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Response to Peace Patriot (Reply #2)

Tue Oct 20, 2015, 07:16 AM

3. Good question. I think the answer may be in his choice for Economy Minister. Here's what we know:

Scioli's choices for key post of Economy Minister had been narrowed down to three people: Silvinia Batakis, Miguel Bein, and Mario Blejer. Of the three, Batakis is the most populist; Blejer the least; and Bein in between.

The local media for the most part had predicted that Miguel Bein would get the nod. Scioli however chose Ms. Batakis - which for me made sense given that she's been his Provincial Economy Minister for 4 years now; Bein or Blejer will most likely be the Central Bank President (in Argentina, not quite as powerful a post as Economy Minister). Her style? No nonsense, skeptical, yet flexible. She's probably the first Economy Minister in Buenos Aires Province history to have successfully tackled property tax evasion, particularly by large landowners.

Even so, Batakis is generally said to have a positive relationship with business and employers. While turning the chronic provincial budget deficit into a surplus, for instance, she also courted bond markets and oversaw several successful provincial bond issuances. Institutional investors have largely praised her for those twin policies.

That's fiscal policy; but what about financial policy? Because Argentina, like most countries in the world, can't create hard currency out of thin air (the way the Fed did to paper over $20 trillion in derivatives losses in '08, for instance), it only has a limited supply of dollars with which to pay all its foreign obligations (imports, foreign debt payments, royalties, what tourists use abroad, etc.). For this reason, there are limits on the access to dollars and other hard currency.

Batakis favors exiting the current restrictions on the dollar trade (already eased somewhat last year) - but gradually, and in part by courting the bond markets more actively than is currently the case. But she's more interested in making sure the industrial sector and other employers can import what they need with fewer obstacles, than of facilitating speculators and tax cheats (who usually ferret everything they can to offshore tax haves anyway). That's another key difference in her - and Bein's - brand of "pro-business" policy and of someone like Macri.

In her case (and Scioli's), I believe this should be read as 'pro-employer'.

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forest444 Oct 2015 OP
Judi Lynn Oct 2015 #1
Peace Patriot Oct 2015 #2
LineLineNew Reply Good question. I think the answer may be in his choice for Economy Minister. Here's what we know:
forest444 Oct 2015 #3
Peace Patriot Oct 2015 #4
forest444 Oct 2015 #5
Judi Lynn Oct 2015 #6
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