima facie motivos suficientes – intervenir judicialmente al Banco Central y a la Procuración General de la Nación, designando interventores judiciales para cumplir las funciones de los altísimos funcionarios involucrados.
Existen antecedentes desde tiempo inmemorial, sobre este tipo de juicios, conocidos como JUICIOS DE RESIDENCIA. Como no están legislados, que yo sepa, en Argentina, basta con fundamentar los graves motivos y sospechas, en una presentación ante la Corte Suprema de Justicia de la Nación, porque siendo el supremo tribunal, puede y debe decidir lo que corresponda. Imagino imposible que los actuales Jueces de la Corte nieguen al electo Presiente Macri un pedido de intervención judicial al Banco Central y al Ministerio Publico y al apartamiento inmediato de sus cabezas, para ser interinamente reemplazaros por personas confiables, que realmente existen. Y al Banco Central no parece difícil intervenirlo, porque durante el desgobierno K se modificó la carta organiza y se permitió desnaturalizar la esencia al punto de permitirle emitir la cantidad de billetes bancarios que el Ejecutivo le pida, sin control, tal como sabemos y surge imagino de los balances.
Prat Gay, como ex funcionario kirchnerista vinculado a la economía, no puede hacerse el distraido, debiera actuar personalmente y hacer la denuncia para mostrarnos que no tiene mentalidad kirchnerista dirigista bolivariana (la derecha que exprime a los pobres y enriquece a los Amos).


El ingeniero Macri y su grupo político propusieron el cambio y lograron que la mayoría lo votemos. Ha sido des tratado por la Presidenta cuando recibido mal en Olivos, señal que ella no puede o no quiere contarle la verdad. Prima facie, algo sospechoso pasa, y dudo la Corte Suprema se arriesgue a desechar un pedido de intervención judicial al Banco Central y a la Procuración General de Justicia. Porque si no lo aceptan, consienten el peligro de que Argentina haya sido vaciada desde el gobierno K y los bandidos se fuguen y no devuelvan el dinero.
Por ultimo, recordando a Hans Kelsen, recordemos que los jueces INTEGRAN el vacío legal. Pedir intervención judicial a la Corte Suprema es razonable y necesario en circunstancias prima facie sospechosas en lo relativo a la economía de Argentina, donde se ha engañado incluso con el indice oficial de precios conocido como INDEC. Ergo, el Supremo tribunal puede y debe actuar, integrando con su fallo – creando jurisprudencia – lo que hoy es un vacío legal, ya que ningún Presidente se ha ocupado de que se legisle el juicio de residencia tradicional, que existía en época de los monarcas españoles. Incluso, en una de las novelas ejemplares de Cervantes creo haber leído como los árabes hacían el juicio de residencia en forma tal que quien había ejercido correctamente sus funciones era premiado, y si resultaba que había robado al JEQUE (en nuestro caso, el Pueblo de la Nación Argentina) era decapitado si no prefería suicidarse. Pasaron siglos desde entonces, pero hay Presidentes y gobernantes que roban a sus pueblos y son efectivamente encarcelados, Perú tiene un ex Presidente preso. ¿Porque no sucedería esto en Argentina si el Ing. Macri quiere realmente que las cosas cambien y terminen la corrupción y la impunidad?
Ojo: si el Gobierno entrante quiere el CAMBIO, debería actuar ANTES de asumir la Presidencia, porque hay motivos para sospechar de los que se van.


27 noviembre, 2015


























By Editorial Board
November 24, 2015

FOR MOST of the past 75 years, Argentina, once upon a time a wealthy nation, has isolated and impoverished itself with a mix of economic populism and jingoistic nationalism. The past dozen years of rule by Cristina Fernández de Kirchner and her late husband, Néstor Kirchner, were no exception: Like numerous previous regimes, theirs produced a boom-and-bust economic cycle and poor relations with democratic states. Now, however, a surprising presidential election has given the country a chance to rejoin the Western world — and dealt a blow to Latin America’s already flagging socialist camp.

The winner of the election, Buenos Aires Mayor Mauricio Macri, is a rightward-leaning former businessman who defeated the nominee of the Kirchners’ Peronist movement. Mr. Macri offered voters a simple but, in the Argentine context, radical agenda: to return the country to mainstream economic policies and end the autocratic attacks on the media, judiciary and other institutions. In the short term, Mr. Macri promises to remove capital and export controls that have drained the country’s hard currency reserves while creating a thriving black market. He could also seek a deal with international creditors that would end Argentina’s 15-year-long exclusion from global capital markets.

The economic restructuring will likely be an uphill battle, obstructed by Peronist control of the National Congress and unions, and Mr. Macri has indicated he will proceed cautiously, holding off on privatizations and cuts in social benefits. He is no doubt mindful that all three of the previous non-Peronist civilian presidents elected since 1955 were driven from office before completing their terms.

However, Mr. Macri could quickly have an impact in foreign policy, where he appears ready to rupture the Kirchners’ cozy relations with China, Iran and — especially — the Chavista government of Venezuela. In his first news conference, Mr. Macri said he would seek Venezuela’s expulsion from the Mercosur regional trading group because of its violations of democratic norms. He could also seek sanctions under the democracy charter of the Organization of American States. Lilian Tintori, the wife of imprisoned Venezuela opposition leader Leopoldo López, was at Mr. Macri’s side on election night.

The Argentine’s willingness to take a stand is particularly important because of Venezuela’s upcoming legislative elections on Dec. 6. At best, the threat of multilateral sanctions could help to deter the government of Nicolás Maduro from trying to impede what polls show will be a decisive opposition victory.

Even a successful election will leave Venezuela — ground zero for the self-defeating autocratic populism that infected Latin America in the 2000s — a long way from reconstituting its institutions or rescuing its collapsing economy. But under Mr. Macri, Argentina could forge a path that new leaders in Caracas, and eventually other countries, could follow. The formula is not complicated: It amounts to embracing the free-market, trade-promoting policies that are working for Chile, Mexico, Colombia and other Latin American democracies. The problem has not been technocratic, but political — the susceptibility of some Latin electorates to cheap populist appeals. The fact that Argentines, who have fallen for those nostrums more often than virtually any other nation, finally have chosen a different course can only be encouraging.

By Joshua Partlow
24 November 2015

BUENOS AIRES — The first news cycle after the election of Mauricio Macri as president of Argentina included an unusual contribution from La Nacion, one of the country’s top newspapers: an editorial headlined “No More Vengeance.”

The gist of the instantly controversial piece was that the time had come to forget about the crimes committed during Argentina’s 1976-1983 military dictatorship. The editorial argued that the old regime’s leftist opponents were “ideologically committed to terrorist groups” and acted in a way “no different” from the militants who attacked Paris earlier this month. It also bemoaned the “shameful” treatment of regime officials imprisoned for human rights crimes despite their “old age.”

“One day after citizens voted for a new government, the desire for revenge should be buried once and for all,” the editorial read.

The piece provoked swift condemnation by many Argentines, including many of the newspaper’s own reporters. They took to social media to disavow the unsigned opinion piece, and the newspaper published a photo of dozens in the newsroom holding up signs that said, “I condemn the editorial.”

“La Nacion’s editorials exclusively represent the editorial position of the newspaper and not the position of its journalists or employees in other parts of the company,” read an article published in response.

The editorial waded into especially sensitive territory — the legacy of the “Dirty War,” in which tens of thousands of people were killed or made to “disappear” by government forces, and ongoing human rights trials against the perpetrators.

Part of the concern was the timing, as it prompted fears that the newly elected Macri government might be more open to forgiving these crimes than voters had been led to believe. As Jonathan Watts and Uki Goñi wrote in Britain’s Guardian newspaper, “Many middle- and upper-class Macri supporters want the trials to end. They prefer to speak of ‘reconciliation’, a catchword for amnesty, now that hundreds of former officers have been convicted — many of so advanced an age that about 300 are estimated to have died so far in jail, either serving their sentences or pending trial.”

Macri said in his first news conference as president-elect that the trials should continue and that the judicial system should operate with independence, although he didn’t address the editorial directly.

Read more:

In Argentina, distrust over move to abolish intelligence agency

Orphaned in Argentina’s dirty war, man is torn between two families

By Joshua Partlow;Irene Caselli
24 November 2015

BUENOS AIRES — The stereotypical Latin American leader of the past generation has been a firebrand populist who could deliver hours-long impromptu speeches on television, painted the United States as the source of all evil and had probably fought as a guerrilla in some steamy jungle.

That type of leader — think Cuba’s Fidel Castro, Venezuela’s Hugo Chávez or Argentina’s Cristina Fernández de Kirchner (minus the guerrilla experience) — is the opposite of Mauricio Macri, the understated engineer and Buenos Aires mayor who was elected president of Argentina on Sunday.

Macri’s win comes as further evidence that the often-cited “pink tide” of the Latin American left has started to ebb. Across the region, countries such as Bolivia, Ecuador and Venezuela that had joined forces to oppose the United States and “neoliberal” capitalism have seen their influence diminish as they battle economic challenges. The severe slump driven by low oil and commodity prices in the region’s leader and biggest economy, Brazil, has pushed ratings for President Dilma Rousseff, a former guerrilla, into the single digits amid calls for her impeachment.

Nicaragua’s Daniel Ortega, a socialist ex-Sandinista guerrilla leader, is pro-business and beloved by Washington. Cuba is forging a rapprochement with the United States. A comedian with no political experience was just elected in Guatemala. Former Uruguayan president José Mujica, an ex-guerrilla famed for his ascetic lifestyle and liberal policies such as legalizing marijuana, was replaced by Tabaré Vázquez, a doctor. While support remains strong across the region for generous spending on social programs, the tone of the discourse has softened.

“You’re seeing this wave or tide or whatever you want to call it has run its course. They don’t have the economic sustenance to continue,” said Michael Shifter, president of the Inter-American Dialogue, a Washington think tank. “This kind of fiery leftist rhetoric was a function of the economic situation, and that has changed dramatically for many of these countries.”

In Macri’s first step as president-elect, a low-key Monday morning news conference at a table flanked by his aides, he said he would seek to suspend Venezuela from the South American trade bloc Mercosur, citing human rights violations and limits on free speech. That represents a sharp break with Fernández, the outgoing president, who has had close relations with Venezuela.

“To the brothers of Latin America and the whole world, we want to have a good relationship with all the countries,” Macri said in his victory speech. “The Argentine people have much to offer to the world.”

Macri comes across as a calm, fact-favoring engineer more interested in quietly tinkering with economic levers than addressing the masses in soaring palace-balcony speeches. His aides describe him as a shy, somewhat socially awkward man who took a while to adapt to the crowds on the campaign trail. Macri was no student militant in the Latin American mode; he has said he doesn’t even regularly read newspapers.

His appeal stems in part from his lack of a strong ideology — a sharp contrast to Fernández’s fierce nationalism. Macri, a scion of one of the country’s richest families, headed the soccer team Boca Juniors and is serving his second term as mayor of Buenos Aires, where he is known for sprucing up the capital, bringing in art and music performances, and adding bus lanes.

“He’s the anti-Cristina,” said Diego Guelar, a foreign policy adviser to Macri. “He’s a doer. That would be exactly his ideology.”

Roberto Digon, who served alongside Macri at Boca Juniors before the two fell out over sales of players, said that Macri initially had trouble giving a speech or getting his ideas across but that he improved over time, in part because he wanted “to show his father that he was an important and capable person.”

“He must have undertaken some public speaking and presentation courses, because he was very weak politically and ideologically,” Digon said. “Macri was brilliant when it came to business. He was very capable. He learned about politics little by little.”

Guelar, a former Argentine ambassador to the United States and a potential candidate for foreign minister, said Macri’s first foreign policy priority would be building closer ties with Brazil, a neighbor and trading partner that Macri on Monday called “our most important partner of the future.” The incoming president’s team also wants to pursue a free-trade deal with the European Union. Another goal is to clarify some aspects of the relationship with China, including making public the terms of a Chinese-funded space observatory — to ensure that it won’t have any military use — and reviewing a plan for a Chinese-built nuclear reactor.

As far as the United States is concerned, Macri seeks to settle a creditor dispute over debts from the financial crisis and cultivate a warmer overall relationship including encouraging foreign investment. During Fernández’s tenure, there were some bizarre episodes, such as in 2011 when Foreign Minister Héctor Timerman used a pair of nail clippers to open a case in the airport allegedly containing secret U.S. military codes.

Guelar said there would likely be the “normal conflicts of a normal agenda that you share with a partner and a friend,” such as trade disputes over whether Argentine oranges or meat would be allowed into the United States.

“What’s going to change is the American Embassy is not going to be the embassy of an enemy,” he said.

Macri’s chief strategist and campaign manager, Marcos Peña, added in an interview that “there are no reasons for us to have bad relations with the United States.”

“There can be a mature relationship of friendship, with a joint agenda to exchange and grow together,” he said. “The world is an opportunity, not a threat.”

By Christopher Whittall
Nov 24, 2015

Removing currency controls is one of several reforms President-elect Macri has vowed to lure investors

For Richard House, it was the black market currency booths he saw on a recent visit to Buenos Aires that dissuaded him from investing in Argentina.

Mr. House, head of emerging-markets debt at Standard Life Investments, had to pay for local hotels and restaurants at the official exchange rate of a little over 9 pesos to the dollar—far more expensive than the black market rate of around 16 pesos he found on the street.

The experience brought home the radical changes, including to the currency, needed to resuscitate Argentina’s flailing economy after this weekend’s presidential elections.

“Everyone knows there’ll be devaluation,” said Mr. House, whose firm oversees £250 billion ($378.89 billion) in assets.

Removing currency controls is one of several reforms president-elect Mauricio Macri has vowed to make in an effort to boost Argentina’s competitiveness and to lure foreign investors back to the country.

Many foreign investors don’t want to get in while the peso is artificially high, fearing that they’ll be the ones to bear the brunt in a coming devaluation. But once the devaluation happens, the decks are more clear. A concurrent relaxation of currency controls would also remove a major roadblock to investors worried that they mightn’t be able to get out.

Marcelo Assalin, head of emerging market debt at NN Investment Partners, hasn’t been involved in Argentina since early 2014, when he was put off by uncertainty around being able to repatriate money from the country.

But he said he could be tempted back if the Macri administration follows through on the reforms it has promised.

“Investors won’t invest in Argentina until we have a currency devaluation. Investors need to be comfortable they’re not getting into another trap,” said Mr. Assalin, whose firm oversees €180 billion ($191.23 billion) in assets.

But Mr. Macri’s victory is still encouraging, he says. “It’s a large country, with big opportunities,” Mr. Assalin added.

Maintaining an artificially strong peso helped the administration of outgoing president Cristina Kirchner contain inflation, which is already estimated to reach 25% this year.

But the currency controls hurt companies selling their goods abroad, deterred foreign investors and encouraged Argentines fearful of having their savings erased to hoard dollars.

Propping up the peso has also been costly, contributing to a sharp fall in foreign-currency reserves that have almost halved since 2011 to $26 billion.

Investors have welcomed the prospect of a more business-friendly administration, pushing up stocks and bonds in recent weeks after Mr. Macri moved ahead in the polls ahead of Sunday’s presidential election.

Mr. Macri previously said he would lift currency controls, but has yet to outline how he will do so.

Argentina has let the peso weaken somewhat this year, though at a pace far less than inflation. That means that, in real, trade-weighted terms, the peso has actually strengthened around 15% this year through the end of October, according to the Federal Reserve Bank of St. Louis.

But lifting currency controls and allowing the peso to fall more radically poses risks: from stoking already-high inflation to denting the value of local-currency investments when translated back into U.S. dollars.

Some investors reckon Mr. Macri will have to take a gradual approach to implementing his pro-market agenda given many measures are likely to be unpopular, his election victory was narrow and the opposition Peronist movement holds power in both houses of congress.

Denise Prime, a London-based emerging-market investment specialist at GAM Holding, expects Buenos Aires to weaken the peso by 25% in early December after Mr. Macri takes power to coincide with the lifting of an export tax on soybeans that is planned for the same time. That should incentivize farmers to sell their crop on the international market and show the benefits of a weaker currency, she said.

Still, Ms. Prime expects Argentine economic growth to take a hit in the first half of 2016, with the central bank likely having to raise rates in response to higher inflation following the currency weakening.

Pilar Tavella, an economist at Barclays, said a change of leadership at Argentina’s central bank, as well as a recapitalization of the institution, would be needed before the exchange controls are relaxed. Meanwhile, the Macri administration needs to outline a credible set of monetary policies to avoid the currency weakening too much, she said.

“It’s very hard to say what the value of the peso will be. A higher overshooting [on the currency] could lead us to have higher inflation,” she said.

Non-deliverable forward contracts, a type of derivative, show investors expect the exchange rate to fall to around 16 pesos to the dollar six months from now from the current official rate of around 9.7.

Money managers have factored in the impact of a weaker currency on their investments. Ms. Prime, whose firm oversees 124 billion Swiss francs ($121.57 billion) in assets, recently bought a small amount of peso-denominated debt issued by the European Bank of Reconstruction and Development, which she says trades with a yield of around 80%. Even if there is a sharp devaluation, the yield would still be sufficiently high.

—Taos Turner contributed to this article.

November 23, 2015

Voters weary of Mrs. Kirchner’s destructive populism
Mr. Macri a pro-market economic pragmatist
He would do well to repair relations with United States

Argentina’s voters opted for a better future on Sunday by electing Mauricio Macri to the presidency, replacing an exhausted political dynasty whose populist policies led the country to the brink of ruin with a pragmatic center-right figure aligned with pro-market forces.

After eight years with Cristina Fernández de Kirchner at the helm, following the four-year term of her late husband, Néstor Kirchner, the country was overdue for a change toward sound economics and less political and social polarization. Such was the promise of Mr. Macri’s underdog campaign. He chose tolerance over confrontation in defeating Danilo Scioli, a former vice president under Mr. Kirchner.

Voters were plainly tired of Mrs. Kirchner, who often demonized the private sector and anyone who disagreed with her government. Under her, Argentina’s domestic politics became progressively harsher and meaner. She thrived on controversy and political feuds. Self-promotion and blistering attacks on rivals and critics became hallmarks of her tenure at Casa Rosada, Argentina’s national palace.

On the international front, she courted Iran’s radical leaders and made common cause with leftist political figures throughout the region whose own populist schemes were as destructive as her own, if not more so, including the late Hugo Chávez and his successor as president of Venezuela, Nicolás Maduro.

Mr. Macri, the mayor of Buenos Aires, has wisely vowed to maintain some popular social programs introduced by the Kirchners, including cash subsidies for poor families. He also said he plans to keep some big nationalized companies, like Aerolineas Argentinas, under government control, but he also promised to steer a centrist economic course and work with, instead of against, the private sector.

It is in the realm of foreign policy where his ideas stand in sharpest contrast to those fostered by Mrs. Kirchner.

He has vowed to end her close ties with Venezuela and even said he will call for that country’s suspension from the regional economic group known as Mercosur for not complying with the bloc’s democratic clause requiring members to abide by democratic principles. That would further weaken an increasingly isolated President Maduro, who faces parliamentary elections on Dec. 6 that do not bode well for his party.

Relations with the United States are also likely to improve under Mr. Macri, who will happily tone down Mrs. Kirchner’s pointless anti-American rhetoric and reach out to both the U.S. government and private business. Years of strained relations with major industrial nations have left Argentina broke and economically isolated. It needs to restart its economy and restore a strong private sector alongside a business establishment that has confidence in the nation’s government — which was impossible under Mrs. Kirchner.

Nothing could do more to raise his nation’s international profile than for Mr. Macri to annul Argentina’s agreement with Iran to jointly investigate the deadly 1994 attack on a Jewish community center in Buenos Aires. This smelly deal, fostered by Mrs. Kirchner, is simply a cover-up of Iran’s responsibility for the attack. Instead, Mr. Macri should order an investigation into why the outgoing government was so willing to get in bed with Iran over this horrendous crime.

One election does not a trend make. But certainly the decision by Argentina’s voters to reject the Kirchner legacy suggests that the populist strain may have run its destructive course throughout Argentina and the region. It can’t happen too soon.

November 24, 2015

Argentina still has a long way to go before it can return to the international debt market, but its newly elected president Mauricio Macri got a small vote of confidence from Moody’s, which raised its outlook on the country’s credit rating.

Moody’s, the only one of the big three ratings agencies to still have a view on Argentina after the country defaulted on some of its debts in the summer of 2014, raised its outlook on the rating to positive from stable.

It kept its Caa1 deep junk rating on the country.

It said the change in outlook is based on the view that Mr Macri’s election victory will result in more market-friendly economic policies that will help turn around Argentina’s struggling economy.

Moody’s said:

The main driver of the outlook change to positive from stable is Moody’s expectation that Argentina’s policy stance will become more credit positive in the aftermath of Sunday’s elections in which Mauricio Macri was elected Argentina’s president for the 2015-19 term.

A prompt resolution of the holdout saga is a key Macri pledge in this regard, and is required for the government to borrow abroad, which it will probably need to do in order to meet upcoming debt service obligations

We expect the new administration to devote efforts to improving the economic and institutional environment over the coming months, through a series of reforms aimed at tackling persistently high levels of inflation and lack of data accountability.

By Kiran Stacey, Energy Correspondent
November 24, 2015

Two of the companies drilling for oil off the Falkland Islands are set to combine efforts after Rockhopper agreed an all-share takeover of Falkland Oil and Gas.

The companies announced on Tuesday that shareholders in FOGL would receive just under a third of a Rockhopper share for each of theirs.

Based on the valuation of London-listed Rockhopper at the end of Monday’s trading, that would value each FOGL share at 10.7p, an 11 per cent premium to Monday’s closing price, which values the combined company at about £57.1m.

The companies described the deal as a merger, but Rockhopper executives will be in charge of the combined group. Tim Bushell, chief executive of FOGL, and John Martin, its chairman, are to become non-executive directors. The board of FOGL said it would unanimously recommend the deal to its shareholders.

The history of drilling for oil and gas in the Falklands has been a bumpy one, marked by optimism and disappointment. Shares in Rockhopper hit close to £4 in 2012, but are now worth around 35p.

Rockhopper was the first company to discover oil in the seas north of the disputed islands, when it discovered the Sea Lion field in 2010. It had hoped to begin production from that field by 2017, but engineering challenges, a lack of financial support and the collapsing oil price have pushed that start date back.

Sam Moody, Rockhopper’s chief executive, told the Financial Times earlier this year he hoped a scaled-down plan for the field, costing $1.8bn or less in initial expenditure, could start production before 2020. The companies said on Tuesday the takeover would mean “enhanced prospects of progressing the Sea Lion project through its final investment decision”.

There have also been political challenges as Argentina continues to claim sovereignty over the islands it calls the Malvinas. Earlier this year, Argentina launched legal action against three British-listed companies, including both Rockhopper and FOGL, as well as their larger rival Premier Oil, for illegal drilling.

Pierre Jungels, Rockhopper’s chairman, said: “By combining Rockhopper and FOGL, we shall create a more coherent licence ownership structure in the North Falkland Basin, driven by a technically accomplished organisation with a strong exploration and appraisal track record, well positioned to access the opportunities in this emerging hydrocarbon province.”

John Martin, FOGL’s chairman, said: “The enhanced scale, capabilities and financial position of the merged FOGL and Rockhopper entity will provide FOGL shareholders with a platform from which to bring these quality resources into development.”

Rockhopper’s executives told the Financial Times on Tuesday they believed the deal would help attract another financial backer to help them begin production at Sea Lion, by offering increased access to assets in the area.

Mr Moody said: “In the discussions we have had with third party backers, it became apparent that access to those barrels [owned by FOGL] and that upside is something that had to be sorted out to get them in.”

Mr Moody also said the recent election of Mauricio Macri, the conservative mayor of Buenos Aires, as president, would improve the company’s prospects in the region.

Analysts at Citigroup said: “The combined company will be the largest licence and resource holder in the North Falklands basin and should benefit from increased scale that could help the company seek additional financing in order to help fund their share of future development (Sea Lion) and exploration and appraisal activities in the region.”

November 24, 2015

Mauricio Macri’s victory in Argentina’s presidential election has raised expectations of a big shift in policy after 12 years of leftist rule. Living up to those hopes won’t be easy.

Macri’s margin of victory was slender and he faces some formidable obstacles. To push through the economic liberalization he’s promised, the new president will have to be a smart tactician and choose his targets carefully.
Argentina’s reserves are at a nine-year low, and currency controls put in place by the administration of President Cristina Fernandez de Kirchner have created a black market that values the dollar at 15 pesos, versus 9.7 at the official rate. Macri’s campaign promise to let the peso float right away would have triggered a big devaluation and immediate instability. Wisely, he’s reconsidered. His first priority should be a fiscal program that restores the public finances, preparing the way for currency reform.

Macri also pledged to remove export taxes that have transformed Argentina’s productive farmers into world-class hoarders. This too makes sense as a medium-term goal — but in the short run and without offsetting measures, it would worsen the country’s fiscal deficit, which stands at a 30-year high. Temporary export-tax relief, pending a full fiscal reform, is the best way to proceed.

Restoring Argentina’s access to international credit markets is vital. That will take a deal with holdout creditors, reviled as “vulture funds” by Fernandez. Her party passed a law that requires any deal to be approved by the legislature, which is still dominated by Fernandez’s party and other Peronist factions.

To win sufficient backing, Macri will have to contend with a larger historical legacy. During the 1990s, Argentina did a lot to free its economy and enjoyed a period of strong growth. Soon, though, it all went wrong because of fiscal indiscipline and an increasingly overvalued exchange rate. The crash that followed was harrowing — and for many Argentines, discredited the very idea of liberalization.

Macri’s victory shows that voters are tired of heavy-handed populism and are willing to give pro-market reforms another chance. To seize the moment, the new president must be cautious but deliberate. He can’t end export taxes in one fell swoop, but he can abolish export quotas. He’ll have to move gradually on currency reform, but he can cut the tangle of red tape that suppresses trade without delay. Plans to fix the country’s dodgy statistics needn’t wait, nor his proposals to overhaul the economic policy-making machinery. Most urgent, though, are a new fiscal strategy and moves toward a settlement with creditors.

A lot is riding on Macri, and not for his country alone. If he puts Argentina’s limping economy on a path to faster growth, he could help lift spirits across the wider region and turn global investors’ attention back to Latin America’s enormous potential — something else that can’t happen fast enough.

November 24, 2015

BUENOS AIRES, Argentina – Opposition candidate Mauricio Macri won Argentina’s presidential election on Sunday after campaigning on a platform of change following 12 years of rule by Cristina Fernandez de Kirchner and her late husband.

Here is how Macri has explained what that change will involve:

– Macri reiterated Tuesday his plan to lift currency controls on his first full day in office. Asked by the Clarin newspaper if the controls would be removed gradually or on Dec. 11, he replied “December 11.” On Monday, he had said that Argentina would have only one exchange rate “when things get in order.”

– The president-elect says he would re-establish the central bank’s independence and would seek to remove bank President Alejandro Vanoli, whom he claims isn’t qualified for the job. “We’re going to see what the real state is of the public accounts is, what the real situation is of the central bank,” he said Monday. Macri will seek Vanoli’s removal before he assumes office on Dec. 10, Cronista reported Tuesday, citing sources within Macri’s economic team.
– Macri says Argentina should seek to end a conflict with holdout hedge funds from the 2001 default. Still, faced with criticism that he is selling the country out to “vulture” funds, he pledges to seek the best deal possible for Argentina. Perhaps seeking to strengthen his bargaining power, Macri said in an interview on Tuesday that while ending the standoff is important, it’s not his immediate priority.

– Macri’s energy adviser Juan Jose Aranguren said that 2 million families or 16 percent of households will continue to receive virtually free electricity. With the budget deficit soaring to about 7.2 percent of gross domestic product this year, many others may face cuts. Macri said in an interview with La Nacion on Tuesday that while the energy sector needs reforming, he will remove subsidies gradually and maintain them for the poor.

– Macri’s adviser Juan Jose Aranguren says energy independence is not a priority and would import some energy needs while global oil prices are low.

–Macri has said he will remove tariffs on grains including corn, wheat and sunflower seeds and says he will reduce the tax on soy by 5 percent per year. Two of his advisers told Bloomberg he may introduce a 90-day tax amnesty to encourage farmers to sell an estimated $8 billion of hoarded grains.

–Macri says he can reach single-digit inflation within two years. He has said his government won’t lie about official numbers and pledged to reform the statistics agency.

– Macri says he will revise the tax system to reflect inflation so that those who weren’t paying tax in 2007 won’t need to do so now. He said Monday he will raise the income tax threshold

By Charlie Devereux
November 24, 2015

Argentina’s President-elect Mauricio Macri tapped United Nations Secretary-General Ban Ki-Moon’s cabinet chief as his foreign minister in his first major appointment since winning Sunday’s election.

Susana Malcorra, who was born in Rosario in Santa Fe province in 1954, was appointed by Ban Ki-Moon in 2012. Prior to that she worked as Chief Operating Officer and Deputy Executive Director of the World Food Programme and as an executive at IBM and Telecom Argentina.

Macri defeated ruling party candidate Daniel Scioli in a runoff vote on Nov. 22 on a pledge to unwind President Cristina Fernandez de Kirchner’s currency controls and trade protectionism and open up Argentina’s economy. With foreign reserves plunging to a nine-year low, he has emphasized the need to lure foreign investment to replenish the central bank’s coffers.

“She is coming to add her vision of international politics in this new stage of change that we will soon begin,” Macri said in a post on his Facebook account. “Argentina needs to connect with the rest of the world’s countries in order to develop opportunities for growth and prosperity for all Argentines.”

By Carolina Millan
November 24, 2015

* Prompt resolution of `holdout saga’ is key pledge: Moody’s
* Moody’s to watch proposed reform of national statistics agency

Argentina’s credit outlook was raised by Moody’s Investors Service to positive amid optimism that president-elect Mauricio Macri will implement changes to boost the credibility of South America’s second-largest economy.

The decision comes two days after second-round presidential elections, where opposition candidate Macri beat ruling-party’s Daniel Scioli. Moody’s had previously raised the country’s outlook from negative to stable on Nov. 2, a week after a first-round vote.

Argentina has been locked out of international credit markets following a decade-long legal battle with holdouts from its 2001 default. The credit rating could further increase depending on “the nature of future policy announcements and the anticipated pace of implementation,” including a resolution with holdout creditors, according to the New York-based firm. Moody’s rates Argentina Caa1, or seven levels below investment grade.

“Mr. Macri has consistently and increasingly made clear his administration’s policies will represent a major market-friendly break from those observed during the last 12 years,” Moody’s analysts led by Gabriel Torres wrote in a statement. “A prompt resolution of the holdout saga is a key Macri pledge in this regard, and is required for the government to borrow abroad, which it will probably need to do in order to meet upcoming debt service obligations.”

Investors are now watching Macri’s next steps as he changes course from the populist policies of President Cristina Fernandez de Kirchner. Inflation is estimated to be at 24 percent, foreign reserves are at a nine-year low, the currency is overvalued and controls have damped foreign investors’ desire to bring their money to the country.

In addition to a resolution with the holdouts, Torres said in a phone interview that Moody’s will pay close attention to Macri’s proposed reform of the national statistics agency. The reliability of the country’s economic data has been questioned by the International Monetary Fund and analysts.

“One of the greatest challenges of analyzing Argentina is that official data is not reliable,” Torres said from Buenos Aires. “We don’t really know exactly what’s happening with unemployment, growth, inflation, and other measures. Having a reliable statistics agency will be a big signal that the country’s policies are changing.”

Standard & Poor’s analyst Daniela Brandazza wrote in a note Tuesday that the election results have no effect on the company’s selective default credit rating for Argentina’s sovereign debt.

“The foreign currency ratings will remain at ‘SD’ until Argentina cures the default, through payment, exchange, or other settlement,” she wrote. “If and when that happens, we will reassess the sovereign’s general credit standing, most likely raising the foreign currency rating to the ‘CCC’ or low ‘B’ categories.”

By Mac Margolis
November 24, 2015

Fresh off a bruising campaign that toppled a political dynasty and split Argentina in two, incoming president Mauricio Macri was blunt at a Monday news conference. “If I said I’d do it, we’ll do it,” he declared when asked if he planned to make good on his campaign promise to bring Venezuela’s autocratic regime to task for violating human rights and trampling democracy.

Macri vowed that he’d press neighbors and allies to question Venezuela’s claim to be a democracy. “It’s clear that what’s happening in Venezuela has nothing to do with the democratic commitments that we have pledged to keep in Argentina,” he said.

The broader message of the need to safeguard democracy should not be lost on Latin America, a region where authoritarians linger — in Venezuela, Ecuador and Bolivia — but a clubby pact keeps democratically minded leaders from raising a fuss.

Consider Brazil’s president, Dilma Rousseff, who was first elected on a vow to speak up when human rights were under assault. She has yet to raise her voice against Venezuelan President Nicolas Maduro, who like his predecessor, Hugo Chavez, has strengthened his hand by intimidating the critics he hasn’t jailed. Maduro has blocked all outside observers — save a delegation from the Chavez-inspired Union of South American Nations — from monitoring Venezuela’s Dec. 6 legislative vote, including Rousseff’s own envoy.

True, Luis Almagro, secretary general of the Organization of American States, recently sent Maduro’s government an 18-page letter rebuking it for stifling political dissent and rigging the rules against political opponents. But the organization’s Inter-American Democratic Charter has only been invoked twice against truculent countries since its 2001 signing. The one admonishment directed at Venezuela censured not Chavismo’s excesses, but enemies of the regime who plotted a 2002 coup against Chavez that later failed.

Macri’s tough stance is remarkable not only because of Latin America’s diffidence before strongmen, but also because of the Argentine government’s cozy relations with the Bolivarian Republic. Outgoing president, Cristina Fernandez de Kirchner didn’t just look the other way when Chavez, and then Maduro, trampled democratic rights. She struck a strategic alliance with Venezuela.

After a massive debt default shut Argentina out of the international credit market, then-president Chavez swooped in to buy Argentine bonds. When Chavez’s calamitous economic policies led to soaring inflation and emptied supermarket shelves, Fernandez came to the rescue with shipments of beef and other food staples in exchange for Venezuelan oil.

In 2007, an airport security officer in Buenos Aires caught a Florida businessman just off a flight from Venezuela’s capital carrying a suitcase with about $790,000. The money was reportedly an off-the-books donation from Chavez’s government to Fernandez’s reelection campaign.

In 2012, Argentina hosted a meeting of the Mercosur trade bloc where countries voted to suspend Paraguay from the group after its legislature ousted unpopular President Fernando Lugo. Paraguay happened to be the only country opposed to Venezuela joining the bloc, and with it out of the way, Venezuela was quickly welcomed into the fold.

Macri has now vowed to put Venezuela’s ejection on the table at Mercosur’s next meeting. Indeed, the new president — who takes office Dec. 10 — will have his hands full, trying to rescue a sinking economy and govern before a largely hostile legislature. But whatever his election means for domestic policy, it seems clear that Venezuela is about to lose its last best friend. In a region where democracy is still at risk, that’s something to celebrate.

By Richard Lough and Sarah Marsh in Buenos Aires and Daniel Bases in New York
Nov 24, 2015

Argentine President-elect Mauricio Macri plans to push through economic reforms that will buy him time for a “tough negotiation” with U.S. hedge funds suing the South American country over unpaid sovereign debt, he told the daily Clarin newspaper.

The pro-business Macri, who narrowly won Sunday’s presidential election, vows to get Argentina’s stalled economy moving again but needs to settle a decade-long legal battle with the holdout creditors before he can return to global credit markets.

“We’re not worried about this,” Macri said in the interview published on Tuesday. “We want to bring policy solutions that give us time to establish a framework for a tough negotiation so that we can defend the rights of Argentines.”

That will mean finding a quick way to bolster the central bank’s dwindling foreign currency reserves, which have fallen to a nine-year low below $26 billion as outgoing President Cristina Fernandez battles to prop up the peso currency ARS=RASL.

Macri campaigned on a promises of sweeping economic reforms to tackle weak growth, high inflation and a burgeoning fiscal deficit after more than a decade of free-spending leftist populism.
Macri told Clarin his government might issue debt to finance a backlog in payments for imports, estimated by economists at $8 billion.

Argentina’s debt fight with New York hedge funds led by billionaire Paul Singer’s Elliott Management plunged Latin America’s No. 3 economy back into default last year. The holdouts rejected sharp haircuts on their bondholdings after Argentina’s record 2002 default and demand full repayment.

Many Argentines supported leftist Fernandez’s unflinching stance against the creditors and the U.S. judge who ruled in favor of the creditors, and Macri has said he will haggle hard in talks.

Elliott Management did not responded to several requests for comment since Macri’s election win. A second complainant, Aurelius Capital Management, declined to comment on the election results.
The U.S. judge overseeing the litigation last month ruled in favor of complainants in 49 lawsuits seeking the same treatment as Elliott Management’s NML Capital Ltd and Aurelius Capital.

By Hugh Bronstein and Louis Charbonneau
24 November 2015

BUENOS AIRES/UNITED NATIONS (Reuters) – Argentine President-elect Mauricio Macri named U.N. Secretary General Ban Ki-moon’s chief adviser as his future foreign minister, signaling a sharp break from the diplomacy of outgoing leader Cristina Fernandez.

Macri said on Tuesday that Susana Malcorra will be his top foreign representative after his Dec. 10 inauguration.

U.N. diplomats and officials described Malcorra as the second-most powerful person in the United Nations system. Ban relies on her on matters ranging from the war in Syria to diplomatic minefields such as the Israeli-Palestinian crisis.

“She has vast and detailed knowledge of the agenda that moves the world,” Macri said in a statement.

Malcorra will succeed Fernandez’s Foreign Minister Hector Timerman, known on the international stage for his appeals over the Falkland Islands and campaign against bondholders, who he calls “vultures” for suing Argentina over defaulted sovereign debt.

“Argentina’s foreign policy under Fernandez was mostly domestically oriented, benefiting from a ‘rally round the flag’ effect,” said Buenos Aires-based political analyst Ignacio Labaqui “Macri’s first announcements signal a clear change.”

Fernandez, for example, is an ally of Venezuelan President Nicolas Maduro, who Macri says should be suspended from the Mercosur trade bloc over his jailing of political opponents.

A major plank of Fernandez’s foreign policy has been her failed effort to open talks with Great Britain over the sovereignty of the Falkland Islands, which are close to Argentina in the South Atlantic but governed by the British.

Macri, the business-friendly mayor of Buenos Aires who vows to retract Fernandez’s protectionist trade controls, won Sunday’s run-off vote against Fernandez ally Daniel Scioli. His election was hailed by Venezuela’s opposition as a blow against leftists across Latin America.

Malcorra was born in Rosario, which is also hometown to revolutionary Ernesto “Che” Guevara and soccer phenomenon Lionel Messi. She has been Ban’s chief of staff since 2012.

“Ms. Malcorra has been by my side during one of the busiest and most-turbulent periods in the history of the United Nations,” Ban said in a statement. “Throughout, I have treasured her advice, admired her dedication and benefited from her leadership.”

Prior to her appointment as Ban’s chief-of-staff, Malcorra was U.N. under-secretary-general for field support, making her one of a small group of the most important peace keeping officials.

(Additional reporting by Louis Charbonneau at the United Nations; Editing by Alan Crosby)

By Taos Turner
25 November 2015

BUENOS AIRES–President-elect Mauricio Macri has vowed to transform Argentina’s economy by curbing currency controls and restoring investor confidence. But while business leaders here welcome his plans, they say some policies, including a widely expected devaluation, could be painful in the short term.

Topping the list of challenges facing Mr. Macri when he takes office on Dec. 10 is a two-headed monster: 25% inflation and an artificially strong currency that has made Argentine goods uncompetitive abroad. Besides grappling with that, he will be called upon to move quickly to stanch the bleeding of foreign-currency reserves at Argentina’s central bank, which importers say owes them more than $9 billion for goods they have brought into the country.

“We don’t know how many dollars we’re going to get,” said Isela Costantini, president of General Motors Co. in Argentina, Paraguay and Uruguay. “It’s not that I’m telling you that we don’t know what’s going to happen in three months or in one year. We don’t know what’s going to happen next week.”

The dearth of greenbacks affects companies big and small, and has caused problems for imports of everything from automotive parts and surgical gloves to screws and bolts needed to maintain manufacturing equipment. It also hurts farmers.

“I import chemicals from China. I have to pay the Chinese and I can’t pay them because I can’t get the dollars to do it. So this creates a problem for me because if I can’t import, I have to close my factory,” said Gustavo Grobocopatel, chief executive of Grupo Los Grobo, one of Argentina’s biggest agribusiness firms.

Departing President Cristina Kirchner imposed the foreign-exchange controls in 2011, seeking to contain rising demand for dollars. But the move had the opposite effect. Since then the central bank’s official reserves have plummeted to below $26 billion from $52 billion–and many local economists say the bank’s net balance is negative.

“We don’t know how many reserves there are,” Mr. Macri said Monday, adding that Argentina’s economic statistics are so unreliable that his economic team will have to take office and evaluate the situation before announcing policy initiatives.

Mr. Macri has called for the resignation of Central Bank President Alejandro Vanoli, who is under investigation for allegations that he directed the bank to illegally sell dollar derivatives at a low exchange rate, potentially costing the central bank billions of dollars. Mr. Vanoli, who has accused Mr. Macri of planning a devaluation, denies wrongdoing and says the bank was acting to defend the value of the peso.

Former government officials and economists warn that currency controls are difficult to dismantle, and that doing so abruptly could lead Argentines to ditch their pesos en masse, making it even harder for the central bank to oversee a smooth transition to a new exchange-rate system.

Many Argentines have already been buying dollars to protect their savings ahead of a possible devaluation. Others have stocked up on cars, televisions and other goods before prices rise.

“I came to the shopping center today to buy a cellphone because I was told prices would rise,” said Juliana Levy, 38, a ballet dancer. “I don’t think Macri will devalue abruptly. In any case, in Argentina we’re used to devaluations.”

Argentina has a largely fixed official exchange rate, which is now 9.68 pesos to the dollar. But since the government doesn’t have enough dollars to meet demand, people have turned to a thriving black market, where dollars currently sell for around 15 pesos.

Mr. Macri has said those diverging rates could eventually converge if the government let the fixed rate slide, but he has provided few details about when this might happen. And he has said he would be a Nobel Prize winner in economics if he knew exactly what that rate would be.

“There is a significant amount of money outside of Argentina from Argentines who are waiting for a more benign economic environment. So I suspect the pain will be short-lived,” said Jorge Mariscal, chief investment officer for emerging markets at UBS Wealth Management, which manages $1 trillion in assets.

Observers say Mr. Macri will also have to reduce costly gas and electricity subsidies to narrow a rapidly rising budget gap. But that could hit poor people hard if they are not targeted exclusively to middle and upper-income households.

“One of the things Argentina has learned in recent years is that it has to change things in ways that don’t leave people behind. Otherwise, the changes will be unsustainable,” said Mr. Grobocopatel.

Mr. Grobocopatel, known here as the “soybean king” because of his agricultural production, estimates that exporters are hoarding between $6 billion and $10 billion worth of soybeans and other food products. Dollar inflows could rise significantly if Mr. Macri cuts a 35% export tax on soybean exports and fixes the exchange-rate system.

Mr. Macri is also hoping to obtain fresh funding from international banks which are already negotiating a multibillion package of loans to the country, according to a person familiar with the matter.

Alberto Messer contributed to this article.

By Dimitra DeFotis
November 24, 2015

Moody’s Investors Services said the outlook has improved for Argentina’s credit market, though it cautioned investors are still likely to suffer losses on defaulted debt.
The Global X MSCI Argentina exchange-traded fund (ARGT) is down 0.3% today. State-controlled oil producer YPF (YPF) is down 1.3%. Banks Banco Macro (BMA),BVA Banco Frances (BFR and Grupo Financiero Galicia (GGAL) are all lower, as is internet sales platform MercadoLibre (MELI).

Moody’s changed its outlook to postive from stable on Argentina’s Caa1 issuer rating, and on (P)Caa2 foreign-legislation and restructured local-legislation foreign currency obligations, citing Mauricio Macri’s narrow win over Daniel Scioli, the would-be successor to outgoing Peronist President Cristina Fernandez de Kirchner likely means “a major market-friendly break” from the last 12 years:

“The main driver of the outlook change to positive from stable is Moody’s expectation that Argentina’s policy stance will become more credit positive in the aftermath of Sunday’s elections in which Mauricio Macri was elected Argentina’s president for the 2015-19 term … President-elect Macri will take office on 10 December, becoming only the third non-Peronist President since 1983 …

A prompt resolution of the holdout [bond-investor] saga is a key Macri pledge … and is required for the government to borrow abroad, which it will probably need to do in order to meet upcoming debt service obligations. Official reserves have fallen to below $22 billion, raising uncertainty about the government’s ability to meet 2016 debt service obligations and adding pressure for a swift resolution with holdout creditors.

In addition, we expect the new administration to devote efforts to improving the economic and institutional environment over the coming months, through a series of reforms aimed at tackling persistently high levels of inflation and lack of data accountability. At around 25%, Argentina’s inflation rate is one of the highest in the region and among sovereigns rated by Moody’s.”

That said, Moody’s affirmed ratings on defaulted bonds, writing:

“The (P)Caa2 rating on the foreign legislation and restructured local legislation foreign currency obligations reflects the likelihood of higher losses to investors from the continuing default of bonds caught in he ongoing legal proceedings in US courts, thereby differentiating this portion of Argentina’s debt from the rest.”

Nov. 25, 2015

After 12 years under the leftist De Kirchners, Argetina just elected a center-right president—but can he fix the country’s disastrous economy?

After 12 years of rule by Nestor de Kirchner and his wife, Cristina Fernandez, Argentina welcomed a new era on Sunday with the former mayor of Buenos Aires, Mauricio Macri, winning the presidential election.

Macri is the first president, since the return of democracy in 1983, to not belong to one of the two main parties in Argentina, the Radicalists or the Peronists. This could end up being a major challenge for his government. He also inherits deep economic difficulties from outgoing president Cristina Fernandez de Kirchner’s time in office.

Unlike the left-leaning Fernandez de Kirchner, Macri is a center-right politician and former businessman who has promised to lift foreign exchange market regulations, devaluate the peso, and reduce taxes on exports. He also has said he plans to implement several harsh or unpopular measures, such as cuts in public spending and higher prices for public services.

The biggest problem that Argentina’s economy faces right now is the appalling lack of U.S. dollars in the economy and the Central Bank reserves, along with a sky-high inflation rate, which is expected to rise over 30 percent next year.

To solve the first issue, Macri is expected to bring a dramatic shift in the country’s relations to the international financial community. At the top of his to-do list is definitively closing the 2002 default complaints and regaining access to international capital markets. He also will look to revive relationships with the International Monetary Fund (IMF) and other multinational financial entities.

Also on the agenda: cleaning up the state’s statistics institute, which now provides official but unreliable data on prices, employment and social indicators such as poverty and economic growth. Getting accurate data will be crucial in rebuilding foreign confidence in Argentina’s credit-worthiness, especially as Argentina has issued bonds that adjust by inflation or GDP.

The new political and economic era that Macri promises to inaugrate in Argentina is also of major importance to the rest of Latin America. In the past decade, both Kirchner administrations had chosen the anti-U.S. governments of Venezuela and Ecuador and Boliiva as main allies. This will surely change, as Macri has already announce that he plans to overhaul Argetina’s foreign policy. And indeed, after his victory, he repeated statements he had made during the campaign about requesting Venezuela’s suspension from Mercosur for “breaking” the regional bloc’s democratic clause.

And while Merci said he expects to “build good relations with our brothers,” he also warned that Venezuela must respond to the bloc’s democratic clause and cautioned the Nicolás Maduro administration about its ‘persuction’ of opposition leaders there. He also vowed to improve ties among Mercosur members, especially Brazil, and the with the European Union.

“We have to recover the dynamics in the Mercosur and with the European Union to converge towards the Pacific Alliance,” said Macri, who will assume office on December 10. “Integration will have to do with the dynamics of the Mercosur that has been frozen over the past years.”

By Thomaz Favaro
November 25, 2015

BUENOS AIRES – After years of viewing Argentina as a challenging jurisdiction to do business, multinational corporations greeted the election of Mauricio Macri, mayor of Buenos Aires and leader of center-right opposition Let’s Change (Cambiemos) coalition, as a breath of fresh air. Marci won the first ever presidential run-off in Argentina’s history on November 22, ending a twelve year period of increasingly statist government under presidents Cristina Fernández and her late husband and predecessor Néstor Kirchner (2003-2007).

Macri has been mayor of Buenos Aires since 2007 and in that time has been one of Fernández’s staunchest critics. He entered politics in 2005, when he founded the Republican Proposal party (PRO) in 2005 – prior to that he was a civil engineer and successful businessman. Together with the Civic Radical Union (UCR) and a range of smaller parties they created the conservative, market-oriented Cambiemos coalition in this general election.

Once thought to be a long-shot, Macri took 51.4% of the vote, winning outright in the populous provinces of Jujuy, La Rioja, San Luis, La Pampa, Mendoza, Córdoba, Santa Fe and Entre Ríos, as well as in the capital Buenos Aires.

Opponent Daniel Scioli, President Cristina Fernández de Kirchner’s handpicked choice as her successor, only took 48.6% of the vote. So ends the long tenure of kirchnerismo with its expropriations, bondholder lawsuits and defaults.

While Macri has pledged not to roll back many of the welfare programs introduced by the Kirchners, the country’s trade unions as well as the political opposition will monitor the implementation of Macri’s economic plans and could take to the streets if reforms are perceived to run against their interests.

In the election, the fragile state of Argentina’s economy proved to be pivotal. Rising government deficit, legal fights with creditors abroad and efforts to mask persistent high levels of inflation triggered the electorate’s desire for a partial liberalization of economic policies. The government’s confrontational stance against its critics – including the media and the judiciary – has also generated a backlash against Fernández. Macri’s focus on reducing state intervention via protectionism, currency controls, price controls and export taxes hit the nail on the head for many Argentines.

Under Macri, the Economy Ministry will not be headed by a single individual. Instead a Treasury and Finance Minister along with a team of six officials will share the duties of running Argentina’s economy as members of an economy cabinet.

Despite Macri’s mandate, his ability to pass and implement structural reform will be limited by his party’s weak position in Congress. Fernández’s Front for Victory (FPV) remains a clear majority in the Senate (upper houses) and a plurality in the Chamber of Deputies (lower house). Thus many reforms will be negotiated on a case-by-case basis to secure approval.

The reduction of public spending and the state’s role in the economy will produce an initial shock likely to trigger bouts of civil unrest. This threat is further complicated by the fact that Macri will become the third non-Peronist leader since the end of military rule in 1983. Neither of his two predecessors finished their terms, a reminder of the difficulties entrenched Peronist interests may give Macri if he proves unable to negotiate with the opposition.

By Mark Weisbrot

The election of right-wing candidate Mauricio Macri as Argentina’s president on Sunday, which was unexpected just a few months ago, is a setback for Argentina and for South America.

In the past 13 years, Argentina made enormous economic and social progress. Under the Kirchners (first Néstor and then Cristina Fernández de Kirchner), poverty fell by about 70%, and extreme poverty fell by 80%. NOT REALLY (This is for 2003 to mid-2013, the last year for which independent estimates are available; they are also based on independent estimates of inflation.) Unemployment fell from more than 17.2% to 6.9%, according to the International Monetary Fund. .

But Daniel Scioli—the candidate of the Peronist “Front for Victory” party who represented the governing coalition, including President Fernández—did not do a good job defending these achievements. He also didn’t seem to make clear what he would do to fix the country’s current economic problems. In the past four years, growth has been slow (averaging about 1.1% percent), inflation has been high, and a black market for the dollar has developed. This gave Macri (and his “Cambiemos,” or “Let’s Change” coalition) an opening to present himself as the candidate of a better future.

With skilled marketing help from an Ecuadorean public relations firm, Macri defined himself as something far more moderate than he is likely to be, winning over voters who might otherwise be afraid of a return to the pre-Kirchner depression years.

Some of the things Macri has indicated he would do could have a positive impact, if done correctly. He will likely cut a deal with vulture funds that have been holding more than 90% of Argentina’s creditors hostage since New York judge Thomas Griesa ruled in 2014 that the government is not allowed to pay them. If the cost isn’t too high, it could reopen a path for Argentina to return to international borrowing—something Scioli would likely have also done.

A liberalization of the exchange rate that got rid of the black market could be a big step forward. But much depends on how it is done: If it causes inflation to spike and the government does nothing to protect poor and working people, they could lose a lot.

Macri may also take measures to bring down inflation, which is something that needs to be done, but he’s likely to do so by shrinking the economy. He wants to reduce the central government budget deficit, which will grow as a percentage of GDP with austerity. Given his ideology, there is serious risk of a downward spiral of austerity and recession, as the country suffered from 1998 to 2001. If there is inflation from the devaluation, this could make matters worse.

In his campaign statements, Macri made it clear that he is against a government role in promoting industry, so the country’s economic development is likely to suffer as a result. He has proposed tax cuts for upper-income groups. That suggests that budget cuts are in the offing, since Macri has pledged to reduce the government budget deficit. The majority of Argentines are likely to suffer from such an economic transition.

But Macri won’t have a working majority in Congress, so it’s unclear how much he can do. Immediately, he has demonstrated his overwhelming loyalty to the United States government, which had been previously made clear in confidential U.S. embassy cables published by WikiLeaks. One of his very first statements after being elected was to denounce Venezuela and threaten to have the country suspended from the Mercosur trading bloc of South American nations. The issue wasn’t of pressing concern to Argentine voters, so it may very well be related to a U.S.-led international campaign to delegitimize Venezuela’s government and the elections in the run up to its Dec. 6 elections.

In joining the effort against Venezuela, Macri showed a willingness to take steps that no other South American president would do. In the past decade, South American presidents have repeatedly joined together to defend democracy in the region when it was under attack—with Washington on the other side—not only in Venezuela in 2014, 2013, and 2002, but in Bolivia (2008), Honduras (2009), Ecuador (2010), and Paraguay (2012). Macri runs a serious risk of damaging relations in the Western Hemisphere if he continues down this road.

Washington has maintained a policy of “rollback” and “containment” against almost all of the leftist governments that have won elections in the 21st century. So there is quite a bit of excitement among the business and foreign policy elite over the wave of setbacks among Latin America’s left, with Brazilian President Dilma Rousseff facing a recession and political crisis and Venezuela’s ruling Chavista party confronting an economic crisis and possible loss of its first national election in 17 years. Articles are already sprouting up, welcoming the long-awaited demise of the Latin American left.

But reports of this demise, to paraphrase Mark Twain, are somewhat exaggerated. A more likely outcome is like what we saw in Chile, where a lackluster candidate was unable to take advantage of Socialist Party President Michelle Bachelet’s 80% approval rating and lost to a right-wing billionaire in 2010. He lasted four years, and then the country went back to Bachelet.

Argentina and the surrounding region have changed too much over the past 15 years to return to the neoliberal, neocolonial past. The Washington foreign policy establishment may not understand this, but Macri’s handlers did. That’s why they took the trouble to package him as something very different from what he is.

By Andres D’Alessandro and Chris Kraul
24 November 2015

BUENOS AIRES — Sweeping changes lie ahead for Argentina’s economy and foreign policy, including an end to protectionism and unquestioned support for the leftist government in Venezuela, President-elect Mauricio Macri told reporters Monday.

Macri spoke in Buenos Aires at his first news conference after winning Sunday’s runoff election against Daniel Scioli.

The victory marks the end of 12 years of Kirchnerismo, the populist left-leaning politics of outgoing President Cristina Fernandez and her late husband and predecessor, Nestor Kirchner.

Macri said he will implement spending cuts and a slate of free-market policies that will reverse the controls on the economy instituted by Fernandez.

Her populist programs sought to keep a lid on domestic prices by shutting off access to foreign markets for Argentine producers of staples such as beef, corn and wheat.

But critics say such controls distorted the economy, stunted exports and scared away foreign investors.

Addressing a primary voter concern, Macri said he will declare a state of emergency against the “unpardonable” rise in violent crime across Argentina spurred by an increase in drug use and trafficking. Policing techniques that he said brought crime down in the capital, where he has served as mayor since 2007, will be instituted.

“It’s a pressing need that we advance professionalism of the nation’s security forces, just as we accomplished it here in the metropolitan force,” Macri said.

Although Macri promised to rein in government spending that will produce a 7 percent fiscal deficit this year, he has also vowed to retain her expanded social programs that include education subsidies, pensions and senior citizen care.

The 56-year-old former soccer club president beat Scioli, the governor of Buenos Aires state, by 51.4 percent to 48.6 percent, with a relatively high turnout of 82 percent.

Macri will meet with Fernandez on Tuesday to begin the transition before taking office Dec. 10.

The incoming president faces serious challenges implementing his proposals as his coalition of parties called Change controls only a minority of seats in both houses of Congress.

Macri served notice that Argentina’s close relationship with the leftist government of Venezuelan President Nicolas Maduro may be coming to an end. He voiced support for opposition politicians, including former Caracas borough Mayor Leopoldo Lopez, jailed since 2014 on what critics maintain are trumped-up charges.

He said he would also propose that Mercosur, the trade bloc of South American nations, suspend Venezuela for its “undemocratic” actions against opposition politicians.

Argentina’s confusing currency policy is also coming to an end, with Macri promising a “single exchange rate.” The government currently enforces an official exchange rate between the peso and dollar that is below the unofficial black market rate. Macri has called the policy, intended to contain inflation, “an error.”

Many Argentine farmers who opposed Fernandez’s restrictions on their access to foreign markets applauded Macri’s election. They hope it will usher in a period of dialogue with farmers and better access to international markets.

Macri also said he would nullify a memorandum of understanding that Fernandez signed with Iranian officials in which she promised to try to lift an Interpol arrest order for 10 Iranians wanted in connection with the 1994 bombing of a Jewish cultural center in Buenos Aires that killed 85.

A civil engineer by profession, the president-elect hails from the city of Tandil in Buenos Aires state and is the son of one the country’s richest men, Franco Macri, a construction magnate.

By Silvio Canto, Jr.
November 24, 2015

Argentina made an important right turn on Sunday. Mauricio Macri, the opposition candidate, won Sunday’s election. He is not perfect, but he offers a more realistic option than the misguided populist policies of the incumbent party.

At the same time, argentinos longing for change will have to be patient, because Mr. Macri is inheriting a mess of huge proportions, as we read in Bloomberg:

Neither candidate has addressed the elephant in the room: the reforms needed to reduce inflation, fix a fiscal deficit of 7.2 percent of gross domestic product – the largest in over 30 years – and lure back investment dollars which have stayed away due to currency controls, a lack of regulatory predictability and a decade-long dispute with holdouts from the 2001 default.

Macri’s victory is also a huge defeat for “the Kirchner way,” the populist philosophy that guided Argentina for a decade. John Fund has a good analysis about this point:

Argentina’s election on Sunday represented the starkest choice the country has faced since the authoritarian era of Juan and Evita Peron began in the 1940s.

The seven-point victory of center-right candidate Mauricio Macri may herald a real shift towards more sensible economics and less anti-U.S. policies in Latin America.

Defeated Peronist candidate Daniel Scioli was a hand-picked defender of the interventionist economics of his party’s retiring President Christina Fernandez de Kirchner.

In a recent TV interview, Scioli summed up the differences between him and Macri simply: “I defend the role of the state and he defends the role of the market.” He accused Macri, a leading businessman and mayor of Buenos Aires, of representing policies of “savage capitalism” that would devastate the poor.

Argentina’s voters have often fallen for such rhetoric, but not this year.

The record of Kirchner and her Peronist party was a disaster and not easily ignored.

It won’t be easy but Mr. Macri is a better option. He has a better chance of attracting the kind of foreign investment that the country needs to create jobs and help the struggling middle class.

Good luck to Mr. Macri.

Written by Charles Scaliger
November 24, 2015

Weary of years of corruption, repression, and economic malaise under hard-Left president Cristina Fernández, Argentines have elected conservative Mauricio Macri (shown), businessman, two-term former mayor of Buenos Aires, and sometime owner of one of Argentina’s two most popular soccer clubs, Boca Juniors.

The Argentine economy has been reeling from the effects of a default on government debt — Argentina’s second in the last 15 years — and from repressive currency controls imposed by the dictatorially-inclined Fernández. With inflation running over 20 percent and roughly one fifth of the entire government budget allocated to subsidies, Argentina will have to take tough medicine to remedy one of the most intractable economic crises in history.

Macri is only Argentina’s third president since 1983 not to have belonged to the country’s Peronist party. For generations, Argentina has been addicted to welfare-state programs and the massive public debts that they unavoidably entail, making this beautiful and formerly wealthy South American nation a poster child for political instability and chronic inflation. When this author was living in Argentina in the late 1970s, inflation was running at 100 percent or more.

Argentines did not save money; instead, they purchased real estate, foreign currencies, precious metals, and any other assets that retained value.

In the early 1980s, the military junta fell after the failed invasion of the Falkland Islands, and Argentina restored popularly-elected government.

But old habits die hard. Over the ensuing three decades, Argentina has not relinquished her embrace of socialism, causing debts to spiral higher and higher and inflation to continue taking its toll on what was once one of the world’s largest economies.

In December 2001, after an acute depression of almost four years, Argentina finally defaulted on its massive foreign debt. At the time, the default represented about one seventh of all debt owed by the developing world.

In the years since, the combative leftist Argentine presidents Nestor Kirchner and his widow, Cristina Fernández, managed to bluff their way (temporarily) out of the debt crisis by negotiating settlements with some of their creditors and rebuffing the others. For a few years, Argentina appeared to be on the mend.

But Argentina’s socialist policies caused new debts to pile up. Cristina Fernández, instead of proposing spending cuts and downsizing the country’s gargantuan public sector, placed all the blame for the country’s misfortunes on wicked “vulture” capitalists overseas. The xenophobic rhetoric played well — for a while. But eventually, Argentina’s economy worsened to the point that Argentines were again hiding their assets in foreign accounts and carrying out transactions in U.S. dollars. The desperate response of the Fernández government was to impose strict currency controls, which forbade citizens from acquiring dollars or taking other actions to avoid using Argentine pesos — and created a huge black market in U.S. dollars.

After several years of currency controls and deepening economic malaise that included a second default last summer, Argentines appear to be finally fed up. Having defeated Daniel Scioli, Fernandez’s handpicked successor, Macri appears to have broad public support for a new economic direction that may involve lifting of currency controls and a return to the bargaining table with foreign creditors so as to once again open global credit markets.

The true state of Argentina’s economy is probably much worse than advertised, since the Fernández administration is widely believed to have manipulated economic data to conceal inconvenient truths. Cristina Fernández, a hardline doctrinaire socialist (and friend of Hillary Clinton) made herself unpopular both at home and abroad for her abrasive, histrionic style of leadership, blaming all of her and Argentina’s woes on foreigners and greedy financial capitalists.

Mauricio Macri’s honeymoon with the Argentine public and with lawmakers is likely to be short-lived, as Argentines discover the price to be paid for so many years of public profligacy. Whether he can succeed where previous would-be reformers, such as Raúl Alfonsín and Fernando de la Rúa, failed, remains to be seen. It is worth noting that neither Alfonsín nor de la Rúa finished their respective terms in office, with Alfonsín resigning six months early with hyperinflation consuming the economy and de la Rúa fleeing by helicopter from the presidential residence as angry mobs raged and rioted outside. The reforms being contemplated by Macri and his allies are sure to cause a little “short-term pain for long-term gain,” according to Edward Glossop, market analyst with Capital Economics, but will lead to more prosperity after 2017.

The question is whether Argentines, accustomed for generations to short-term socialist panaceas, will have the patience to wait that long.

Nov 24, 2015

BUENOS AIRES, Argentina – Argentine President-elect Mauricio Macri on Monday prepared to confront myriad problems in Latin America’s third largest economy, including soaring prices and high government spending that are a legacy of outgoing President Cristina Fernández.

Macri, fresh off his historic election win late Sunday, began laying out how he would achieve some of the promises that helped him put an end to 12 years of “Kirchnerismo,” a movement aligned with the poor led by Fernández and her late husband and predecessor, Néstor Kirchner.

Macri, the outgoing mayor of Buenos Aires who will assume the presidency Dec. 10, said a key task is just spelling out the true nature of problems such as 30 percent inflation and government spending that many private economists warn is not sustainable.

“Argentina today doesn’t have credible information on the economy,” said Macri, criticizing the Fernández administration for widely discredited statistics on everything from inflation to poverty rates. “We need to know the real state of public accounts.”

Macri said that instead of a single economy minister, he would build a cabinet with six ministers assigned to specific areas of the economy.

Such a structure is in line with Macri’s technocratic approach, which emphasizes decisions based on data analysis and efficiency over style. It also cuts a sharp contrast with Economic Minister Axel Kicillof, a top official in the Fernández administration who wielded enormous power over key policies, such as the decision not to negotiate with a group of creditors in the U.S. that took Argentina to court in New York and won.

Macri reiterated his promise to lift unpopular restrictions on buying U.S. dollars and thus eliminate a booming black market for foreign currencies that creates distortions in the economy. He said the restrictions were an error that impeded growth, but did not provide details on his next steps to address the system.

Lifting restrictions would likely lead to a sharp devaluation of the Argentine peso, which officially trades at 9.5 to the U.S. dollar but on the black market is around 16 pesos.

With foreign reserves around $26 billion, low for such a large economy, Macri’s administration would need a quick infusion of dollars to keep the government afloat and meet the demand of Argentines looking to trade their pesos.

That could come from many different international economic bodies, but ultimately would require some fast reforms to signal that structural changes to the economy are forthcoming.

Macri will also likely encounter fierce resistance in Congress, where he doesn’t have majorities in either chamber. The makeup of Congress, filled with many Fernández loyalists including her son, is particularly important for the long-standing debt spat with a group of creditors in the U.S.

By law, Congress has to approve any measures regarding the country’s debt. The Fernández administration refused to negotiate despite repeated rulings by a U.S. federal court judge against Argentina, a stance that ultimately kept the South American nation from accessing international credit markets.

The close finish in Sunday’s historic runoff — Macri got 51.4 percent of the vote compared to 48.6 percent for Scioli — will embolden ruling party stalwarts to question his moves.

“It was practically a tie,” said Fernández’s Cabinet chief Aníbal Fernández, adding that the ruling party “will be preparing to return to power.”

Macri’s own background and the bruising campaign could feed into Argentina’s political polarization after more than a decade of left-leaning government.

He hails from one of the country’s most prominent families and rose to fame as president of the popular Boca Juniors soccer club.

Ruling party candidate Daniel Scioli frequently attacked Macri, saying he would subject this nation of 41 million people to the market-driven policies of the 1990s, a period of deregulation that many Argentines believe set the stage for the financial meltdown of 2001-2002.

Despite the challenges, Macri’s win signals a clear end to the era of Fernández and her late husband. During their years in office, the power couple gained both popularity and sharp criticism by spending heavily on programs for the poor, raising tariffs to protect local economies and increasing government involvement in all walks of life — much of which Macri wants to roll back.

Macri has also made clear that he’ll break from some of the previous administration’s alliances, such as its close relationship with Venezuela.

On Monday, he reiterated his promise to push to expel Venezuela from the South American trade bloc known as Mercosur because of the jailing of opposition leaders. That would be a huge change for a continent where many countries, including neighbors Chile, Brazil and Bolivia, have left-leaning democratic governments that have maintained close ties with Venezuela.

As if to emphasis his commitment, during his victory celebration Sunday night, Macri took a picture with Lilian Tintori, the wife of Leopoldo López, an opposition leader in Venezuela who has been jailed since early last year.

By Michael Lohmuller
Tuesday, 24 November 2015

Argentina’s newly elected president Mauricio Macri has pledged to implement tough anti-crime measures as soon as he assumes office, but he faces a tough task in reversing the country’s slide into insecurity and the spread of organized crime.

After winning a hotly contested election by 51 percent of the vote against opponent Daniel Scioli’s 49 percent on November 22, Macri announced one of his first acts after taking office on December 10 will be to declare a state of emergency against the “unpardonable” rise of violent crime, reported the Los Angeles Times.

“We have to start from the first day [in office] to take control of the territory,” Macri asserted, sending “a clear message to those [drug traffickers] who are hoping to install themselves and operate in Argentina.”

Macri added that government inaction to halt the advance of drug trafficking in Argentina under the administration of his predecessor, Cristina Fernandez de Kirchner, has been “incomprehensible and inexcusable.”

Once in office, Macri said a plan would be put in motion to “professionalize” provincial police forces. Policing techniques that Macri claims reduced crime in Buenos Aires, where he has been mayor since 2007, will be instituted across the country, according to the Los Angeles Times.

During his campaign, Macri promised to “defeat drug trafficking,” and expressed support for militarizing drug policy, including the shooting down of suspected drug planes.

InSight Crime Analysis

Reining in Argentina’s rising violence levels and growing role in the regional drug trade will be an uphill battle for Macri.

In recent years, organized crime and drug trafficking have been on the increase in Argentina, with foreign drug trafficking organizations establishing a strong presence and becoming increasingly entrenched in the country. These foreign groups use Argentine territory as a transit point for drug shipments destined for West Africa and Europe, and also help fuel a growing domestic drug market.

Of further concern — and potential frustration for Macri’s anti-crime efforts — is that the spread of drug trafficking has demonstrated signs of hollowing out Argentine state institutions via corruption, with recent cases including allegations over the complicity of government officials in cocaine production and federal judges taking bribes from drug traffickers. Such criminal allegations have even reached the upper-echelons of government, with Anibal Fernandez, Argentina’s current Chief of the Cabinet of Ministers, accused of heading a precursor chemical trafficking network.

Compounding the challenges Macri will face in enacting new security policies is that he lacks majority support in Congress, and is inheriting a deeply divided political environment. However, Macri can at least take some comfort in that Argentina’s judiciary appears to be ready to take on a more active role in supporting government attempts to dismantle criminal networks operating in the country.

By Guillermo A. Makin
24 November 2015

The Argentine electoral system exhibited its virtues by showing that an incumbent can be defeated, and a centre-right president has been elected. Will he repeat the right-wing’s major errors of the past?

Mauricio Macri, of the centre right party operating with the acronym PRO, for Republican Promise, is now the president elect of Argentina, after winning the runoff election as candidate for the Cambiemos (Let’s Change) political alliance, a coalition integrating the PRO, the Coalición Cívica ARI and the Unión Cívica Radical . He will be sworn in on 10th December.

In his acceptance speech, Macri said that he had learnt much whilst campaigning. He already signalled his swift learning curve when he unveiled the first statute of Perón in Buenos Aires city, the rich province Macri governed for 8 years, making a virtue of favouring the well off. He puzzled most anti-Peronists stating below Perón’s statue that “I owe a lot to Perón” and that none of the recent social reforms will be rolled back. If this is the case, the defunct and wily old general will have chalked up an unexpected victory, now that even anti-Peronists seem to favour the Peronist policies.

It will be a new form of hegemony. Anti-Peronists, if we go by Macri’s latest statements, appear to have been converted. Whatever is the case, by signalling this volte-face Macri has delivered a hostage to fortune, allowing the 48% that did not vote for him to think he has broken his promises if he backtracks.

On the positive side, the Argentine electoral system, long known to be fraud proof, exhibited its virtues by showing that an incumbent can be defeated and that the results are known speedily. By midnight, 60% of the polling centres had sent in results verified by representatives of all parties. The most momentous news item is that, for the first time since electoral reform introduced universal male suffrage in 1912, the right wing has shown its is able to win an election.

Torcuato Di Tella, in a famous article in Desarrollo Económico, one of the best social sciences journals published in Argentina, argued in 1965, whilst Peronism was banned, that coups resulted from the inability of the establishment to win elections. Likewise, in 1977 Alain Rouquié, a French political scientist, writing about the military, since the 1980’s no longer a relevant political actor, said that coups were “the revenge of the defeated by universal suffrage.” With PRO’s electoral success, narrow though it may be by some 3%, the Argentine political game sheds one of its features: the establishment is no longer unable to win elections. As from the 10 December Argentina is under new management: the country will be run by its proprietors

Governability and the economy

Now PRO and its allies will have to show that they know how to govern. If again they run up the national debt, currently at 45% of GDP, of which only 7% is in foreign currency, Argentines will remember the 2001-2003 debacle. At the time the default and depression resulted from the debt ran up by politicians and economists praised by Washington and financial circles in the nineties. The debt, then 141% of GDP, caused the default. It could be neither serviced nor paid.

Joseph Stiglitz persuasively argues that, if debt is acquired to improve infrastructure and make exports competitive, it is not a bad thing. The trouble is that Argentina, since the 1820’s, has a nasty penchant for relying on the debt to cover ordinary state expenditure, with only occasional attention to infrastructure. It is now for Cambiemos to show it does not follow the same road to failure, pursued by previous right-wing governments.

The Argentine portfolio held abroad amounts to a humongous U$S 440 billion, 81% of GDP. It is high time Argentina came up with financial instruments designed to provide a higher return than the dollar. Brazil has long been doing this. Argentina used this approach after 2003, but later dropped them and only partly reinstated them in the run up to the election. After all, the dollar also fluctuates. Who can tell what will its standing be with eternal deficits, coupled with never ending wars against Islamic enemies, a strategy that, along with US pro-Israeli policy, acts as a recruiting sergeant of outraged Islamic extremists?

Cristina Kirchner’s errors

As to the causes of Macri’s victory, in a country where Peronists are used to winning elections –the only exception was in 1983, when the Radical party under Raúl Alfonsín–, the best summary is that the Kirchner three 4-year periods in office were, on the whole, praiseworthy in terms of economic growth, low unemployment, paying off the debt and lowering of the level of poverty. However, the list of errors makes sorry reading:

On the first place, the most promising political reform, forcing all parties to hold primaries was spoilt by Mrs Kirchner wading in, imposing the election of Daniel Scioli, the lacklustre governor of Buenos Aires, despite too many Peronists doubting his credentials. Secondly, Mrs Kirchner’s constant speechifying tired the middle class. And finally, an array of economic policy mistakes that include exchange controls unworkable with 21 Century IT technology; scandalously high subsidies on electricity and gas for the well off; dropping the policy of twin surpluses in state expenditure (4% of GDP between 2003 and 2007) and trade, some U$S 10 to 15 billion pa. (currently the deficit is 7% of GDP, and exports have plunged due to exchange rate controls); and finally ignoring that the un-integrated nature of Argentine industry (requiring hefty imports) something that was known since the 1970’s. This feature meant that, when domestic economic activity expanded, it resulted in foreign exchange scarcities.

These mistakes caused the electorate to cease to support the kirchenist project. It has made it crystal clear that praiseworthy policies, if not backed by economic hard-headedness, become all too fragile.


The Cristinista version of kirchenism has served those on low incomes patchily. Néstor Kirchner (2002-2007) always made sure resources were not undermined. His economics ensured that GDP growth averaged 8% pa. Mrs Kirchner has also served the independent trading and foreign policy of her husband badly. Nestor Kirchner’s version of kirchenismo was financially viable. Even taking into account counter-cyclical policies to combat the post 2008 international slump, Nestor Kirchner’s policies were steadily and inexplicably dropped. This trend became more marked as from 2007. By 2011, having won a second term with 54% of the vote, 17% points ahead of the runner up, Cristina Kirchner thought she could walk on water and harboured no criticism.

Financial errors

Dealing with the sabotage engineered by the vulture funds that, for a few dimes, bought 7% of the total of the bonds held by foreigners became more complicated by the parochialism of the kirchenist advisors. They fell into the trap and went along with the jurisdiction of US courts, a toxic policy introduced during the 1976-1983 military dictatorship. European courts would have been acceptable, but the Kirchners failed to push for this.

In 2014 the vulture funds got Judge Griesa, a New York circuit judge, to grant them more favourable treatment than the terms secured by the 93% that accepted the two-tranche renegotiation in 2005 and 2010, embargoing Argentine payments to the creditors that had accepted the renegotiation. One of the financial centres offering better terms is the City of London and yet, as long as the South Atlantic dispute remains unresolved, Argentina has sought, except during the vilified nineties, to avoid financial dealings with the UK.

Macri’s likely foreign policy priorities

David Cameron, in the UK Defence review, and contrary to long standing expectation, decided to purchase aircrafts to arm the two new aircraft carriers under construction. Therefore, the window of opportunity to negotiate with the UK will soon be slammed shut again. Argentina wallows in a legalistic and declarative policy on the South Atlantic, ill-designed to profit from the crucial point made by Lord Shackleton that the Falkland Islands were neither economically nor demographically feasible, unless they integrated with Argentina.

Other foreign policy actions of president Macri are likely to include the absolute priority of relations with Brazil. Also Mercosur, which was developed strongly under President Carlos S. Menem (1989-1999) a well known right-wing Peronist. Also distancing Argentina from a misguided and increasingly erratic Venezuela is not a danger is an urgent requirement. And then the development of closer financial and political relations with China and Russia will be halted, with the emphasis on trade allowed to predominate, even though little can be expected from the USA and Europe other a regeneration of debatable conditionality and fresh attempts to submit Argentina to their priorities.

The formidable constellation of problematic issues is further complicated. It appears that the most recalcitrant right-wingers will seek to halt the 700 trials for human rights abuses during the 1976-1983 dictatorship. It is only partly promising that, in his first press conference on 23rd November, Macri gave his word that the courts would be allowed to proceed. However, the human rights movement concludes that a Macri administration will cease to encourage the trials. Macri holds that human rights are a money-making wheeze, dismissing it as “un curro” (too much work).


Lastly, judicial reform initiated by the Kirchners has been halted by the courts protecting their privileges, showing an unconstitutional tendency to actively make the law, muscling in to annul laws passed by Congress and the president.

As Christmas is upon us, the shopping list that Argentines might pen would include an overdue democratization of the governance and trade unions, and the manner in which strikes are called.

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26 noviembre, 2015

Temo los hoy opositores se equivocan, cuando no asisten a la Cámara de Diputados a las sesiones extraordinarias convocadas por la Presidenta Cristina F. de Kirchner, porque es constitucional convocarlas, cuando el Ejecutivo considera son necesarias, y en este caso durarán hasta el 9 de diciembre, ultimo día con Cristina Presidenta.
Por la experiencia de la actuación de Cristina, ella quiere gobernar hasta el ultimo segundo que pueda. Y aprovechar la mayoría que tiene en ambas cámaras para que se aprueben leyes que convienen a distintos sectores.
Ergo, no asistir a las sesiones, es una traición de los diputados ausentes a quienes los votaron, porque deben estar presentes – para eso el pueblo les pagamos – y oponerse e incluso denunciar penalmente a la mayoría, en caso de que aprueben leyes bandidescas, tipo nombrar embajadores o empleados públicos sabiendo que la próxima Administración Macri deberá cesantearlos y denunciar el hecho, para que la Justicia intervenga. Y también los fiscales. Y los que no lo hagan serán co responsables por encubrimiento y omisión de denunciar hechos delictivos, incluso cometidos en y desde los cargos públicos de diputados y senadores o Presidente de la Republica.

Es preciso aprovechar a la Justicia para que se decida sobre si los diputados han actuado ostensiblemente mal, porque en tal caso se puede producir el delito de “asociación ilícita” ya que hay mas de 3 personas involucradas para aprobar una ley delictiva en su forma y esencia. Tipo nombrar gente innecesaria, a días de terminar la Presidencia K. Agrego que como las leyes que sean aprobadas necesitan el OK de la Presidenta, porque ella opta entre promulgarlas o vetarlas, aquellas promulgadas necesitar+an la conformidad de Cristina o en su ausencia del vicepresidente o quien lo reemplace. Y la persona que lo haga será solidariamente responsable, en caso de tratarse de leyes que perjudican las finanzas publicas o causan gastos fuera de lo normal.

Entre los proyectos a tratar de urgencia esta la nueva Ley de Arancel para abogados, diseñada a pedido del Colegio Publico de Abogados de CABA, que es un cambio sensato y actualizado, y creo cuenta con aprobación del Senado. No estar presente para tratar esta ley es una falta de respeto y un daño inútil de los diputados opositores, que demostraría falta de respeto por nosotros los abogados que contribuimos para intentar que la Justicia mejore y existan funcionarios judiciales bien remunerados en vez de jueces bandidos innombrables, que benefician a los delincuentes, incluyendo gobernantes que deben ser juzgados porque parecen haber delinquido demasiado al amparo de la impunidad, que según el electo Presidente Macri terminará en Argentina.

Así como Cristina Presidenta debería trabajar hasta ultimo minuto – no lo hizo en el caso de mostrar información a Macri – los diputados y senadores deben también estar presentes, para eso cobran sus dietas. Si legislan en forma delictiva, aprobado leyes que intentan robar dinero al Estado, deberán responder de sus actos. Y ya hay muchas leyes sospechosas, por eso Macri quiere que Gils Carbó y Vanoli abandonen puestos que prima facie ejercen contra la ley y el sentido común en ciertos casos, y serán motivo de remoción. Ojo, si el delito a cometer es grave, la Justicia puede impedirlo en forma preventiva, desplazando o suspendiendo a los funcionarios sospechosos antes que el daño se consume.
Hay un triste antecedente, creo recordar: cuando Frondizi asumió la Presidencia, su Presidente del Banco Central se dice en 1959 hizo girar a una cuenta bancaria personal o de un complice, a la República Oriental del Uruguay una cantidad enorme de dinero. Y ese día viajó a Montevideo y allí se radicó creo para siempre, aprovechando que no había tratado de extradición. Por eso, la idea novedosa de declarar interdictos los bienes de grandes bandidos del Estado ya tiene precedentes importantes: se lo hizo cuando se produjo la revolución que expulsó a Peron en 1955, y nos enteramos a lo largo de investigaciones, que era muchísimo dinero, incluyendo bienes muebles inmuebles y una estancia. Todo esto no era constitucional al cien por ciento, es decir, violaba el texto de la Constitución.
Empero, años después ganó Cámpora la presidencia – estaba proscrito el General Perón – y su gobierno le restituyó el valor de todo lo que le habían incautado los militares, no sabemos a cuanto ascendió la suma, pero lo cierto es que Perón cobró, incluyendo sus años de General en el exilio, que al no haberse pagado, también le restituyeron.

Why Macri Won—And What It Means for the Region

26 noviembre, 2015

Hoy a las 10:49 A.M.

Moi et les trois chats joyeux =*>:) devil= =*>:) devil= =*>:) devil=

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Subject: Argentina’s Surprise

November 24, 2015ArgentinaCampaigns & Elections
Argentina’s Surprise
Why Macri Won—And What It Means for the Region
By Juan de Onis
This weekend’s vanquishing of incumbent Argentinian President Cristina Fernández de Kirchner sent a powerful signal of change to governments across the region, where populism and statist interventions have produced a decade of economic failure.
Mauricio Macri, the mayor of Buenos Aires, was able to triumph over Kirchner because even as her government claimed to be socially progressive, providing public subsidies for poor families and lowering consumer prices, it had brought Argentina to an economic standstill. Without adequate revenue to finance public investment, Kirchner’s economic model plunged Argentina into deep public debt, and the economy stopped growing. As the central government ran out of money, it defaulted on foreign obligations and printed more money, causing inflation to rise more than 25 percent annually. Not surprisingly, the policies—and mounting evidence of public corruption—generated broad resistance. Not helping were the Kirchner administration’s fights with foreign creditors, attempts to submit the independent judiciary to political demands, and alienation of labor unions, once a Peronist stronghold. Kirchner, once a popular political leader as the widow of former President Nestor Kirchner, lost her appeal in 2013, when a plebiscite defeated her bid for a constitutional reform that would have allowed her to run for a third term.
Macri promised change. He defeated Daniel Scioli, the governor of Buenos Aires province and Kirchner’s anointed successor, whose campaign was based on painting Macri as a reactionary who would deprive the poor of social benefits. That campaign backfired badly. Macri, a popular official who had created a new party, Republican Proposal, offered a modern alternative to the outworn rivalry between Peronists on the left and the Radical Party on the right. A skilled public administrator, he eventually won the backing of Radical Party centrists and dissident Peronists, such as Sergio Massa, a popular mayor who led the charge against a possible Kirchner third term. Macri campaigned for negotiation between all democratic political sectors and labor unions as a way to recover national unity and restore economic growth. And he noted his desire to bring in more foreign investment in Argentina’s energy sector, which Kirchner had limited by nationalizing Argentina’s main oil company. Macri’s victory signals that younger Argentinians are ready for centrism and pragmatism, after years of polarization.
Argentina’s ruling party presidential candidate Daniel Scioli arrives at the campaign headquarters to acknowledge his defeat, November 22, 2015.
Argentina’s ruling party presidential candidate Daniel Scioli arrives at the campaign headquarters to acknowledge his defeat, November 22, 2015.
As Argentina goes, so might go the region. For example, in the 1940s, after an early surge to the front ranks of world exporters, the wealthy Argentine economy became bogged down by policies that held back investment and squandered the country’s potential. Argentina soon saw the advent of populist politics, headed by President Juan Domingo Perón—an admirer of Mussolini—who created, with his wife Evita, the Justicialist political party, better known as Peronism, based on powerful labor unions and mass mobilizations of the poor. Ever since, leftist political movements in South America have imitated the Peronist formula of mobilizing political support by spreading out generous public subsidies while blaming the wealthy social elites for “injustices” in income distribution.
In Argentina and other countries that have followed the populist playbook, voters are starting to reject this model. Populism has created some major economic calamities in some of the region’s biggest countries, such as Argentina, Brazil, and Venezuela, leaving Latin America as an also-ran in the global economy. And voters know it. Over the next several months, many other publics will get a chance to vent their frustration at the polls.
Indeed, even before the Argentina vote, municipal elections in Bogotá saw Enrique Penalosa, an expert in urban transport, elected mayor over the candidate from a leftist coalition that had dominated Bogotá for 12 years. The issues were largely local, with crime, garbage collection, and bus services in the forefront, but Penalosa is also a strong supporter of the peace negotiations between President Enrique Santos of Colombiawith the left-wing FARC guerrillas, who have been pounded by military defeats and public rejection into accepting talks. Santos has set a deadline for a peace settlement in March 2016. If that happens, the radical left in Colombia will have to give up its hopes of taking power by force of arms or by a majority of voters, who are clearly fed up with leftist radicalism in any form.
Argentina’s President Cristina Fernandez de Kirchner votes at a polling station in Rio Gallegos, November 22, 2015.
Argentina’s President Cristina Fernandez de Kirchner votes at a polling station in Rio Gallegos, November 22, 2015.
The next blow could be national legislative elections in Venezuela on December 6, in which the opposition parties hope to defeat the authoritarian populist government in a national legislative election. With handouts of cheap Venezuelan oil to Cuba and other Caribbean neighbors, former Venezuelan leader Hugo Chavez built up his country as a cornerstone of leftist politics in the region. His death coincided with a deep decline in Venezuela’s oil production, and the subsequent economic downturn brought chronic shortages in basic consumer goods, roaring inflation, and capital flight. Opinion polls show that the centrist opposition could capitalize on the public discontent and win control of the national legislature. PresidentNicolás Maduro, Chavez’s successor, has imprisoned leading opposition figures and has threatened to use military and militia force as necessary. He should be taken at his word, but he will face a severe backlash in Latin America if he tries to block by force a democratic protest vote against the government.
After the election in Venezuela, Peru will hold presidential elections in April 2016. Several candidates with strong democratic credentials are campaigning to succeed President Ollanta Humala. The outcome is uncertain, but Peru seems safe from political extremism. And sometime in 2016, Brazil and Chile will also hold major municipal elections that will set the stage for presidential elections in 2018. In both countries, the oppositions are mounting coalitions in the hopes of unseating the ruling governments, led by Dilma Rousseff in Brazil and Michelle Bachelet in Chile, who are both considered polarizing leftists. Brazil is suffering the worst economic recession in its modern history and Rousseff’s popularity has plunged to lower than ten percent. Bachelet’s governing coalition has already started to splinter over educational reform that increases state control of universities and tax reform that has contributed to an economic slowdown.
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In short, politically speaking, Latin America might look very different in 2016 than it does in 2015. That doesn’t necessarily mean smooth sailing ahead. The region’s governments have to find a way to create inclusive growth, a formula that has eluded most countries around the world. And they have to do it under rather dire circumstances. In Argentina, the Kirchner era has left the country with massive public debt that will come due during Macri’s four-year presidential term. The government needs short-term international financing of at least $20 billion to reach a settlement with creditors and to avoid a devaluation and deeper inflation.
Latin America needs economic policies that facilitate private enterprise, the main source of productive employment, and that raise productivity in overprotected industrial sectors. In Argentina, Macri can make the right policy calls if he can get support from Argentina’s powerful labor unions and win the necessary votes in Congress. That is the kind of cooperation Macri has been preaching, but it won’t be easy. Dante Caputo, a political analyst who was foreign minister under Argentine President Raúl Alfonsín, recalls how the Radical government failed to stabilize the economy and wound up with inflation running at over 300 percent a year. Alfonsín, a champion of human rights, lost power to the Peronists in 1989. For Macri to change Argentina, Caputo told me, he would have to succeed in stabilizing the economy without the austerity policies that would alienate wage earners. “Any attempt to stabilize the economy that concentrates the costs on the social majority would be political suicide,” Caputo said. “If Macri succeeds in resolving the tensions between austerity and equity he will win a decisive battle. It will not be easy.”
For Latin America as a whole, the hour of change in Argentina and elsewhere is an opportunity to recover the momentum it has lost to Asia in the global economy. If the region, with a population of 600 million and abundant natural resources, can come out of its protectionist shell, it can make a major contribution to the recovery of sustainable growth, not only in its region but in the world. Latin American leadership on global issues, such as the environment and social equity, will also be possible if the potential of the Western Hemisphere is fully realized.

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