Argentine economy minister resigns amid peso, diesel woes: NPR

FILE – Argentina’s economy minister, Martin Guzman, walks outside the building of the International Monetary Fund, IMF, during the IMF spring meetings in Washington, April 21, 2022. Guzman announced his resignation on Saturday, July 2, via Twitter.

Jose Luis Magana / AP


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Jose Luis Magana / AP

Argentine economy minister resigns amid peso, diesel woes: NPR

FILE – Argentina’s economy minister, Martin Guzman, walks outside the building of the International Monetary Fund, IMF, during the IMF spring meetings in Washington, April 21, 2022. Guzman announced his resignation on Saturday, July 2, via Twitter.

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 resigned after a week in which the Argentine currency hit an all-time low against the dollar amid blistering inflation and truck drivers protesting diesel fuel shortages.

A successor was not immediately announced.

“I am writing to you to tender my resignation as economy minister,” Guzmán said in a seven-page letter to Fernández that he published on Twitter, highlighting the internal struggles within the government.

To illustrate the tensions, Guzmán announced his resignation while Vice President Cristina Fernández delivered a high-profile speech criticizing the government’s economic policies. The vice president, who is not related to the Argentine leader, is a former president himself and the governing coalition is splintering among their allies.

The resignation came at the end of a week of economic turmoil.

As the Argentine peso slides against the dollar, the government made it harder on Tuesday to acquire dollars to pay for imports as the local currency hit new lows in the parallel market used by citizens and businesses to bypass official channels. .

Argentina has been struggling with a dollar shortage for years, partly due to Argentinians’ distrust of their own currency amid high inflation. Inflation is over 60% annually and economists expect this rate to continue to deteriorate.

Work stoppages by truck drivers have disrupted economic activity, including the supply to ports of grain, one of Argentina’s main imports.

The government said on Wednesday it was trying to increase diesel availability by allowing more biofuel and also suspending the import tax on diesel.

Argentina produces diesel, but not in sufficient quantities for its needs and is dependent on imports, with world prices rising due to disruptions from the pandemic and the Russian invasion of Ukraine.

Analysts say one of the reasons for the shortage is that it is not profitable for oil companies to import diesel because the government prevents them from counting on the international market what it costs to buy.

In his letter of resignation, Guzmán suggested that at least part of his reason for leaving was because he lacked political support within the government.

“From the experience I have gone through,” he wrote, “I consider it fundamental to work towards a political agreement within the governing coalition, so that the person replacing me has centralized control over the necessary macroeconomic policy tools. challenges that lie ahead of us.”

Guzmán has been in office since the start of Fernández’s government on December 10, 2019 and has long been one of the most high-profile figures within the cabinet.

Early on in the administration, he was seen as a staunch ally to the president, as well as someone who could help bridge the divide in the often-troubling coalition government. In recent months, however, he clashed with some officials loyal to the vice president and his influence within the government appeared to be diminishing.

Guzmán’s first challenge in the job, and success, was negotiating a restructuring of Argentina’s debt and avoiding bankruptcy.

He later reached a debt relief deal with the International Monetary Fund, but some of the government’s more left-wing elements said it included too many concessions that would stunt Argentina’s economic growth.

Lawmakers affiliated with the vice president voted against the deal with the IMF in Congress and Guzmán’s resignation raises doubts about the country’s ability to honor the terms of the deal.

In his letter of resignation, Guzmán said his main goal in taking the job was to “calm the economy” and to do so “solve the problems of unsustainable foreign debt overwhelming the state, as well as all of Argentina.”

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