The former Minister of Economy, Domingo HorseHe was in Argentine Odyssey (LN+) con Carlos Pagniwhere he left several definitions regarding the country’s economic course and the performance of the ruling coalition.
consulted on Serge Massathe man who currently occupies the role he played during the governments of Carlos Menem and Fernando De la Rúa, the former civil servant he regretted that his ideas had changed so much over the years.
“I think that Massa, originally, did not think like that. A minimally educated person or with advisers in Economics, who passed through the Ucedé, would have had to think in a completely different way from Cristina. But if you actually watch videos of Massa’s expressions, you have to come to the conclusion that he knows it’s the totally wrong approach.”
And he added: “I have my doubts regarding the seriousness of his thinking, the way he handled Anses and, above all, the initiative they had with [Amado] boudou incorporating a huge number of people who had not made contributions to the pension system, was a huge mistake.
In this sense, he highlighted: “It seems to me that the great political weakness of this trio by Christina [Kirchner]Alberto Fernandez and [Sergio] Massa is that they do not have an adequate orientation in economic matters of thought”. This is because, in his opinion, “They do not believe in the benefits of the market economy and competition, they believe that the State can get involved in all aspects of economic life”.
“That is a blunder with very concrete manifestations. The lack of professionalism with which the Central Bank is managed is very dangerous,” he added. And he said: “I have been arguing that the foreign exchange market should have been unfolded and all other transactions diverted to a free market.”
Cavallo considered that if Gabriel Rubinstein had taken over as Vice Minister of Economy, a referent who had been selected by Massa before discovering his posts in which he criticized Alberto Fernández and Cristina Kirchner, “I would surely be doing what I support”.
For the former Minister of Economy, the answer is simple: “Devaluation would solve nothing. It would only aggravate the situation.”. Instead, he considered that the recipe to be applied is another: “They should have lowered withholdings. It would encourage exports a little more, it would stop imports.”
He then warned that “if they continue to make these mistakes and mismanage the economy as they have done up to now, it might happen that a very strong devaluation takes place and it would bring undesirable and inflationary consequences”. Then he delved into decisions that the Government did take and that he considered “not beneficial.”
“It was a big mistake to have kept the rates frozen,” He gave his opinion on the policy regarding electricity and gas, at the same time that he stressed that “the tariff delay is much more important than the exchange delay” since “if the price of the dollar increases a lot, subsidies increase more than proportionally”.
Cavallo also referred to a possible adjustment, a concept demonized by the ruling party. Along these lines, he differentiated: “I think that Macri might have done it if he was capable of producing significant results. But Cristina Kirchner does not. And the problem is that the rest of his ideas are dangerous for the future of the country.”.
In the last sections of the interview, and in accordance with the pessimistic scenario that the also economist predicts for Argentina, he focused on the increase in the inflation rate and made a harsh forecast: “Inflation is going to soon be in the order of 100% per year.”