Tuesday, February 27, 2024

ECONOMY | 02-07-2022 22:48

Martín Guzmán: the debt negotiator who fell with Argentina's economy

A leading disciple of Nobel Prize-winning economics laureate Joseph Stiglitz, 39-year-old Martín Guzmán lacked experience in government when he joined President Alberto Fernández's Cabinet in December 2019.

With a brilliant academic career behind him, Martín Guzmán led Argentina's debt renegotiation with foreign creditors and the International Monetary Fund as economy minister. He prevented the country from defaulting, but he fell with the economy, consumed by a vortex of inflation and friendly fire from his own coalition allies.

A leading disciple of Nobel Prize-winning economics laureate Joseph Stiglitz, the 39-year-old lacked experience in government management and had no history of political militancy when he took office in December 2019, joining President Alberto Fernández's Cabinet.

Two-and-a-half years on, after having restructured US$66 billion with international bondholders and another US$44.5 billion with the International Monetary Fund, Guzman has resigned his post, beset by friendly fire and with Argentina in the midst of another inflationary crisis that has pushed the prices up by 60 percent over the last 12 months – one of the highest rates in the world.

In his resignation letter, Guzmán highlighted the unforeseen difficulties the government has faced almost from the outset – the Covid-19 pandemic and the effects of the war in Ukraine – but said he and the president had taken "steps to ensure that the economy (...) recovers and grows."

Guzmán, the eldest of five brothers, studied economics at the University of La Plata and then at Brown University in the United States. He later joined Stiglitz's research team at Columbia University in New York.

His speciality is sovereign debt and he was an able interlocutor with the International Monetary Fund. It is still uncertain how markets will react to his departure from government, but most expect a rough few days ahead.

"For the IMF, Guzmán was the lesser evil. But he sinned of arrogance over time. Argentina's situation is not only explained by political reasons, it is clear that there were also economic shortcomings," analyst Carlos Fara told the AFP news agency.

A soft-spoken and friendly character, Guzmán gradually fell out of favour within the government. Since the end of 2021, he has faced open rejection from Vice-President Cristina Fernández de Kirchner, who is opposed to the fiscal adjustment required by the country's new agreement with the IMF.

The son of a mathematics teacher and a tennis instructor, Guzmán decided to study economics in the wake of the 2001 economic crisis, when the country defaulted on its debt.

"The reality that Argentina was going through in my particular case led me to dedicate myself to economics," he told AFP a few months ago, in order to understand "why something like this is happening and how to solve it."

He no longer has the chance to do that – and now the mantle will be passed to another.



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