November 21, 2014
Kicillof: ‘No serious economic problems here’
Economy Minister accuses economists, media of causing panic, being ‘clueless’ of prices
Economy Minister Axel Kicillof yesterday argued that Argentina does not have serious economic problems, but rather “complexities, difficulties and challenges,” and accused economists and dissident media outlets of orchestrating a campaign to generate an “end of the world” feeling among members of society.
“Talking about the economy in Argentina is no easy feat ... (and) speaking of problems is an exaggeration,” the minister said, dismissing “intense campaigns that crop up (suggesting) that things are going to get increasingly worse and that the economy is going to crash.”
In recent years, opposition sectors have pointed to persistently high inflation and dwindling Central Bank reserves as grave problems they perceive the government has been unable or unwilling to address, among other issues.
Nonetheless, opposition economists have recognized progress in the loosening of the dollar clamp, agreeing on the compensation for Spanish oil firm Repsol for the expropriation of YPF and the launching of a reformed, more reliable consumer price index as a way of helping to bring credibility to the economy as a whole.
But with reports circulating about inflation being even higher than January’s 3.7 percent, the minister seemingly felt his buttons had been pushed again.
For Kicillof, such sectors “have made us grow used to this (process) of generating a sensation of economic catastrophe.”
“When economists talk about the Rodrigazo and 2001, more than analyzing the current situation, I see them showing their own desire for this government to have problems,” he continued, adding “they forget that the government’s problems are not just the government’s” and that “currently there are no grave problems,” but a “need to move forward in certain situations.”
Huffing and puffing
Speaking to Nacional Rock radio and covering a wide range of topics, Kicillof moved on to specific targets.
“Former (Economy) minister (Roberto) Lavagna went around saying that inflation was at five percent, and (PRO economist Carlos) Melconián said four percent,” the official charged, adding: “it seems as if they’re throwing a sort of dice that gives results between one and six percent.”
Kicillof thus argued opposition economists “haven’t the slightest of clues about what happened with the movement of prices,” describing consultants’ estimates as far from rigorous when matched up with the “new CPI, which has a methodology according to the highest international standards.”
The minister added that “the IMF, among other foreign and national organizations, has participated in devising this index, (which) is very rigorous: the collection of data takes us all month, unlike these consultants that compete to see who can give the highest number.”
On the UIA meeting
Regarding the meeting between government ministers and representatives of the Argentine Industrial Union (UIA) chamber, presided over by the president, Cristina Fernández de Kirchner, Kicillof said that “it took us by surprise, it was very long, very cordial.”
“Unlike other meetings I have attended, there were no complaints nor demands. This is a powerful sector that represents some (important) companies,” the minister stated, specifying that the sit-down largely served to receive feedback from the institution headed by Héctor Méndez, as well as to set out “points of contact in both schedules.”
However, he added somewhat defiantly that what the Fernández de Kirchner administration “wants from the industrial sector is for them to set out what their own obligations and duties are on the table and invest, instead of speculating.”
“For industry to grow, we need excellent salaries, and with this government, wages have increased more than prices,” he added, claiming that no ceiling has been imposed on negotiations.
“The dollar is not the Argentine currency, but it has much symbolic and cultural power, because we had very economically unstable times prior to the past 10 years,” Kicillof said, arguing that “times when (the country was going) bust always have to do with the dollar.”
“The illegal dollar... seems to be run by a cartel and is far from transparent,” he charged.
The minister also spoke of a “fetish over reserves, because you have to see when and why they grow,” reiterating current levels at US$27 billion as being three times that of 2001.
Despite the peso’s steep depreciation in January, he also considered that “this government has not made big leaps with pronounced devaluations.”