The war, so far failed, that Alberto Fernández declared two months ago against inflation lost one of its main strategists on Monday. The Secretary of Internal Trade, Roberto Feletti, a man who answered directly to the Vice President, Cristina Fernández de Kirchner, presented his resignation due to “discrepancies” with the government’s economic policy. For almost eight months, Feletti tried to control the soaring IPC with a strict price control policy, without success. The 58% year-on-year inflation registered in April will now be a problem that Fernández will have to face alone, without the support of Kirchnerism. Guillermo Hang, director of the Central Bank and personal friend of the Minister of Economy, Martín Guzmán, will take over in Feletti’s place.
Feletti’s departure has been evidence of the political schism that is weighing down the Argentine government today. The official arrived at the Ministry of Commerce with the mandate to control inflation with the same strategy that Cristina Kirchner applied during the end of her second term, in 2015: price controls and agreements with companies. Domestic Trade was the Kirchnerist trench, while President Fernández reserved for himself the negotiations with the IMF, completed at the beginning of the year, and macroeconomic policy. But inflation never stopped growing.
Feletti debuted with a 90-day freezing period for supermarket products and a “care price” plan that covered more than 1,400 products. The regulated basket later added another 600. The official was the voice of Kirchnerism in economic management. From the Secretary of Commerce, he defended, for example, a rise in taxes on agricultural exports to decouple international prices from local ones. In almost eight months of management, he was barely able to offer results: food increased by more than 45%, even above the 38% that general inflation added. Two months ago, when the monthly CPI soared to 6.7%, Feletti began to criticize Minister Guzmán with less and less dissimulation. “I don’t do economic policy, I do price policy”, he justified himself then. The problem, they say from Kirchnerism, is that President Fernández is afraid of fighting with the big companies, which are, at the end of the day, the price setters.
Being the visible face of the losing fight against inflation was already too heavy a burden for Feletti and, due to political harmony, also for Cristina Kirchner. It has been, at the end of history, a play in which everyone felt like a winner. Kirchnerism detaches itself from a problem that it cannot solve in an adverse macroeconomic context; President Alberto Fernández adds firepower to the Minister of Economy, Martín Guzmán. This young economist recommended to the president by Nobel laureate Joseph Stiglitz resisted the blows of Kirchnerism in recent months and now seems stronger than ever.
Since last Thursday, the Secretary of Commerce joined his Ministry, with Feletti still at the helm, who previously reported to the Ministry of Production. Feletti did not complain about the change, but this Monday he met with Guzmán for two hours and when he said goodbye he presented his resignation. In his exit letter, which was posted on social networks, he spoke of “discrepancies about the path outlined and the selected economic tools” to get Argentina out of the crisis. And he said that the price control policies he applied were effective at least until February, but “became insufficient after the start of the war in Ukraine and the consequent impact on international food prices.”
The price policy will now be in the hands of a Guzmán man, Guillermo Hang. Hang already worked in the Kirchner governments between 2008 and 2015 and even accompanied Guillermo Moreno, Cristina Fernández de Kirchner’s Secretary of Commerce. For President Fernández, the movement of tokens means taking control of strategies that were in the hands of his internal political enemies. But also assume all the political cost of an eventual failure.
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