November 25, 2015 10:17 pm
Mauricio Macri, the centre-right mayor of Buenos Aires who won Argentina’s presidential elections on Sunday, named economist Alfonso Prat-Gay as his finance minister on Wednesday.
The 50-year-old former JPMorgan executive and former central bank governor will be responsible for reinvigorating an economy wracked with double-digit inflation as well as untangling a web of economic controls after 12 years of protectionism and state intervention.
The most urgent task facing Mr Prat-Gay will be to address a severe shortage of foreign exchange reserves at the same time as unifying a complex exchange rate regime and removing strict capital controls, which Mr Macri has promised to do on his first day in office on December 11.
Mr Prat-Gay’s appointment was confirmed during a press conference on Wednesday in which a cabinet dominated by technocrats was announced.
Federico Sturzenegger, an economist who turned the lossmaking Banco Ciudad into the most profitable state-owned company before becoming a congressman in 2013, was named governor of the central bank.
That post is occupied by Alejandro Vanoli, who Mr Macri accuses of causing the state serious losses through derivatives trading aimed at propping up Argentina’s currency. Mr Macri’s government would resort to legal means if Mr Vanoli refuses to step down, according to future cabinet chief Marcos Peña.
Other ministers include a former Shell executive, Juan Jose Aranguren, who will head a newly created energy and mining ministry, as Argentina hopes to attract foreign investment to develop its vast shale reserves in Patagonia. Lino Barañao, minister for science and technology, will remain in his post.
On Tuesday, Mr Macri confirmed that his foreign minister would be Susana Malcorra, who is cabinet chief of the secretary-general of the UN, Ban Ki-moon.
Markets reacted positively to the appointment of Mr Prat-Gay, who set up his own asset management company, Tilton Capital, after leaving the central bank at the end of his term in 2004. His term was not renewed amid differences with the then president, Néstor Kirchner, over the degree of independence of the monetary authority.
Appointed as governor in 2002 when he was 37, Mr Prat-Gay’s stint at the helm of the central bank came as Argentina was recovering from a severe financial crisis. During his tenure, inflation dropped from 40 per cent to 5 per cent.
He turned to politics in 2009, when he joined the opposition Civic Coalition, now a member of Mr Macri’s “Let’s Change” coalition.