Friday, September 29, 2023

Milei and Bullrich’s economic mistakes, according to Domingo Cavallo

The former Minister of the Economy, Domingo Cavallo, highlighted this Sunday the mistakes that, in his opinion, two of the presidential candidates, Javier Milei and Patricia Bullrich, are making economic matters with a view of the general the October election.

“I appreciate it, but I think Milei made a serious mistake, in my opinion. She has the potential to become a leader because she made an event that no one expected and that was unprecedented, that can convince a large number of young people, transversally, even very humble people, that he is able to provide solutions. But he is dedicated to acting as a professor of economics“, he said about the leader of Libertad Avanza, who has been praised by the public many times.

In an interview he gave to TNHe added: “Try to explain the details of each of the things you are going to do, how you are going to do it, when you are going to do it. That is a very serious communication error. I told him, but he didn’t listen to me in that sense.”

In another section of that note, he emphasized that Milei brought up the issue of dollarization “early” and said that “in the beginning he raised it better than his collaborators are raising it now.” In addition, he pointed out that “in order to govern”, the libertarian “will need the support of many people and also of politicians.”

“He has to do it now less aggressive and insulting speech for other leaders. I am not saying you should stop talking about caste because you are right, but you should consider that if you are going to be president you should get support,” he advised.

Meanwhile, about the candidate of Together for Change, he stated: “This is also a serious mistake, for example, in the case of Patricia Bullrich concentrate all efforts, through the preaching of Melconian and his group, to discuss with Milei the issue of dollarization yes or dollarization no, and to say that the bimonetary system instead of dollarization is better.

Cavallo Suggests That The Natural Thing Is To Go To A Bimonetary System.  Photo By Juano Tesone

“They are not two entirely incompatible and different things,” he added. And he favors one of the ideas promoted by Bullrich: “The natural thing to do in a situation like this is to move to a bimonetary system. For the same reasons that progress is needed in Ecuador, and for the same reason that it needs to be done in Peru, which is governed by hyperinflation.

Similarly, although he described him as “a very good economist who had trouble putting together a good team and trying to have a complete plan,” he pointed out a flaw in Carlos Melconian, the Minister of Economy appointed by Bullrich for his last government. “It doesn’t seem right to me that the only thing he’s dedicated to, at least from what we’ve seen these days, is attacking Milei and saying that everything Milei says is terrible,” he said.

“Patricia was smart to ask him to play for her to show that she has a team and a plan. The bad thing is to leave Laspina, who is one of the best economists in existence,” he said.

He also admitted: “I am saddened that now the biggest discussion is between Together for Change and Milei if they are in the same situation in terms of economic organization. They shouldn’t have fought, or fought less. Or in any case, explain what the possibility of Massa, as a Kirchnerist, means that one listens to the speech and as if Kicillof is there. “The danger I see is that Kirchnerism clings to Kicillof’s ideas.”

Domingo Cavallo: “The exchange market must be unified and free”

In that sense, he suggests that for bimonetarism to work “it must include two basic ingredients, otherwise it will be useless.” “For example, The exchange market must be integrated and free; And for the peso to be able to compete with the dollar under these conditions and for people to demand it, they need to implement a strict fiscal policy and very good money management,” he said.

“If they do that, they are likely to achieve a result like Peru: that the exchange rate is stabilized, there is no permanent reduction as usual and what causes people to flee from the national currency, and the economy It is going to function as a semi-dollarized economy,” explained the economist and former official in the governments of Carlos Menem and Fernando De La Rúa.

The advantage, he argues, is that “people will feel more secure in depositing or buying dollars, but without the possibility of using dollars for financial intermediation within Argentina, there is no point .”

Asked if the dollarization proposal seemed good to him, he replied that “if the exchange market is unified and liberalized, that is, there is free movement of buying and selling for any destination, we will be in a position to find a strong stabilization, as it happened.” the conversion plan.

Cavallo Said That The Exchange Market Should Be Unified And Liberalized.  Photo By Juano Tesone

Cavallo said that the exchange market should be unified and liberalized. Photo by Juano Tesone

Cavallo assured that “that moment is at least a year or a year and a half ahead” and that he called “non-traumatic process of integration and liberalization in the exchange market.”

In the end, despite his analysis, he refrained from making any suggestions about how to get out of the difficult economic times for the country.

“I will not suggest anything because it would be irresponsible. These decisions must be made based on the situation at the time, the credibility achieved and the response of Argentine and foreign investors. Making economic policy is not about writing mathematical models or working as a class, using a blackboard. It depends on the circumstances and it may also be necessary, like in Ecuador, to dollarize,” he said.

Nation World News Desk
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