Martín Guzmán, the unalterable minister

Argentina's Minister of Economy, Martín Guzmán, photographed in his office on March 11th.Agustin Marcarian / Reuters

Alberto Fernández assumed the presidency of Argentina on December 8, 2019. Since then, many things have changed. The pandemic (Buenos Aires has been quarantined for 144 days) finished devastating an economy in a critical situation, the country officially suspended payments in May, more than 300,000 jobs were lost in one quarter and the collective nervous system was becoming frizzy. The only thing unalterable is Martín Guzmán. The Minister of Economy has managed to restructure the foreign private debt without ceasing to speak in a monotone tone, without ever raising his voice, without uttering a single phrase unrelated to his technical arguments. Always impassive. Guzmán now faces a difficult negotiation with the International Monetary Fund. "That will take months, not weeks." At least half a year, according to his calculations.

Reaching an agreement with private creditors, led by Black Rock, the world's largest investment fund, took five months. Earlier this month the conversations seemed broken. Suddenly they resumed, everything accelerated and during the night of August 3-4 the pact was reached. Martín Guzmán appeared before the press in the morning, without having slept. No one could notice it. No signs of tiredness, no wrinkles, no jokes. The same monotonous little voice and the same arguments as always. He admits that the process was very difficult: "The pandemic locked us in and we had to simultaneously negotiate with some thirty funds through Zoom." Day after day for months, sitting in front of the screen, until the fateful night. Nor should it have been easy for creditors to face that unchanging person, immune to boredom, over and over again.

Interviewing Martín Guzmán is, at times, like chatting with Siri, Apple's computer assistant. The same exactitude, the same absence of emotion. On Monday, several foreign media correspondents ( Folha de Sao Paulo , BBC , Al Jazeera , TV3 and EL PAÍS) met with the minister to discuss the economic outlook. To the question of how long the severe limitations on foreign exchange would last, Guzmán offered (the transcription is exact) the following answer: “Before we must calm the economy (…) We need a consistent scheme of macroeconomic policies that puts the recovery of the activity in the center, and that it does so within a sequence that converges in a horizon of ordered accounts ”. It is a simple example.

Martín Guzmán was born in La Plata, capital of the province of Buenos Aires, on October 12, 1982. He is 37 years old. He received a degree in Economics and a master's degree from La Plata, a doctorate from Brown University (Rhode Island), and a post-doctorate from Columbia University (New York) under the tutelage of Nobel Prize winner Joseph Stiglitz. He is close friends with Stiglitz and his wife, journalist and scholar Anya Schiffrin, and is single. “His private life is what we see, he studies and works, there is no more”, comments a close collaborator. But he has his hobbies. As a young man he won local tennis championships and is devoted to Gimnasia y Esgrima, a football club that has two peculiar characteristics: it is the oldest in Argentina and one of the few that never won a professional championship.

The man who has one of the most difficult jobs in the world (Argentina's economic difficulties are proverbial) is now preparing to negotiate with the IMF, to which $ 44 billion is owed. It wants to do so "under completely different premises from those on which the previous program was based," when in 2018 the Washington-based institution awarded Argentina the highest credit in its history. “We will start the process in late August or early September,” he says, “and it will take months, not weeks. We hope to reach an agreement in the first months of 2021 ”.

Martín Guzmán stresses that the previous program with the IMF “was done in a short time, three weeks, and with little public debate. The program was seen by many as a political loan, that is, as support for the previous government [of the liberal Mauricio Macri] in the year prior to the presidential elections. And it continues: “There was no perceived legitimacy on the premises on which that program was based, fiscal contraction together with monetary contraction in a context of recession. That led to a drop in aggregate demand and exacerbated the recession. The monetary contraction did not stabilize prices, but inflation persisted and there was a fall in the monetary base in real terms. Which made credit more expensive: the effective rate came to exceed 80% per year ”.

The catastrophe that followed is known. The peso has suffered a devaluation close to 80% and in 2020, under the mark of the pandemic, the contraction of the economy will not be less than 10%. In a catastrophic context, President Alberto Fernández told the Financial Times that "an economic plan" was not necessary. The impassive minister specifies that it is a semantic mistake and that "things are planned, there is a strategy behind the economic policy scheme." The strategic keys will figure in the budget for 2021, which will be presented next month to Congress.

Guzmán insists time and again on the need to "reassure" the economy. “In the immediate term, it will be essential to boost the domestic market because there are a large number of idle productive resources. At the same time, the conditions must be in place for exports to grow as well, because otherwise the recovery will be short-lived, something common in Argentine history: the domestic market grows and demands foreign exchange, and soon afterwards problems appear in the balance of payments because the consumption of foreign currency is not accompanied by the production of foreign currency, that is, exports ”.

At the moment, in recession, with tax collection collapsed due to the pandemic, with a sharp increase in spending and without access to external credits due to default , Argentina finances itself by printing bills 24 hours a day: 1.3 trillion pesos (about 18,000 million dollars at the official exchange rate) so far this year. "This is an emergency situation, there was no alternative," says Guzmán. Until now, a good part of this monetary issue has been absorbed by the market through the purchase of debt in pesos. "We monitor this issue very closely," says the minister, "and we make sure that the demand for assets is kept under control so as not to suffer destabilizing effects."