Argentina trade secretary’s resignation heralds policy shift

By Benedict Mander in Santiago

Argentinian Secretary of Domestic Trade Guillermo Moreno gestures during a meeting with Argentine and Brazilian businessmen at the Federation of Industries of Sao Paulo State (FIESP) in Sao Paulo, Brazil on May 8, 2012. The meeting was organized to increase the commercial opportunities and about 800 entrepreneurs from both countries are taking part

Guillermo Moreno, Argentina’s powerful internal trade secretary, resigned on Tuesday, a day after a Marxist professor was put in charge of the economy ministry, heralding a major shift in economic policy.

The departure of the pugnacious Mr Moreno, who won notoriety for stunts such as bringing boxing gloves to shareholder meetings, marks the end of an era for businesses that have lived in fear of the controversial figure since he was appointed trade secretary in 2005.

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His resignation follows the return of President Cristina Fernández to the public arena on Monday, when she posted a video on the internet thanking Argentines for their support during her six-week convalescence after brain surgery.

Economists now fear a jump in inflation, which is running at 25 per cent annually, according to private economists, as one of Mr Moreno’s principal tasks was to keep a lid on prices by strong-arming companies into keeping their prices low.

Mr Moreno, who was long considered the de facto economy minister, was more recently also charged with stemming a sharp decline in foreign exchange reservesby as much as $1bn a month by denying companies dollars to import goods.

With Mr Moreno out of the way, the promotion of Axel Kicillof to economy minister on Monday makes him theundisputed captain of economic policy, already having amassed considerable power since he was made deputy minister last year and placed in charge of the nationalisation of YPF, the state energy company.

“Instead of interventionism in the form of bullying, threats and phone calls, we will have interventionism with rules, regulations and controls. Not much to celebrate,” said Federico Thomsen, an economist in Buenos Aires.

Even so, analysts predicted a rally in Argentine bonds and the local stock market, where prices fell following the promotion of Mr Kicillof, an expert in Keynesian economics who sports Elvis-style sideburns.

Markets would have further reason to cheer if a new and more credible inflation index is implemented. Mr Kicillof himself has publicly criticised Indec, the state statistics agency, as well as the International Monetary Fund.