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OPINION AND ANALYSIS | 03-09-2022 13:53

Massa: imagination in power

Trips and cuts: Argentina’s new Economy Minister sees his visit to the United States as a milestone of his stewardship.

Ever since being anointed as Argentina’s economy minister, Sergio Massa has seen his upcoming visit to the United States as a milestone determining whether he is in his dawn or his twilight. For anybody who talks to him, it is an invitation to dance, with drinks on the house. Since his arrival, a “reloaded” Massa busies himself every day – whether in Tigre, the Ministry’s headquarters or his downtown offices – with the itinerary beginning next Tuesday.

His project has already undergone changes – who knows whether from an excess of professionalism or a compulsion for improvisation? For example, Massa won’t be travelling to Qatar with the spontaneous fantasy of opening up some Aladdin’s box of Arabian riches in favour of Argentina. That world is not a casino. Nor will he be off to Paris, as was anticipated – the city of lights will be losing some of its glow from the crisis of the war in a Europe which still does not know how its future energy prices are going to be paid.

Instead, Massa is concentrating on just two points on the map: Washington and Houston. In the United States capital he will attempt to storm the Joe Biden administration and the International Monetary Fund (IMF). The trip to the oil centre was added to his itinerary only last week, as if it were the home of the three wise men ready to pour their gifts into the minister’s lap. All of which is basically a mirage, smoke and mirrors.

The Frente Renovador leader further desisted from another trip – one to Wall Street and New York. Perhaps he thinks that he has defused the financial problems in Argentina, the dramatic breach between the official and parallel exchange rates and the withheld loans, among other cataclysms? It seems strange that he should be skipping that point in the US geography where he is presumed to have sedulously fostered links with operators, banks and investment funds.

Also strange was the initial absence (already corrected) from the delegation of his deputy minister Gabriel Rubinstein, whose incorporation into the Ministry had been delayed by some inconvenient statements from the past. Still, he has a solid reputation as a macro-economist. That speciality does not abound in Massa’s entourage and Rubinstein stands to be a key interlocutor in the discussions with the technical helm of the IMF (whose delegate in Argentina had already started interviewing Massa in his first fortnight as minister).

Perhaps the external front is best left in the hands of Massa’s chief advisor Leonardo Madcur, a lawyer and a protegé of former economy minister Roberto Lavagna (2002-2005). Today Madcur is active in the Ministry while the veteran ex-official has returned as a ghost advisor to Massa, perhaps repeating the consultancy services which he rendered to another man at the helm, Martín Guzmán, that minister whom he seemed to admire and to whom he dedicated the flattering and unforgettable phrase: “Guzmán has the exact doses of orthodoxy and heterodoxy to govern the economy.” Either he got it wrong or there was an overdose somewhere.

It is perhaps within that heavyweight radius that the inclusion of Lavagna Jr. on the team heading out to the USA should be placed, a controversial issue because attempts have always been made to show the INDEC national statistics bureau as being autonomous from the Economy Ministry. But that incompatibility was resolved, they say, by a ukaz decreed by Massa, reserving for Marco a complementary responsibility for negotiating with international organisations. These institutes, the BID/IDB Inter-American Development Bank and the World Bank, will hopefully be offering prosperous news for boosting reserves.

 

Frustration

When he began as economy minister, Massa hoped to have his old acquaintance Daniel Marx to second him, a plus point due to the number of important people known to the ex-official. But incompatibilities with his clients put paid to Marx, who had been surreptitiously helping Guzmán and Batakis as if he were a medical consultant. 

With Kristalina Georgieva at the IMF meeting, Massa will insist on the loan from the Fund’s anti-crisis Resilience and Sustainability Trust being brought forward. It is clear that making the first IMF loan from that body to a country like the eternal big-time spender and leading debtor Argentina will be a hard sell. There are other nations on the list.

The political contacts with the Biden administration will be the turf of Ambassador to Washington Jorge Argüello and his close associate Gustavo Fernández Pandiani, in particular relations with Amos Hochstein, Biden’s  international policy aide connected to the Jewish lobby and dedicated to energy questions (although the Democrat assigned to that area is an environmentalist fanatic at odds with the oil companies).

It’s hard to know if that internal contradicción will affect the flight to Houston, an oil pilgrimage which seen from Buenos Aires seems earmarked for the businessman Marcelo Midlin (along with his economic blood donor Emmanuel Álvarez Agis) and also Marcos Bulgheroni, one of the few people sure to show up in the Texan city.

There are any number of Houston photos of Massa with the CEOs of the big four – Exxon, Total, Chevron and Shell. Furthermore, the negotiating partners will not need any special treatment. Chevron is already the biggest investor in Argentine history. Total and Shell are operating at almost full capacity while only Exxon is running behind. And if the country still cannot offer transportation for gas and oil, it is hard to appreciate the need for new investments.

Whether Enarsa state energy company head Agustín Gerez will form part of the delegation remained up in the air at the time this column was written. This would provide a facility for oil companies for leaving abroad some of the dollars which they are currently obliged to bring into the country and for whose return investment plans will be divulged in the future.

But Massa requires the dollars today – he has to pay the supermarket and he does not know if it will be alive and well in the long term. Up until now he has not succeeded in clinching any costly “repo” repurchase agreement to ease his woes although he said he had three clients lined up for such an operation. While he waits, he is moving in the correct direction to contain public spending with the latest budget cuts, which have been denied by both of the Fernández duo: Alberto and Cristina.

Massa could add that economic activity remains robust, the dollar has not soared into the stratosphere and that panic buying has been stopped while bonds and shares are moving up. A fable as his main selling-point – a precarious stability obtained in the first fortnight as minister. With this trip he is hoping to improve that perspective even more in a fortnight from now. There is no lack of imagination in his recipe, the only cheap thing on today’s market.

 

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Roberto García

Roberto García

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