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ARGENTINA | 13-04-2024 05:47

Guillermo Dietrich: ‘Milei winning was for the best ... we could never have made such disruptive changes’

Former transport minister and close ally of Mauricio Macri on the Milei government, state companies and Juntos por el Cambio.

Tipped to be the Cabinet chief representing Mauricio Macri in an imaginary PRO-La Libertad Avanza government that never materialised, Guillermo Dietrich is a former Transport minister who first pioneered Metrobus at City level and then fostered a low-cost aviation market at national level. One of the most influential leaders from Macri’s PRO, the 55-year-old is today entrusted with picking and training new territorial leaders for the party. 

In this extensive interview, he analyses the Javier Milei government’s chances of success, backs its austerity measures and affirms that the President is the only person capable of pushing through the reforms needed to take the country out of the “decadence” in which it finds itself, “freeing the forces of the private sector, which are the only ones capable of creating wealth.”

 

In February you published in your social media accounts: “Over eight years after the start of our government, I think it is interesting to place in perspective the change of era now being celebrated. We, in 2015-2019, suffered every kind of attack for proposing those changes.” Tell us where you see the Mauricio Macri and Javier Milei governments as being similar.

Four years ago in our last interview [in Perfil], and given what has happened since in Argentina, I think that if we had bet on what was going to happen in four years’ time, there would have been no chance of getting it right had we forecast, for example, that Milei would be president. 

Where are the coincidences? I think we are experiencing a very deep change in Argentina, which is coming from the people. The outlook of political analysts often stems more from the supply side than from the true protagonists but in my multiple trips around the country, I’m seeing a bit more profoundly the demand side, i.e. the people. I have always liked to tour Argentina but I see 2014-2015 as the first very important milestone, the victory of Mauricio Macri. Mauricio’s government with its high points and its low points, that 41 percent [vote in 2019, actually 40.28 percent], the profound sentiment and vocation for change in the 2021 midterms won by Juntos por el Cambio, repeating that 41 percent and afterwards the explosive eruption of Milei. And I believe that behind that vision of a need and request for change on the part of the people, there is a profound fatigue with the way politics is done in Argentina, which perhaps finally became visible in the pandemic, when people perceive that the state which looks after me is already overwhelming and limiting me and where political impunity is flaunted with the VIP vaccines and the Olivos [birthday party]. We were often surprised and said to ourselves: how can it be that corruption does not have a stronger impact on people? But corruption is something very intangible where people do not necessarily see any direct correlation with higher taxes or less services as a result of corruption. The Olivos party or VIP vaccines were [cases where people could say]: “I’m locked down while you the politician can party. I have no access to vaccines whereas you politicians do.” So our situation today has its beginnings in Mauricio Macri’s government and Milei today is possible because of those changes in society and because of those four years of Mauricio. 

 

Concretely Mauricio Macri has said recently that his government was the prologue of La Libertad Avanza. Do you see that continuity?

One hundred percent because while this government has followed those ideas much more deeply – that agenda of balanced budgets, austerity, husbanding state funds, administering public companies well, creating the conditions for companies to develop, cutting taxes – all that began during that process in a society where very few were listening to such things while that crisis we received was pretty asymptomatic. The situation from the standpoint of both public policy and society’s capacity to listen has changed greatly in the last eight years but I feel that there is continuity, speaking of the political and economic issues. Afterwards there are a whole bunch of other things where it remains to be seen if this government can take off but of the economic issues I have no doubt. And now I’ll tell you three things stemming from that which motivate me greatly, making me optimistic about Milei and the conviction which he carries in these three points will be for me the key for Argentina. One is the fiscal issue, which is obviously the other side of the coin to inflation. Secondly, the issue of corruption and thirdly, something not often mentioned but which I always transmitted when I was in the government of an Argentina in chains. This Argentina where anybody who invests, who wants to set up a newsstand, hire people, etc. has to run an obstacle race, everything from the paperwork to open the newsstand, restaurant etc. to the trustee of I don’t know what, the certification of I don’t know what, all the norms and laws concerned. And there I also see a profound vocation to transform by dismantling all that in order to liberate the forces of the private sector, which is the only one with the capacity to create wealth. 

 

What Kirchnerism “did was to destroy the value of [state] companies while throwing away any number of subsidies, huge sums of money which are the other side of the coin to the fiscal deficit, in turn leading to inflation.”

 

Speaking of the differences, you, for example, back in 2015 were among those opposing the privatisation of Aerolíneas [Argentinas]. Do you believe today that it should be privatised? 

I don’t know if I was against it, I said it was not necessarily the solution. Aerolíneas is a problem for Argentina. It came out recently in the newspapers that ever since there has been competition on the Buenos Aires-Montevideo route, Aerolíneas fares have come down 30 percent in price. To dramatise or exaggerate the question, Aerolíneas is a fraud which was sold to part of society, part of public opinion and part of the elite with this vision of the social role of Aerolíneas. All Aerolíneas ever did was to limit competition with their trade unions trying their best to kill off any competition showing up. LATAM [airlines] was an example, they fought it constantly until they succeeded in chucking it out of Argentina. It was the first company to leave [the country] under the previous Alberto Fernández government. So they killed off the competition before saying: ‘We’re all there is, so if not us, the country has no connectivity so you need to subsidise us as the only means of connectivity.’ Which is ridiculous because no money is lost since what is earned from tourism compensates for the subsidy placed by the state. Nowhere[else] in the world is state money placed into airlines, which generate tourism worldwide. 

As I have always said, you need to resolve at root the problem of Aerolíneas, which is basically that it not receive any state subsidies, which is an aberration and an advantage over the competition with the previous Alberto Fernández government again tilting any level playing-field against the low cost airlines. For example, why didn’t that flight to Montevideo exist? Because Aerolíneas under La Cámpora who ran the aviation sector in the Alberto Fernández government did not permit the low-cost airlines to fly out of Aeroparque [airport] to Montevideo. They could do so out of Ezeiza [International Airport] but nobody is going to go all the way to Ezeiza to take a 35-minute flight to Montevideo so FlyBondi or JetSmart could not compete. Now that an Aeroparque departure is authorised by the change of government, JetSmart has started to fly and prices have come down. More Uruguayans will be buying tickets and making tourism trips to Argentina, while Argentines going there do business and all of that generates development. 

I had to administer several public companies, eight I believe, Belgrano Cargas, the trains, Aerolíneas, Inter Cargo, Eana, etc. etc. The state has no business running those companies. What happens is the destruction of value with the Kirchnerite style of state company management. I’ll give you one example: Belgrano Cargas, the state train company, must be the only freight company in the world which loses money. It was private, handling six million tons with 3,300 employees. It was nationalised, passing from six to 2.5 million tons, or down to little over a third, while the number of employees rose from 3,300 to 4,800, i.e., up by almost 50 percent. We then took over, bringing the 2.5 million tons back to six million while lowering the payroll from 4,800 to 3,900. Kircherism made its comeback, restoring the employees to 4,800 again. So what they did was to destroy the value of those companies while throwing away any number of subsidies, huge sums of money which are the other side of the coin to the fiscal deficit, in turn leading to inflation. My outlook was always that, to restore balance and privatise afterwards. 

 

What do you think, for example, of [Security Minister] Patricia Bullrich’s proposal of a direct merger of PRO and La Libertad Avanza? Should the two amalgamate or each maintain its identity?

Argentina is at a turning-point where we have the very definite possibility of emerging from that trap of economic decadence from whence we came although that exit, unfortunately, will imply an enormous effort on the part of society in its entirety, the people, businesses, governments at every level [municipal, provincial and national], state employees, public companies, etc. I’d say that nobody can be spared this because the reality is that when violent austerity [if I should call it that] becomes inevitable, it also ends up being unfair if it does not impact everybody. Faced with that situation, I find any fine-tuning along party lines as what might be better for one or the other to be inconvenient and untimely. Firstly, because no decision needs to be taken today and secondly, because we all genuinely believe that Argentina needs a profound change which we should back independently from wherever we are – not out of any partisan speculation but as a question of conviction. 

I’m backing this government all I can so that it does well. I’m not speculating that it might go well if we did some things together or if we did one thing or another. And this also seems to form part of understanding what society is undergoing without thinking whether PRO and La Libertad Avanza should team up or not and whether the Radicals should do this, that or the other. It’s about thinking of   “how do I hang on?” because if most people tough it out and this works out OK, they will be able to have a future which today they feel to be lost. 

 

Does it seem right to you that important posts like the Security or Economy Ministries should be held by those who occupied the same posts in the Macri government? 

Yes, those are personal decisions. I put an asterisk in the cases of [Economy Minister Luis] Caputo, [Central Bank Governor Santiago] Santi Bausili and [Treasury Secretary] Pablo Quirno, who are three very relevant persons in this government with a highly active participation in ours, we worked a lot together and I take off my hat to them for having to grab this hot potato. If it turns out well, they are heroes, if badly, hang on. 

The boat has been stabilised today but last December we did not know if we were heading towards hyperinflation with a dollar of 2,000, 3,000 or 4,000 pesos, which is why I believe that there is a [high] level of commitment and patriotism. Each of them would have their personal reasons and motivations but in these cases they would be committing their families as well as themselves. And knowing them as I do, I really highlight that profoundly because I know they do it out of a genuine vocation to contribute and resolve [problems]. 

 

There are some differences between the vision of Mauricio Macri, who chaired PRO until he became President, and Patricia Bullrich. Are you closer to Macri’s vision than to Bullrich’s? 

I don’t know what those two visions are. But yes, I feel especially close to Mauricio as a person. Because with Mauricio, with [former Cabinet chief] Marcos Peña, [former Cabinet deputy chief] Gustavo Lopetegui, [former Economy minister Nicolás] Nico Dujovne and I don’t want to go on counting, I feel as if we went to war together.

 

A brotherhood.

Yes, that sort of feeling.

“We can only change by brutally restructuring a state addicted to spending with some brutal austerity.”

Juntos por el Cambio, ex-Cambiemos, has ceased to exist. Do you think that coalition should be reconstructed around PRO with some like-minded Radicals, excluding the most distanced and Coalición Cívica while adding La Libertad Avanza as a tactical or strategic ally, I don’t know which?

Most of us in Juntos por el Cambio voted the same over the DNU emergency mega-decree. Juntos por el Cambio has held together in many provinces and city halls. So again there are party questions which are increasingly less important. Indeed Milei is an example – with no party or structure he pulled off 56 percent of the vote, nobody ever won so much.

 

A bit over a year ago, in late 2022, you were in a programme called Animales Sueltos where you said: “I’m committed to Juntos por el Cambio becoming government again.” Today Juntos por el Cambio has practically ceased to exist so how, for example, should the 10 governors, the deputies and senators be coordinated without a Juntos por el Cambio executive board?

At that time I believed that the best option for Argentina was Juntos por el Cambio whether Horacio [Rodríguez Larreta] or Patricia [Bullrich]. But to be totally sincere today, seeing the disaster we have reached and the prejudices which a certain part of society and the establishment have about us, I believe that Milei winning was for the best although we will never know. I find it hard to believe that we could have pushed through such a disruptive change. 

 

You are saying: “Today I’m thinking just as well La Libertad Avanza won,” although you weren’t saying that just over a year ago. Do you think that Macri had the same opinion back then as you do now, that he saw it coming before you did?

No, Mauricio was 100 percent committed to Juntos por el Cambio winning and once Patricia won the primary, to Patricia winning. We have just marked the anniversary of a situation which – although I have never said so in public – was very painful for me, namely the rift between Horacio and Mauricio when Horacio separated the [national and municipal] elections around Easter last year. I’ve always had a great relationship with both and I’m very grateful to both. I worked almost seven years together with Horacio in the City and obviously with Mauricio too

 

Almost two years ago, shortly after Milei won 15 percent in this city [in the 2021 midterms]. Macri had the vision of being the best bridge between Milei and PRO.

I did not form part of those conversations so I do not know the details. Indeed there was a meeting in which it was explicitly stated that Milei should not form part. That communiqué reflects why we lost last year, it was a disaster from every viewpoint. But the conviction of Mauricio, and I would testify 100 percent to that, is that he wanted Patricia to win. And the day Patricia lost against Milei and [Sergio] Massa, he was one of the people most affected by that beyond any doubt – I was with him that night. But once he had got over the blow of losing, firstly somebody from La Libertad Avanza and then Mauricio himself, with a day of difference, rang me up the following week to ask me to take charge of the scrutineering, with Mauricio telling me: ‘It’s very important that Milei win in Argentina and you’re a person who knows how to do it well.’ In fact I undertook that responsibility, not because I was seeking publicity or visibility since I thought that inconvenient, but because I wanted to contribute. My team looked after the scrutineering but from that you can see Mauricio’s commitment to producing that transformation headed by Milei without asking for anything in return and on that basis the run-off against Massa was won.

 

A trend of 300 percent inflation has been projected. While the demand for electricity has only fallen nine points in March from February, consumption fell 28 percent year-on-year in February, construction 11 percent and the metal industry 14 percent. Aren’t you afraid that slumps of this level in activity might end up causing correct ideas to fail by applying an overdose?

There’s a lot of talk about that. In my view Argentina is a sick addict of public spending. I spent four years going to Congress. Most Argentine politicians, as I said in a tweet, do not understand the concept of scarcity. I’m an economist, not a professional economist, but what you learn as an economist and a businessman is that resources and funds are scarce. You cannot build a 25-storey tower just like that... 

 

You can if you want but what you cannot avoid are the consequences.

Yes but Kirchnerism lasted like that for 12 years and then returned to power making promises they could not keep. 

 

Don’t you think they lasted 12 years and then could return because the others got it wrong?

No. We surely did get some things wrong but the reality is that when you have to resolve these structural problems and when resources are scarce, that is inevitably painful. And then somebody comes along four years later and says: “I promise to fill your refrigerator,’ as Alberto Fernández did, “I promise to pay the money of the Leliq bonds to pensions,” and at that point the people believed him by the small margin of 48-41 percent. Now they do not believe him any more and now, since they were deceived more than once, they are saying: ‘We’re going to put up with this leader.’ Why? Because he’s their bet on being able to make a definite escape. 

Whether we are going to escape for good or not, I do not know, but I believe that there are greater probabilities of yes than no but no chance of a definite escape without the current indicators. And since the Argentine state is addicted to public spending, if you ask me: ‘Which do you prefer, to reduce spending or to come up short?’, I prefer to cut. And if cuts are made, we should not be surprised if in a few months we start to have lower taxes and if we do start to reduce taxes, we should not be surprised if we enter into some very positive dynamics. By lowering taxes, I would imagine export duties and taking IVA value-added tax from 21 to 19 percent when in Argentina IVA always moved up, from 11 to 13 percent, I believe, and then to 17 percent and then from 19 to 21 percent. We have to change these dynamics but we can only change by brutally restructuring that state addicted to spending with some brutal austerity. 

 

Was the gradualism of 2016 an error?

No, because society was differently prepared for the process of change which needed to be done, mainly because the crisis was asymptomatic. Then you talked of going urgently to the doctor tomorrow because you are very ill and then you see you have lost weight and are sleeping OK... If you are suddenly out of breath climbing two flights of stairs and cannot sleep at night with a whole bunch of symptoms, it is more than probable that you would go to the doctor. In 2023 society felt that we had to go to the doctor, in 2015 not. That’s why I believe that what we did in 2015 was very valiant because we approached a profound change with that gradualism, which I believe had to be done and which I continue to believe to be correct, which permitted many things to be improved and which permitted society to see different things from low-cost airlines to a different style of governance and even that highway which had been promised but not built. And which permitted a non-Peronist government to complete its term for the first time so that the Peronists stop branding themselves as the only people who can govern. 

What has to be done in Argentina is inevitable so that Alberto Fernández, who threw overboard everything we’d done, through the economic destruction of our country with his fiscal populism ended up showing us as a society that something needed to be done here in depth, seriously and fast. 

 

Synthesis and corollary. What you are saying is that the government of Mauricio Macri was the prologue of this one, that the gradualism of 2015-2016 was necessary to demonstrate that an end could be found and that it was the seed permitting the advent of the La Libertad Avanza government four years later. 

One hundred percent, thank you for summing it up so well. But that was not the only way of scoring, the ball hit the goalpost and rebounded when it could have hit the post and gone in. If some factors in 2018 and 2019 had been more helpful, the ball would have hit the post and gone in.

 

That’s politics, Massa was also three points away from becoming president but could not enter now. 

That’s so but in reality... 

 

In a word you are saying that this government is possible because Mauricio Macri’s government existed. Is this Macri’s second half? 

No. It is healthy for this not to be Mauricio’s second half.

 

My reference is in a symbolic sense.

I know, but it seems to me better to represent it as the prologue than as that figurative second half.

 

Production: Melody Acosta Rizza y Sol Bacigalupo

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Jorge Fontevecchia

Jorge Fontevecchia

Cofundador de Editorial Perfil - CEO de Perfil Network.

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