A Conversation with the Finance Minister of Argentina, Alfonso Prat-Gay.  April 14

Guests convene in the Atlantic Council lobby prior to the event
On April 14 the Finance Minister of Argentina, Alfonso Prat-Gay, came to the Atlantic Council to speak about Argentina’s new economic agenda under the nascent Macri administration. For the last decade Argentina has been exiled from the international economic community over a dispute with holdout creditors from their 2001 default. With high inflation, unemployment, poverty, and a dishonest government that skewed economics statistics, the nation with the second largest economy in South America was hardly in good economic health. Under President Macri’s administration, Prat-Gay’s leadership of the economy has exceeded expectations in getting Argentina back on track during his first 120 days in office, and has positioned it to be the future leader of South American economies.

Prat-Gay Walking in with Andrea
Minister Prat-Gay is escorted in by the Atlantic Council’s Global Business & Economics Program and Adrienne Arsht Latin America Center Directors Andrea Montanino and Peter Schechter 
  • Argentina lost $120 billion worth of savings that did not stay in the country, investments that were not made, and payments that were not paid during the repayment holdout.
  • To allow the Macri administration to make the repayments, Senate approval was required.  The proposed bill won 54 out of 75 votes.  Of those 54 votes, 34 came from opposition parties, and more came from the Frente Para la Victoria party, which was formerly opposed to paying.

20160418 Alfonso Prat-Gay2
Minister Prat-Gay speaks about the structural reforms that have been during his short time in office
  • The Macri administration is expending resources to accommodate those who are most vulnerable to the reforms.  To be able to finance the future welfare and infrastructure investments without flooding public debt, regaining access to international credit markets was key.
  • Reining in inflation will be critical to growing political capital heading into elections next year.  Gaining political capital and seats in congress will be crucial to implementing planned structural reforms.
Prat-Gay and John Authers
 After his speech, Minister Prat-Gay took part in a Q & A with John Authers from the Financial Times
  • Regaining their credit rating would result in Argentina paying $2 billion to the IMF, and subsequently receiving $8 billion in IMF loans back that can be injected into the Argentine economy.
  • “It is not just you or the financial sector that are excited about Argentina, the excitement runs deeper.  The opportunity now is real, and it is true.  What we are trying to do is to maximize the benefits of the opportunity and bring it forward, and the sooner the better.” – Minister Prat-Gay