Argentina’s economy minister resigns over peso and diesel issues: NPR
Jose Luis Magana/AP
BUENOS AIRES, Argentina — Argentina’s economy minister unexpectedly resigned on Saturday, dealing another blow to President Alberto Ferández’s government as the country grapples with economic problems.
Martín Guzmán quit after a week in which Argentina’s currency hit an all-time low against the dollar amid soaring inflation and truck drivers staging protests over diesel fuel shortages.
No successor was announced immediately.
“I am writing to present my resignation as economy minister,” Guzmán said in a seven-page letter to Fernández that he posted on Twitter and which highlighted the internal battles within the organization. ‘administration.
Illustrating the tensions, Guzmán announced his resignation as Vice President Cristina Fernández gave a high-profile speech in which she lambasted the government’s economic policies. The vice president, who is not related to the Argentine leader, is herself a former president and the ruling coalition has split between their allies.
The resignation came after a week of economic turbulence.
With the Argentine peso falling against the dollar, the government on Tuesday made it harder to acquire dollars to pay for imports as the local currency hit new lows in the parallel market used by citizens and businesses to circumvent official channels.
Argentina has suffered from a dollar shortage for years, which stems in part from Argentines’ mistrust of their own currency amid high inflation. Inflation is running at an annual rate of over 60% and economists expect the rate to continue to deteriorate.
Work stoppages by truckers have disrupted economic activity, including the delivery to ports of grain, which is one of Argentina’s main imports.
On Wednesday, the government said it was trying to increase the availability of diesel by allowing more biofuel to be blended in fuel and suspending the import tax on diesel.
Argentina produces diesel but not in sufficient quantities for its needs and depends on imports, with world prices rising due to disruptions caused by the pandemic and the Russian invasion of Ukraine.
Analysts say one of the reasons for the shortage is that it is unprofitable for oil companies to import diesel because the government prevents them from charging what it costs to buy on the international market. .
In his resignation letter, Guzmán suggested that at least part of his reason for leaving was because he lacked political support within the government.
“Based on my experience,” he writes, “I consider that it will be fundamental to work for a political agreement within the government coalition so that the person who replaces me has centralized control of the instruments of necessary macroeconomic policies…to meet the challenges ahead.”
Guzmán had held office since the start of the Fernández government on December 10, 2019, and has long been one of the most prominent figures in the Cabinet.
Early in the administration, he was seen as a staunch ally of the president, but also as someone who could help bridge the rifts within the often fractious governing coalition. In recent months, however, he has clashed with some officials loyal to the vice president and his influence in government appears to be waning.
Guzmán’s first challenge in the job, and success, was to negotiate a restructuring of Argentina’s debt and avoid a default.
He then struck a debt relief deal with the International Monetary Fund, but some of the more leftist elements in the government said it included too many concessions that would hamper Argentina’s economic growth.
Lawmakers allied to the vice president voted against the IMF deal in Congress, and Guzmán’s resignation raises doubts about the country’s ability to meet the terms of the deal.
In his letter of resignation, Guzmán said that his main objective when taking office was to “calm the economy” and that in order to do this it was necessary to “resolve the problems of the unsustainable foreign debt which weigh down the State, as well as all of Argentina.”