With a new “super minister”, Argentina is looking for a political solution to economic problems

Argentine President Alberto Fernandez is seeking a political solution to the country’s economic crisis by appointing a longtime politician as the new “superminister”, analysts say.

The South American country has been suffering from an economic crisis for years, and around 37 percent of the population now live in poverty.

In the first half of this year alone, inflation was over 36 percent and is expected to reach 80 percent by the end of the year.

Against this backdrop of the crisis, Fernandez on Thursday appointed Sergio Massa, the current leader of the lower house of Congress, as the new superminister to oversee the ministries of economy, development and agriculture, as well as relations with international organizations.

Massa, a lawyer by trade who has spent many years in politics, replaces economist Silvina Batakis, who has been in office for less than a month.

“Massa is not an economist, but a politician. But the point is that Argentina’s crisis is political, it needs a person with broad shoulders and political savvy,” analyst Carlos Fara told AFP.

One of Argentina’s biggest problems is the ongoing power struggle within the ruling Frente de Todos political coalition between Fernandez and Vice President Cristina Kirchner, herself a former president.

At the beginning of July, Batakis’ predecessor Martin Guzman suddenly resigned amid the political turmoil.

Guzman, who was responsible for renegotiating Argentina’s $44 billion debt with the International Monetary Fund, was a close Fernandez ally.

“However, Massa brings sufficient consensus in the leadership of the ruling Frente de Todos coalition and may be able to make decisions that are not popular,” Fara said.

Markets did not falter on Friday, a day after the deadline.

“The markets’ reaction has been positive because they see Massa as a pragmatic figure who has good relationships with business leaders and the markets,” economist Nery Persichini of consultancy GMA Capital told AFP.

Massa will take up his new post on Tuesday after the Chamber of Deputies has chosen his successor. He will then announce his first measures the following day.

“It is very important that a politician is responsible for the economy. Putting technicians in charge didn’t work. It will bring peace to the markets, it’s a pragmatic step,” Pablo Tigani, director of economic consultancy Hacer, told AFP.

Fernandez said the appointment of the new superminister aims to create “better coordination” of economic policies.

As part of negotiations with the IMF, Argentina has committed to reducing its public deficit from 3 percent in 2021 to 0.9 percent by 2024.

One of Massa’s biggest challenges will be increasing Argentina’s available international reserves, which analysts say are at critical levels, and reducing the budget deficit.

“I’m not a savior. Politicians don’t need rescuers, they need servants,” Massa said on Twitter.

“Argentina’s problems cannot be solved by one person, they will be solved through teamwork.”

Persichini says: “There are doubts about Massa’s true ability to cut public spending and mitigate the budget deficit.

“Markets are wondering if the new super minister has the support of Vice President Cristina Kirchner to adjust and correct relative price imbalances.”

Fiscal discipline has so far failed to protect the poorest Argentines from the ravages of runaway inflation eroding their meager earnings.

Thousands of people demonstrated in Buenos Aires on Thursday demanding a “universal salary”.

The protesters are demanding a minimum living wage of 67,000 pesos (around US$490 at the official exchange rate), which is equivalent to the cost of two baskets of basic groceries for the country’s low-income earners.

“It’s like the government has no direction that it’s drowning. I’m very concerned about the lack of work, about the incredible inflation,” Nestor, a 54-year-old unemployed man, told AFP.