Argentine President-elect names Columbia academic Martin Guzman to Economy Ministry
Argentine President-elect Alberto Fernández, who takes office on December 10, presents his future cabinet in a Buenos Aires press conference today.
The key post of Economy Minister, will reportedly be held by Columbia University Associate Professor Martín Guzmán, a close colleague of Nobel Laureate Joseph Stiglitz - whose Columbia office is next door to his.
The Argentine-born Guzmán, 37, a debt specialist at Columbia with a doctorate from Brown University, will bring a sharp academic intellect but little policy-making experience to the task of reviving Latin America’s third largest economy and fending off default.
He will need all his training as Argentina braces for fraught negotiations with creditors to restructure around $100 billion in sovereign debt while steering the recession-hit country back to growth and taming inflation.
Twin crises
Fernández and Guzmán are expected to enact expansionist policies, including higher business and family subsidies, increased public works and social spending, and sharply lower central bank interest rates (currently 63%).
They face twin economic and debt crises, including a $45 billion IMF debt - plus another $160 billion in other public foreign debt, most of which is due within the next four years.
The new administration also inherits an economy reeling from the April 2018 collapse of a carry-trade debt bubble known locally as the "financial bicycle" - a centerpiece of economic policy under outgoing President Mauricio Macri.
The 'bicycle' collapse forced the right-wing Macri to turn to the IMF for an unprecedented $57 billion bailout; but of the $45 billion borrowed, an estimated $36 billion were ultimately used to finance capital flight.
Despite record harvests GDP has fallen 7.4% since the crisis began, with the peso losing 68% of its value and real wages falling 19% as inflation more than doubled to over 50%.
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Argentina's Economy Minister-designate Martín Guzmán.
The Columbia University academic and close colleague of Nobel Laureate Joseph Stiglitz inherits a "Macrisis" - twin economic and debt crises left from the financial deregulation and austerity policies that marked the four-year Mauricio Macri administration.
