January 18, 2018

Multiple exchange rates could be in the cards

Tuesday, November 19, 2013

Kicillof is officially the country’s economic leader

Forty-two-year old Axel Kicillof came out on top in the reported struggle between the government’s quarrelsome leading economic quintet, replacing Hernán Lorenzino as Economy Minister.

Kicillof was already a strong voice in the economy team and was labelled the mastermind behind the expropriation of a majority stake in YPF from Spanish company Repsol in 2012. But he has now become the clear leader.

His rise to the helm of the economic team comes at a time when the infighting between the president’s key officials in the sector had become fodder for newspapers.

Kicillof has long been a proponent of multiple exchange rates to favour local industry while not hurting investment. That would mean, for example, that someone who wants to invest in Argentina could receive a different exchange rate than a soybean exporter. And foreign tourists could receive more pesos for their greenbacks to encourage visitors.

By officially naming him, President Cristina Fernández de Kirchner is redoubling her trust on a former university professor who had emerged as a powerful new voice in Fernández de Kirchner’s Cabinet after her landslide reelection in 2011. Kicillof, a member of the La Cámpora Kirchnerite youth grouping, was thus consolidated as decidedly inside the president’s small circle of trusted advisers.

From an academic background, Kicillof immediately became known for his hard left-wing stance, earning the nickname of “the Marxist.” He did not disappoint during the debate over YPF’s takeover, when Kicillof told Congress that only “morons” would think the state was stupid enough to play by Repsol’s rules and make an offer to buy 100 percent of its shares. He harshly criticized economic theories that “justify the looting of our resources and our companies.”

Although they have recently shown a united front, Kicillof does not have a good relationship with Domestic Trade Secretary and import czar Guillermo Moreno — their styles are very different. As a team, Kicillof always played the academic to Moreno’s acerbic ways. Although the latter’s proximity to the president has waned in recent months, any lingering clash of strong personalities will have been settled by the young economist’s promotion.

First steps in administration

An economy undergraduate and doctor, Kicillof taught diverse subjects at the Buenos Aires University (UBA) until he entered the Executive branch as deputy minister.

His first foray into business administration came in 2009, when he took a key position at flagship carrier Aerolíneas Argentinas, which the government expropriated from Spanish travel group Marsans.

Before his entry to the Executive, he rose to prominence when Fernández de Kirchner’s administration fought to appoint him as state representative on the board of directors at steelmaker Siderar, despite company resistance.

With that, local media at odds with the government crowned him as the new radical boogeyman, perhaps explaining the Marxist label.

First a Keynesian

The new economy minister defines himself as a Keynsian, and has been described by media outlets as a Marxist, but his only explicit connection with the ideology is having taught a Marxist Economy class at UBA.

Kicillof is an old-school ideologue who shuns the tenets of 21st Century globalism and believes Argentina must find its own way to economic development and industrial prominence, a characteristic harmonious with Peronism.

He criticized Marsans as “bent on lobotomizing Aerolíneas Argentinas.” “This is a transnational group that doesn’t think about the Argentine worker.”

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