Argentina embarks on economic shift

As Argentina absorbs the shock from a sharp plunge in its currency, President Cristina Fernández de Kirchner’s mercurial young economy minister, Axel Kicillof, a scholar with rockabilly-style sideburns and an aversion to business suits, is emerging as the face of policy shifts that are sending tremors through financial markets around the developing world.

Kicillof, 42, is wielding greater influence over an array of areas, from Argentina’s oil industry to the government’s attempts to slow capital flight and improve relations with international creditors, as Mrs Kirchner remains largely absent from the public eye after undergoing surgery in October to drain a blood clot near her brain. The rise of Kicillof, whose writings use Marxist concepts to interpret the work of the British economist John Maynard Keynes, points to efforts by the authorities to assert greater state control over Argentina’s economy at a time when growth is slowing significantly and inflation is soaring.

“He’s the strongest economy minister Argentina has had in a decade,” said Ezequiel Burgo, the author of “The Believer,” a book about Kicillof. “He’s confrontational, outwardly self-confident and sometimes perceived as being arrogant, which of course makes him stand out at a time like this.” Before advising Mrs Kirchner on economic matters, Kicillof taught economics at the University of Buenos Aires. He rose to prominence as a deputy minister in 2012 when he directed the nationalisation of YPF, the Argentine oil company then controlled by Repsol, the Spanish energy giant.
He has repeatedly justified the seizure of YPF, which Repsol had acquired in 1999, in pointed critiques of Argentina’s economic policies in the 1990s of fixing the currency to the dollar and selling state assets. In November, while reviewing Argentina’s offer to compensate Repsol for its stake in YPF, he contended that authorities had previously laid the foundations “for the pillaging of our companies.” Since Mrs Kirchner named him economy minister in November, Kicillof has been thrust into the spotlight.
Modest lifestyle

Paparazzi trail him around his middle-class neighborhood, Parque Chas, and a celebrity magazine has described his relatively modest lifestyle — reflected in the car he drives, a compact 2008 Renault, and his decision to forgo bodyguards on a vacation with his family.

In a country where Freudian therapy and brooding are rooted in the popular culture, Kicillof, the son of a psychiatrist and a psychologist, accused his opponents of generating “psychosis.” Born to middle-class parents who prized intellectual achievement, Kicillof grew up in Recoleta, an elegant neighborhood in Buenos Aires. His father committed suicide when  Kicillof was 22, according to Burgo’s book. Kicillof’s mother is a prominent psychologist. Before he became a fixture of Argentina’s political establishment, Kicillof gained notoriety as a leader of an anti-establishment student organisation at the University of Buenos Aires, where he went on to earn his doctorate and lecture against orthodox economic theories as professor.

Kicillof also gained a reputation for being obsessed with numbers in some industries. After he began requesting spreadsheets from oil companies with details of wells, investments and production, the news media here reported that industry executives began calling him Excel, after the Microsoft spreadsheet application. While he is sometimes criticised for his leftist views by Kirchner’s opponents, he has also led a shift in the government’s policies as Argentina seeks to regain access to global financial markets, following the country’s default on its foreign debt in 2002 during a severe economic crisis.

For instance, with Kicillof at the helm of the economy ministry, Argentina has begun discussions with Repsol over compensation for the seizure of its shares in YPF. Argentina is also trying to appease the International Monetary Fund, which censured the country in 2013 over the accuracy of its economic statistics, by releasing a revised inflation index next month. In an attempt to obtain a $3 billion loan from the World Bank, Argentina has also settled disputes through the bank’s arbitration body with five companies claiming a total of more than $650 million. This month, Kicillof traveled to France to discuss with creditors the repayment of Argentina’s estimated $10 billion debt. But as Argentina tries to halt a plunge in the central bank’s international reserves, Kicillof’s critics have also grown more outspoken, arguing that he helped create some of the problems he is now trying to solve.

Some people believe Kicillof is out of his depth in government. Héctor Zumárraga, 68, a labor rights lawyer, said: “He’s not up to the job. He doesn’t understand that it’s not enough to know just economic theory, and we’re seeing proof of that now.”

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