Mauricio Macri won the Argentinian presidency in a run-off on Sunday, beating his rival Daniel Scioli by 51.5% to 48.5%. Currently the mayor of Buenos Aires, Macri has vowed to fix the country’s ailing economy and liberalize the currency from government control.
Macri replaces Cristina Fernandez whose protectionist policies and rivalry with foreign bondholders took the economy downhill. Addressing his supporters, Macri has promised to reduce the state’s role in the economy and embrace more pro-business policies.
More than anything else, he has vowed to shift Argentina’s foreign policy away from close relations with the anti-American governments in Venezuela and Iran and towards better ties with the USA. Wall Street also hopes that he will settle with those bondholders who have sued the country in the international courts seeking payments.
Throughout his campaign, Macri emphasized his plans to tackle crime and fight corruption. “Capital controls are a mistake. We will fix the fact that the government gives no information, there is no access to statistics and the central bank is not independent,” Macri reportedly told a press conference.
The president-elect has already urged some central bank officials to step aside so his government can nominate a new team. Analysts say he should immediately end a decade of free-spending populism to reverse the country’s economic fortunes.
Over the past few months, he has repeatedly called for the scrapping of currency controls and making it much easier for Argentines to change their local pesos into U.S. dollars. Currency and capital controls are what scares foreign investors in Argentina, because these controls prevent them from taking their profits out of the country.
Thanks to a decade of protectionist policies, Argentina’s economy is in the doldrums, with inflation running at more than 20 per cent. Depending on natural resources to boost the economy is Argentina’s weakness while a highly literate population is its advantage.
Today the biggest problem the country facing is that it is almost excluded from borrowing on the international capital markets. That is why the country is often seen trying to stop hard currency seeping out of its borders. Overcoming this hurdle is really a challenging task for Macri.
Twenty-four-years ago, he was kidnapped. Reports say he was released only after his family paid millions of dollars in ransom. The kidnappers were a gang of corrupt policemen.