Thursday, December 5, 2013

VOXXI: Axel Kicillof, Argentina's New Powerful Minister of Economy

Axel Kicillof, Argentina's New Powerful Minister of Economy
W. Alejandro Sanchez
December 4, 2013
Originally published:

Axel Kicillof, the new powerful Minister of Economy, is the most important Argentina’s political figure of the moment and the close advisor of President Cristina Fernandez de Kirchner.
At the relatively young age of 42, Kicillof has had a meteoric rise to power.
His accomplishments include being a professor at the Universidad de Buenos Aires, the director of the Argentine steel company SIDERAR, and a senior manager at Aerolineas Argentinas, the country’s flagship airline. It is worth noting that this company was under the control of a Spanish investment group, Grupo Marsans, from 2001 until 2008, when it was expropriated.
He also served as deputy minister at the Ministry of Economy until he was promoted.
Segments of the international media have portrayed Kicillof in a positive light.
For example, a memorable April 2012 article in Vanity Fair describes the Argentine minister as both good looking and the mastermind behind the expropriation of YPF, an energy company that had the Spanish giant Repsol as its major stakeholder.
The Argentine government took control of Repol’s 51 percent shares in April 2012.
This move has been portrayed as a prime example of President Kirchner’s preference for the nationalization of companies and a protectionist economy instead of supporting privatization and free trade.
The flattering Vanity Fair piece also highlightsa declaration by Kicillof, who memorably said during an informal meeting,
“a Cristina la tengo hipnotizada” (I have hypnotized Cristina).
Whether this statement was meant as a light-hearted joke or not, it is generally believed that Kicillof does have a high degree influence in the Casa Rosada (the Argentine palace of government).
To be fair, it should be stressed that critiques of Kicillof come from Argentine media outlets that are known to be anti-Kirchner.
Most notably is the daily Clarin as its parent company, the Grupo Clarin has been involved in a constitutional dispute with the Kirchner government for the past four years (the government argues that it is trying to democratize the Argentine media).

Axel Kicillof’s Friendly Staff

Liberal Argentine analysts have pessimistic expectations of Kicillof’s tenure, which should last at least until Argentina’s next presidential elections in 2015.
For example, Fausto Spotorno, from the Orlando J. Ferreres Center for Economic Studies, believes that Kicillof will have more powers than previous ministers, and will not have to negotiate with others.
Incidentally, one of Kicillof’s first decisions after assuming his new powers was to name Augusto Costa as the new Secretary for Domestic Commerce, a powerful department within the Ministry of Economy.
From January 2013 until his recent promotion, Costa had served as Secretary of International Commercial Relations at the Ministry of Foreign Affairs.
Costa graduated from the University of Buenos Aires, where Kicillof taught, and with 39 years of age, is even younger than the Minister.
Kicillof has also promoted several of his allies into positions within the Ministry.
In late November he declared “some of them have been with me for over ten years and are part of the project of Nestor Kirchner andCristina Fernandez de Kirchner.”
It is obvious that a new minister wants to place like-minded, friendly individuals in senior positions, but one can only wonder if we are witnessing an omnipotent-minister in the making, as some anti-Kirchner analysts have suggested.

What to expect from Axel Kicillof?

During a speech on December 2, Kicillof critiqued “neoliberal policies;” such declarations suggest that he remains convinced that his protectionist, nationalization-prone initiatives would bring inclusive growth.
Nevertheless, he has also attempted to extend an olive branch to Argentina’s industrialists and entrepreneurs.
Buenos Aires recently reached a deal with Repsol, though it has not been revealed the exact amount that Buenos Aires paid the Spanish company for its share of YPF. Regarding this topic, Kicillof declared “it was impossible to not pay [Repsol] as that would have been illegal.”
Rather than arguing that the controversial 2012 expropriation of YPF was a mistake, Kicillof hinted that the agreement with Repsol, over a year later, was part of his master plan all along.
Meanwhile, Kicillof’s critics continue to argue that energy self-sufficiency, which the government had promised would be reached by 2012, has yet to happen, and there will be a growing deficit in 2013, just like in 2012, due to energy imports.
Energy issues will be critical for Kicillof to address while he is at the helm of Argentina’s economic fate. It will be particularly interesting to see what decisions he will make regarding projects like the oil deposits in Vaca Muerta .
As for the degree of Kicillof’s influence on Kirchner, the media suggests that the new economic minister may be the head of state’s closest advisor, with the YPF move serving as the best example. But Kicillof’s real influence will be demonstrated when he inevitably clashes with other branches of the government, such as the Ministry of Defense.
Ultimately, unless Kicillof and Kirchner manage to turn around the Argentine economy in the near future, this close partnership may not last and this rising star may be out of a job in 2015 when a new leader moves into the Casa Rosada.

No comments:

Post a Comment