10 de diciembre de 2015 / 12:26 / en 2 años

UPDATE 1-Macri's challenge: Restore Argentina's long-lost economic power

(Adds analyst quote, row over handover ceremony)

By Hugh Bronstein

BUENOS AIRES, Dec 10 (Reuters) - Mauricio Macri takes over as president of Argentina on Thursday, promising to harness its vast natural resources and jettison populist policies to revive an economy that has for decades fallen short of its potential.

If he gets it right, investment could stream into the country, given its Pampas grains belt, promising technology sector, highly educated work force and some of the world’s juiciest shale oil deposits.

Macri won the presidential election last month by pledging to ease trade and currency controls and give the free market a chance after heavy state control of the economy under outgoing leader Cristina Fernandez.

He will take the oath of office at midday local time (1500 GMT) in a ceremony Fernandez has refused to attend after a row over where Macri is to receive the presidential sash and ceremonial baton.

It will be the first time since the 1983 end of Argentina’s military dictatorship that a president has not attended the inauguration of an elected successor.

Fernandez wanted to hand the sash and baton to Macri in Congress. He decided to hold that part of the handover later, at the presidential palace, and Fernandez refused.

“Everything about this transition has been abnormal, even by Argentine standards,” said political analyst Ignacio Labaqui, referring to Fernandez’s refusal to share normal transition information with Macri in the run-up to the inauguration.

In a farewell speech to supporters late Wednesday, Fernandez expressed outrage at Macri for seeking a court injunction affirming that her term ends at midnight.

“I can’t speak long because at midnight I turn into a pumpkin,” she quipped.


Macri supporters say the changes he will bring in are long overdue, but he will have to tread carefully if he is to cut state spending to sustainable levels without pushing the troubled economy into recession.

“With the resources this country has, there’s no reason for our economy to be stalled or imports to be blocked,” said Teresita Ugolini, a 70-year-old cosmetologist who remembers the open export policies that once transferred the wealth of the Pampas to the cosmopolitan boulevards of Buenos Aires.

In 1930, Argentina was the world’s No. 6 economy with a gross domestic product bigger than the rest of Latin America combined, but financial mismanagement and political instability in recent decades have caused one crisis after another.

Fernandez leaves office loved by many for having boosted welfare spending as the country was still climbing out of poverty caused by a devastating 2002 economic crisis.

Aided by high world grains prices, her first years in power saw strong economic growth. But the end of the commodities boom, combined with heavy government spending and currency controls hurt growth and sent inflation soaring to well above 20 percent.

Macri hopes to light a fire under exports by letting the overvalued peso currency weaken, and to settle a politically sensitive lawsuit filed by U.S. hedge funds who are demanding full repayment of debt Argentina defaulted on in 2002.

A settlement would open up much-needed international bond financing, and Macri’s team knows its way around Wall Street.

The local Merval stock index has surged 17 percent since late October. Continued market optimism will depend on quick action to narrow a 50 percent gap between the official and black market currency exchange rates, and to free up farm exports in part by slashing export taxes.

“Macri needs to get some immediate points on the board to justify the confidence that exists,” said Gary Kleiman, of Kleiman International Consultants in Washington.

Additional reporting by Gabriel Burin; Editing by Kieran Murray and Bernadette Baum

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