By Guillermo Laborda and Pablo Jiménez
In an interview with ambito.com and Ámbito Financiero, Economy Minister Axel Kicillof made reference to the dollar, inflation, income tax and even the FIFA scandal. He also took aim at US Judge Thomas Griesa. He did, however, avoid talking about the two ruling Victory Front (FpV) presidential hopefuls — Buenos Aires Governor Daniel Scioli and Interior and Transport Minister Florencio Randazzo.
What will the the IMF’s revision of INDEC’s numbers be like?
We are joining the IMF in what we hope will be a technical collaboration. The Fund has manuals regarding census and statistics collections and its a role that it has been playing since the Second World War. Argentina, due to an internal need, modified its price statistics to create for the first time a federal index. All of the discussions about inflation in Argentina were Buenos Aires-centric, and we all know that what happens in Buenos Aires doesn’t happen in the rest of the country regarding prices, costs, fees for public services, home expenses and habits. For this, we’ve been working with the IMF to design the IPCNu index, which is national. You always know the ideological bias of the IMF when you deal with them. They were partly responsible for 2001’s default. That wound is still there because they caused it and never said sorry. So it’s a difficult relationship. Anytime Argentina estimates its growth they take their orthodox manual and say “let’s see, does this agree with orthodox liberalism? No, OK, then they are going to do badly.” In this case, we tried to isolate this problem to make use of a service that the Fund provides which is statistics elaboration and we worked very well with Indec. One of the problems that the IMF had with our price index was that its results were very different when compared to private estimations. So we asked many times: why don’t you test them? Because what they are going to find is sometimes two guys calling five shops on the phone. Then there’s Patricia Bullrich’s index which they roll a dice and calculate inflation. Their dice are prone to end up showing high numbers. In the work we have been doing together, there’s a communicational difficulty because of the disaster that they carried out here.
Will they stand by the new IPCNu?
On a technical level we are working together well, but the political direction is decided by the IMF’s leadership and there we aren’t doing so well. We want to keep on improving statistics and keep working with the Fund because they have contributed to our design. On a communication level, there are always clashes, because we don’t like how they communicate. I hope they say that we have worked well and will continue working. As long as they don’t make this a political issue, we aren’t going to do so either. It’s a topic we are trying to keep separate from politics.
You’re expected to take some measures to reactivate consumption levels. For instance, an increase in the Universal Child Allowance (AUH)…
I’m not going to announce any of these measures, but I’ll stress that the national government has been quite aware of the development of current economic policies in order to have the quick reactions shown by Cristina Fernández de Kirchner when there’s real trouble. The government is always willing to collaborate (to face these problems) and a measure always appears. Not always the solution, of course — that is the case of the automaking sector, where 60 percent of what’s produced in the country goes to Brazil. That means that if one of these days Brazilians decide they won’t buy a single car, 60 percent of our industry will be brought to a halt. Car sales in Brazil were down 25 percent, and Argentine models were the ones who saw the biggest decreases. That is not Argentina’s fault. We’ve met with Industry ministers to see if sales of Argentine cars could be maintained at a certain level. What is left for us to do at this point? To generate stimulus programmes for the domestic market and for internal consumption and investment to grow in order to replace the lack of strength shown by the international economy. We’re acting really quickly.
What’s your view regarding the elections?
Argentine history has lots of contradictory experiences. Some governments took on a crazy amount of debt and directed the country towards catastrophe, even with the media in favour — they weren’t showing how people were being affected. In several aspects, this government has done the opposite. First, it showed where the real problems were — I’m talking about deindustrialization, lack of social inclusion, inequities, some interest groups that put conditions on governments and their economic policies, naming officials in key areas. If economic groups appoint government officials, I don’t know why a country holds elections. I’m telling you this because I heard that a group of businessmen wanted to talk to a certain candidate to put conditions on his cabinet. Some candidates, in fact, applauded the high level of indebtedness and now are promising different things — to pay vulture funds whatever they’re asking for and to put the country back on the path of indebtedness. If we take a look at what’s happening in countries like Greece and other European countries, even China — which expects a seven-percent growth this year, the worst in the last 15 years — and what’s happening in the US, that was out of the economic crisis and presented poor figures this quarter… The world is complicated. This idea of paying the vultures at face value and taking on debt for US$100 billion dollars looks like bringing out the genie’s lamp and making a wish. That’s nonsense. Now some candidates are coming from political experiments, even talking about “non-politics,” making strange dances, throwing colorful balloons, they’re in a kind of endless party.
Inflation is still high. Do you have any particular measure in mind?
Throughout these years we have begun to discuss who is responsible — and which are the causes — for the increases in prices. Some people are saying that the government is the sole responsible for the price hikes, that it has something to do with the increase in public spending, and that when (the government) invests is spending a lot of money. I believe that in the last few years, with the Precios Cuidados price-watch programme and other measures, with direct debates with highly-concentrated sectors of the economy over price-fixing, the issue of currency (controls) and controls in the retail area. We’ve proven that measures could be taken. Since 2014 we sealed voluntary accords to mark down prices in all areas. It’s a price-control programme with voluntary deals, not a witch-hunt. Each time a sector is going to mark-up their prices, it has to tell the Commerce Secretariat why that is. Opposition sectors want a change in the political orientation, they said inflation was going to be 40 percent (this year), they missed the mark by 15 percentage points. They need to accept that there has been a year-on-year slowdown in figures of 15 percent, according to their numbers. We passed from 40 to 25 percent — and I think the number was lower last year. This year, I don’t believe (the inflation rate) will pass the 18-percent mark. The real deal is that we’re seeing a deceleration in prices. Would Argentines be better if they hadn’t being forced to hear a loudspeaker telling them they were going to lose their jobs, that there was no investment, that we were completely isolated by the world? I’m saying this to warn some politicians who are afraid of Clarín’s front pages (potentially attacking them) the same way they did with me.
Do you have any preference between the two ruling-party candidates? Scioli or Randazzo?
Within the ruling party, we discuss the plan for the next few years to greater extent that the opposition. It’s paradoxical. The opposition doesn’t argue [between themselves], they don’t say what they are going to do, because it has to lie.
We are discussing who is going to be the candidate to guarantee the continuity of our political project. It is a healthy debate because the candidates present themselves before society and within our party, and the deciding factor is who is the best candidate whom best expresses the continuity of Cristina Fernández de Kirchner’s government.
There is much in this discussion yet to be had, because elections produce a pact with the electorate, you have to put these issues on the table, present the government with plans in order to discuss substantive issues. The ruling party is setting an example. The other candidates, outside of our party have opted to organize a birthday party instead of an electoral campaign. It is the same in the City. There are two projects in the City and three candidates. There is a candidate who represents our position. But the subway work was done and the bus lanes were replaced with flowerbeds, subsidized by the national state making them cheaper, all the while calling this a transport policy. This is not a transport policy.
What’s your view on the FIFA scandal?
What happened at FIFA is clear, I am not an expert but Torneos y Competencias, a company historically related to Clarín, is involved. That same newspaper denounced me for corruption saying I earned 400,000 pesos in YPF, which is against the law, they said I was being paid two salaries, and it was a crass lie. They are trigger happy to denounce corruption of that which is an obstacle to their interests but when the matter gets close to their partners or their financiers the topic is not covered in the newspaper. It’s investigative journalism that only investigates what agrees with their interests.
Will Griesa block the Boden 2015 payments?
They said there was going to be a problem but the government can pay. One part remains inside and the other goes outside. Argentine investors are asking for a bond exchange, more and more of them are interested in the Argentine bonds. One day the President order me to launch a Boden 2015 swap for cash payments, and they all preferred to keep the bond above the dollars. There was a campaign saying everything was going to collapse and it didn’t happen.
Will there be more changes to income taxes?
What we say is that among all Argentine workers, the 11 million of them, only 10 percent paid that tax: those who earn the most. We say that everyone wants to have their taxes reduced, of course, but this tax has this special characteristic: it’s the most progressive, because its levies on those who earn the most and with that money we pay for pensions, the AUH and infrastructure investments.
Source: Buenos Aires Herald
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