Argentina: Political Change and the G20 Presidency

Richard Lapper

Okay, well, good afternoon. Welcome to Chatham House for an event that we are entitling Political Change and the G20 Presidency for Argentina. I’m very happy to welcome here today Marcos Peña, who is the Chief of Staff of President Mauricio Macri, one of the key members of President Macri’s team, and in a minute, Marcos is going to outline his vision of Argentina. We’re then going to take questions. I’m going to ask some questions first, then we’re going to take questions, from the audience, and we’re going to try and wrap this up by 2 o’clock.

So, let me first go through one or two small housekeeping matters. First, this is a on the record meeting, unusually, for Chatham House. It’s being recorded and livestreamed. You can tweet comments, if you’d like to, but that does mean you’ll need to leave your phones on. So, we’d ask you to turn your phones to silent mode. So, I think that – and that’s it at the moment, in terms of those details. So, if I can ask Marcos now to talk to us for, I think we’re expecting about 15/20 minutes, Marcos, and then we’ll ask some more questions.

Minister Marcos Peña

Okay, thank you. Good afternoon, everybody. Thank you, Richard, for the presentation. It’s really an honour to be here in Chatham House. Very happy to be able to give this presentation in the middle of a very political trip for us, a trip where we are sending a clear message of our intention to work together with the United Kingdom in a stronger bilateral relationships in the framework of an intelligent, noble insertion that we are leading in our country for the past two and a half years.

But first I want to give a little bit of a – tell you the story of our change, tell you a story of our Government in our country at this moment, tell you a little bit about how we ended up in the Presidency of the G20 and how we think we can contribute from that role in this moment of global affairs. And then, we can go to the conversation and the questions, which is, I think, always the richest moment.

We say that for us what happened in Argentina is the story of change that was born in a rebellion of Argentines against decades of failures, decades of division, decades of frustration, of a country that never, in the past decades, was able to live up to expectancies, live up to possibilities that it had inside. First of all, because of the capacitabilities – capabilities of our people, but also because we lacked the organisation, the institutions and stability for us to grow and to long – look at a long-term process of development.

In the Year 2015, after a traumatic, in our view, and for many Argentines, populous experience and against all odds, people elected us, elected President Macri, to lead that change and to lead that way towards the future, based on the idea that we needed to build institutions, build a solid and real democracy where not only the freedoms would be guaranteed, but also, independent justice, political dialogue, a strong congress, free press, the idea that institutions were there to protect citizens and not a mere instrument of concentration of power of that who obtained the power.

The idea of building a pluralistic, open society that didn’t intend to impose or have a revenge against the past Government, but that would be able to look forward towards the potentialities of the road we could walk together with. The idea also, of building a strong economy that would reduce, in time, its dependence of external finance, that could show a path, not of short-term growth, but of 20 years of growth, maybe not so dramatically as in other moments, with high rates of growth and then a high recession, but a constant moderate, but permanent growth, based more in investment, based more in integrating to global economy, based on the capabilities of leaders, in entrepreneurs or businessmen, or exchange with the world that could drive a more competitive economy. The idea also, that we could do those transformations and that change, taking care of the more vulnerable parts of our society. We reached power with 32% of poverty in our country and the main criteria, the main objective our President has put publically to the society by which he wants to be evaluated, is how much we were able to lead the path to a reduction of poverty and to transform our education system, our health system, our taking care of the more vulnerable parts of our country, the social and competitive infrastructure, also, that was needed.

That change that also had to tackle the fight against drug trafficking that has grown a lot in our country, but also, that had to have an intelligent global insertion, as we said before. We think that Argentina has only a future possible if it integrates to the world economy, if it plays a protagonic role in this time that we live in and that can combine believing in values, believing in multilateralism, believing in peace, believing in dialogue, believing in integration, believing in rejecting terrorism and drug trafficking and all the complicated things that obviously come, also, with the globalisation. But also, the possibility of being pragmatic, in terms of having good relationships with every country, opening up intelligently to being able to trade and to generate investment, tourism and co-operation, first, with the countries of our region, but also, with all the main countries of the world and also, with different economies of the world. We have been able, in that sense, to open markets for – in a difficult moment, understanding that at this time, when we arrived with this idea, a lot of countries were debating going the other way around. But we are confident and understand and believe that each country has its own perspective, its own history and its own starting point and our starting point is one of the closed – most closed economies in the world.

We think also, that global insertion will permit us to bring more solid structure to our reforms. That’s why, from the first day, we worked to enter OECD, a process that is advanced and hopefully, this year, will be completed, but we are working in the reforms of OECD, as we were already members, especially in transparency, anticorruption, public statistics and all that can help build more confidence in our system. We led the idea of being candidates for G20. We were also – and I will talk about that now. We also worked for being hosts for the WTO meeting in December, when a lot of people said, “Now be hosts of WTO meeting, it doesn’t sound a good moment.” And we said, “Yes, it’s a good moment,” because in all of those roles, we believe we can play a role as an honest broker, as a country that has good relationships with everybody and as our G20 claim says, “We can send a message of the importance of building consensus for a fair and sustainable development.” It’s the first G20 that’s hosted in South America and we believe that that makes us committed to make a different perspective from G20s led in other parts of the world, because we have different realities, we have different situations, but we also have a lot of positive energy to incorporate at this moment, where a lot of anxiety and doubt comes with the volatility of the change in the global scenario.

We think that the three main points of agenda, where we have been working for the past six months, in that sense, are priorities – that are priorities for that fair and sustainable development we are talking about. One: the development of infrastructure and especially the financing for infrastructure, something that our countries need a lot and also, with the climate change debate, becomes something that’s very actual and necessary, very urgent. The debate about jobs and education in this 21^st Century, we believe that’s another very important debate, ‘cause if we don’t debate about education, about jobs, then probably, we’re not debating about the things that most people in the world today are afraid about. And they fear about all the technology changes and how they will affect their lives and we think it’s very important that global debates be about local problems and real problems. And third: the debate about food and the debate about trade about food and all the organisation also, affected by climate change, by technological changes and the debates in trade.

So, to summarise, we believe that Argentina today can bring, not lessons, not a will of teaching the world how to do things, as we have done in the past. Sometimes when we participated in global forums with that idea, but neither that nor being without confidence about what we can show that it’s basically, two things: an example of the cost of bad policy, the cost of corruption, of populism, of Governments that take power for themselves and not to serve people. And it’s not only the past Government, it’s the lesson we have learned in the past very strongly and also the importance of hope, the importance of understanding that change is not something that is something you can resign to. It’s something that’s very important that political leadership understand, that peaceful democratic change is possible. It’s possible and necessary and that all the changes we’re facing as a world, bring us more opportunities for pushing change. But we have to be very conscious and listen and hear our people to understand how those changes that we’re living today adapt to political demands. And now surely, we’ll talk about the difficulties, the challenges we’re facing, but we want to be very clear about the future for Argentina. We are confident that this change has come to stay. That this time is different than the past, but not because Mauricio Macri is responsible for that, or for the Cambiemos Party or for our team, but because this change is led and owned by the people of Argentina. They don’t want to go back to any past and they are very mature in confronting the challenges we are living, after many years of failure and deception.

So, again, thank you again for this invitation. For us, it’s very important to be able to transmit this message and to answer the questions in dialogue and to show that this road of change in Argentina is going steady effect. Thank you very much [applause].

Richard Lapper

So, Marcos, when I was in Buenos Aires in January, everything seemed very calm, indeed. I mean, you were very optimistic. I came away with a very optimistic impression. Clearly, there were challenges out there and then, all of a sudden, a couple of months ago, we were into this period of financial turbulence, with the peso falling like a stone, local investors, in particular, taking funds out of peso – some – looking for dollars. How much of a surprise was that sudden bout of financial instability for you?

Minister Marcos Peña

Well, first, I think that we always were very conscious that until we reach our fiscal balance in a more reduced dependence on external finance, we would be vulnerable to changes in global scenarios and changes, local changes that could affect confidence. So, conscious we were of those risks that in the first days of January, we went to the market and obtained most of the financing we needed for this year, at great rates and a great timing, we think. And so conscious we are of that vulnerability that we led a very important decision to go prevently to the IMF, because we know that that vulnerability exists and we know that the combination of external factors and internal factors reduced one level, the confidence there was in our country, and we always understood that we were going through a narrow path. A path where, on one side, we had confidence of our citizens on the future and of the hope of the road we are going through and the other side, the confidence of the markets. And the idea, not so much a confidence if – or not only if our Government was going to be able to lead these policies, but also, how much the country had changed, really, and at times where there’s more volatility and a more complex emerging markets situation, as several people told us in the past weeks, you are not only defending or discussing your Government, but your past 70 years.

But, again, we think and we said that during the – in the currency crisis, that we had the tools and we had the lessons learned to prevent that from transforming to a structural crisis and we are confident in that sense.

Richard Lapper

So, you’ve been obliged to go to the International Monetary Fund, which must – you must’ve been reluctant to do, given the symbolism of that in Argentina. You’ve been – you are obliged, I think, to make an additional fiscal adjustment. You’ve interest rates at 40%. That mix of policies looks to be hard to reconcile with continuing optimism on the growth front. How do you balance all those competing demands? I mean, can you give us an idea, maybe, first of all, pick that apart a bit, give us an idea, first of all, about the scale of the fiscal adjustment that the Government is going to have to make now, over and above what it might’ve had to – what it was planning to do anyway. Is gradualism at risk in that sense?

Minister Marcos Peña

Well, first, I think it’s important to understand what gradualism is, no? Gradualism is the path we have between the idea of correcting or adjusting our economy and from one day to the other, some – as some people think is necessary, or the idea of not doing anything and ending up in a structural crisis or in Venezuela’s path. In the middle, there’s not a hard science, no, it’s a combination of things, where what we have done is to go in the path of fiscal balance, protecting growth and protecting the most vulnerable parts of our society, and we believe that that structure is maintaining this step that we have lowered, in terms of confidence. What is going to have to do as a Government, what we have to do is go faster in that convergence and I think in – when the agreement with the IMF is closed, we will see there a roadmap, in terms of the speed and in terms of the restrictions we’ll have, especially for the 2018 budget.

What we are very clear about is that this agreement is something that we take full responsibility for. The policy is defined by Argentina and the rhythm about, or the restrictions we’ll have, in any case, if it wasn’t with the IMF, it would be with the markets, in terms of adapting to a new scenario of reality of novel markets and of the situation of Argentina. And we are working to find an agreement in our economic programme that can preserve growth for next year. We think that that’s very important for the basis of this programme and we think it’s very possible.

So, when you see it, what we have to do, in terms of accelerating that fiscal balance path, it’s important to see what we already have done. By the end of this year, we have – we would have – we will have reduced public expenditure on GDP from 42% to 38% and plus that two points less of taxes and we did that with growth and there’s not too many examples in the past of that accomplishment, and basically, we believe it’s a combination of factors. It’s not one factor that reduces everything, but it’s a combination of things about what the Government, National Government does and how it does it, what the provincial Governments do and how they do it and how the cities work and what they do. We have also voted, in December, a very important fiscal responsibility law that gives a framework to work with the provinces that’s very important, and a tax reform. And so, we think it’s perfectly compatible the idea of this new path we have to walk through, with the idea of growing and keeping up the hope of the future of the country.

Richard Lapper

So, just to go – just to look at that again, 42% when you came into office, public spending in Argentina, 42% of GDP. By the end of this year it’ll be down to 38%.

Minister Marcos Peña

Yes.

Richard Lapper

If – that’s presuming that you make the 2.5% primary deficit target…

Minister Marcos Peña

Yeah, yeah.

Richard Lapper

…for this year.

Minister Marcos Peña

We’re pretty sure we’re going to beat it.

Richard Lapper

And you’re going – you’re sure you going to do that?

Minister Marcos Peña

Yes, yes.

Richard Lapper

And is that – does that take into account any additional savings, cuts you’ll make as a result of the fund’s – agreement with the fund?

Minister Marcos Peña

Well, we prefer to wait for the fund agreement to be signed and then, we’ll able to offer a very clear roadmap in the future. But we have been very respectful of the negotiations and conversations, so we think it’s better to show it altogether.

Richard Lapper

How politically difficult will it be to execute some of these fiscal measures? I mean, last week, quite markedly, you lost a vote in the Congress and this alliance between your own party, an alliance, and the Justicialist Peronist Party, looked to be a bit fragile. You know, several Peronist Senators voted against the Government. I mean, what are you doing to try to rebuild, stitch back that alliance back together?

Minister Marcos Peña

Well, something that’s important of political context, maybe, for those that are not so acquainted with Argentine politics, we are the first Government in a century to govern with minority in both houses. And all that we have been accomplishing has been through dialogue, through consensus and passing very important laws and I think that’s something that sometimes is understated, but I think it’s very important. The same day, the House of Representatives voted this tariff law that we vetoed. They voted a new capital markets law and a new antitrust law, that in terms of institutional building, were much more important than the debate, we believe, about the tariffs, that they knew at the end of the game that we would veto. The same day, the Senate voted the same law. They voted the Executive degree to come into law of democratisation of the Argentine economy, modifying 170 laws that were basically, of circulating investment and job creation. So, it’s a country of contradictions, in a way.

I think it’s a good news we – nobody has a majority, because we’re all forced to sit down and get together and in one point, disagreement with IMF, I think will put white over black or black over white, in terms of understanding of restrictions. And what we want to debate and what we are talking with the opposition, because we don’t have an alliance, they are our opposition, and we respect their role as opposition, but we have very good possibilities of working together in a lot of things, is we have to debate our priorities. We have a great opportunity to understand how we can organise better, as a country, to do what we have to do in an agency level and in that sense, as always, we’re optimistic. We believe that the consens – the necessary consensus are possible and will be reflected in our budget for 2019. That doesn’t meant there will be conflicts or debates or manifestations, or – but I think that’s a broader concept than any democracy today understands that the political reality is complex. It’s difficult. It’s challenging.

Richard Lapper

Does it change the electoral outlook for 2019?

Minister Marcos Peña

Well, I think those that thought that a couple of months ago, the 2019 election almost even wasn’t going to exist. They were going to give us, by decree, the four more years, or those that think now that it’s going to be very difficult to win it, are exaggerating a bit in both ends. We never underestimate an election, less in the 21st Century, less in Argentina. We strongly believe that there are fundamentals that lead us to think that the majority of the population want to continue changing and we have a lot of information that sense that the majority of population never wants to go back to where we were. Said that, we’re going to have to take it as an election, as we have done, all the elections since we started doing politics 17 years, as an election where we start with zero votes and where we’re going to work, like we are already working with our Cambiemos organisation in every part of the country, going door-by-door. The President, to all his team, we go door-by-door, and we talk to people. We listen and we understand that they are the bosses, not us. So, I think that any Politician that today relaxes and says, “Oh, I already have this amount of votes and everything is easy,” I think probably will have a bad surprise in the future.

Richard Lapper

I’ve got some other questions, but I think I’m going to open up the meeting to questions from the floor at this point. There are some microphones that are coming around, so Christina, perhaps we’ll – first question down here.

Cristina Cortes

Thank you. Cristina Cortes from Canning House. I wanted to go back to G20 for a moment and ask about Argentina’s role within that context. Just thinking in terms of what you’ve been saying about Argentina promoting free trade and going very much along that path, you yourself said just now that a lot of countries are debating going in the other direction. So, I’m wondering what influence or what influence you feel you can bring to bear to try and take the whole group still in the free trade direction? I’m particularly also interested in how you see the bilateral work between the UK and Argentina working to support that agenda.

Minister Marcos Peña

Okay, I think it’s very important to clarify that the role of G20 is not a role of – we weren’t elected to lead the world, but we were elected to lead the conversations during one year of the group of countries and all the support groups, the interest groups that participate in G20. And that’s why we emphasise so much on the idea of honest brokers, because the WTO meeting in December showed that it’s almost as important today as how we debate things as to what are the results of those debates? And first, the idea of debating in search of consensus, not in search of conflict, search of debating, understanding that everybody plays a role and has a legitimacy in their positions, because they defend their national interest and their perspective and that each perspective is different and respectable in that sense.

The idea that we believe that when you see what has happened in the past months in the G20 meetings, is that probably, when you go to the concrete things, in many things, the world has agreed and probably the narrowness of the debate today is much stronger than 50 years ago or 60 years ago. The problem is that sometimes the public debate stresses more on the differences and the symbolisms than in the concrete things. So, when you do an exercise and we do, we believe that, again, because before, eight years, the eight years in City Government, we also governed in minority, so we were very used to governing in minority, is to how to build those dynamics where you start first, on putting – celebrating the common ground and then, trying to find a road for that separate ground and for that conflict. And every country in the G20 has participated in almost every meeting in the G20. So, in a way that’ a message that everybody’s giving in – about the role of multilateralism, the role of these institutions and this debate. The same thing happened with WTO.

And I think it’s almost maybe a contribution we can do to say you can defend the perspective without offending anybody. We have excellent relations with the current US administration, as we had excellent relations with the past Government of the United States. We don’t – we can’t, we shouldn’t, be the ones that mould domestic or international policy of another country. We have to be respectful of our perspective and respectful of the mechanism to find common ground and so, in that sense, with Britain, we think – we have talked yesterday with several of the Secretaries. We are really happy at the level of common ground and enthusiasm we find in working together in one part of the agenda, that I think that is today is a pretty much a big consensus, for example, the fight against terrorism, the fight against drug trafficking, of illegal financing, of corruption, or different actives, the need to work in international co-operation or development and the idea of promoting investment. But also, in the common ground of our two countries that understanding that we have a conflict that we have to resolve, but we can still work together in a whole range of agenda and again, give an example in that sense that conflicts shouldn’t paralyse dialogue.

Richard Lapper

More questions from the floor? Alright, the chap there.

Maximiliano Mendez-Parra

Yes, Maximiliano Mendez-Parra from the Overseas Development Institute. Argentina has shown – I mean, has exercised some regional leadership, specifically in the last years, in the negotiation with the EU in its Free Trade Agreement. That negotiation window is, sort of, closing for issues in the region, particularly the elections in Brazil, but also, the issues in the EU and the negotiation with the EU plays a key role in the, sort of, the open strategy of Argentina, but also, in terms of building institutionality and also, in locking reforms. What is the, sort of, alternative that Argentina has in case that actually, you don’t agree on time and eventually, if you agree, what’s next?

Minister Marcos Peña

Well, it’s related to what we talked before about an intelligence insertion policy to the world, that is meaning, talk to everybody and go as further as you can with everybody, in terms of, in some cases, we open markets from some products, in some cases, we can talk about some specific agreements, in some cases, we can open trade negotiations, in some cases, we can talk about strategic alliances. The first thing we think is that we have to take ego out of the – that idea. Many times, the idea is don’t try to negotiate if you don’t know you’re going to be successful, because it’s going to look like a failure. We don’t think that. We think it’s already good for us, in the minimal range, to be negotiating, to be thinking about it, to be debating about it, because obviously, you don’t manage all the variables. Some of the variables don’t depend on you, because you have partners, because you have realities in other countries. Most of the Western leaders that were in office, when we arrived, are – have changed and that’s a challenge, because you built relations and now you have to build relations with others. But said that, we are still confident that we can seize this window of the EU-Mercosur Agreement, we think we have advanced in tough negotiation and aspects and we think we still are in condition to close the deal, and President Macri is putting all his relationships, his capital and his will to try to obtain that.

Meanwhile, we are negotiating, or opening negotiations with Japan and Korea, for example, as Mercosur, we have been talking with the Pacific Alliance or with Chile, in terms of what things we can do, in terms of complementary agreements to advance more. We are working, as I said, with African countries, Asian countries, Latin American countries. With North America, where we advanced, for example, in the United States with the SGP modification, where we re-entered and that permits us to advance. Understanding, at the same time, that we have to prepare our private sector for those opportunities, because we have been, during too much time, used to the idea of a closed economy and non-competitive economy and a defensive economy and so, that’s a transformation that sometimes, in the day-by-day, seems a lot of time, but for those economic decisions, two and a half years is a very short time, no? And so, that will be, I think, the first basis and obviously, when the elections in Brazil occur and we have a new Government in Brazil, that will be also, a possibility to deepen the relationship between each other.

Jimena Blanco

Hi, Jimena Blanco from Verisk Maplecroft. You were just touching upon, very briefly, on the change in Government in Brazil, there’s lots of elections in Latin America. I wanted to know a bit more, what do you think are the risks and the opportunities for Argentina’s role in the region, more broadly, going forward, not just under this administration, but as a country and as state policy?

Minister Marcos Peña

Well, I think that the important first answer is how we vision our role in the region, no? And we don’t believe too much and we always were very clear in that sense, in the idea of an objective of leading the region as an objective in itself. What we believe in is the possibil – a little bit more humbly, is at least to offer an example to other countries of how we can go through a democratic and peaceful development road and institution building road. We think that’s a contribution and that’s also a contribution that we can make, and we have made, to be very clear about our stance on values, as in human rights or in democracy, in the Venezuelan case. And the possibility of working and in dialogue with the countries of the region, especially with the Lima Group, in generating a common policy, in that sense, understanding the restrictions that the regional system and the global system has, and in front of a dictatorship, in this case.

I think, again, I said before, politics in this time we live in is probably going to change and continue changing every time more, because society has changed more than its institutions. So, there’s a tension there that still hasn’t been, sometimes, and we believe, recognised, and much less addressed, in terms of the importance of representation, when you have democratic institutions that were designed for other types of societies 100 and 200 years ago. So, that stress or that challenge makes a big challenge for all the political systems, particularly in our region, where we’re not used to decades and decades of stability and democracy, yeah. So – but when you see the results of several elections that already have been, we think that there have been peaceful elections, they’ve been free elections, that renovate the institutional strength, so that’s also good news.

Richard Lapper

At the back.

Toby Raymond

I’m Toby Raymond from Al Jazeera. You said that Argentina defines their policies, in terms of the agreement with the IMF. I don’t know if I understood that correctly?

Minister Marcos Peña

No.

Toby Raymond

Okay, I thought – okay.

Minister Marcos Peña

No, no, no, what I say is, we define our policies, in terms of our full sovereignty and we don’t believe that IMF was going to define our policy, no.

Toby Raymond

But in terms – I mean, the IMF has changed, but it hasn’t changed that much, there will be some demands that, you know, they might not agree with Argentina and as much as they like the Government, are you prepared to pay the social and political cost?

Minister Marcos Peña

Well, the first thing that we believe is that when you go to ask for a loan, you’re the responsible for asking for a loan. So, what you have to do is, do everything you can and that’s what we’re doing to reduce its position to getting loans. And first, if you want to have more strength or less dependence, it’s good if you manage your affairs in a way that you have more sustainability and strength.

Second, we don’t believe that the conversation with the IMF or the same with the private markets are showing an incompletion or a hostile stance against the Argentine people. I think everybody is understanding this path of change and the need to do sustainable things in our economy, in our social structure, in our political system and they have been expressing themselves in that way. So, we are very thankful for the support we’re receiving from all the major economies in the world, in terms of this programme we are doing and this huge challenge of normalising a country after too many years of destruction of institutions, corruption and the resultant poverty. So, we are very confident in that sense that we are going to maintain a policy that takes care of the most needy in our society, that takes care of the more vulnerable parts of our society, that puts a priority on growth and the idea of better wellbeing for the people and that also fights against those things that the past Government wasn’t able to do or didn’t want to do. That’s, for example, the problem of drug trafficking in our country.

So, we think that when you have a Government that is decent, that is transparent, that is serving its people, trying to do the best thing they can do, the results are always better than when you have the country.

Karen Strother

Hi, it’s Karen Strother from Reuters. I was just wondering, on the IMF programme, could you give me a few more details? When yesterday, the IMF said, “Good progress is being made,” are you expecting to reach a deal in the next weeks, within June, or when can we expect that?

Minister Marcos Peña

I…

Karen Strother

What’s the size going to be and what conditions? Thanks.

Minister Marcos Peña

I’d love to answer that question, but you know I can’t, so I won’t give you more details. I just use the words of the IMF that we’re doing good progress and as soon as we have the agreement, it will be communicated, with all the details.

Karen Strother

Could you give me a sense of what you – where you think your currency is at the moment, and do you think it’s in a stable place?

Minister Marcos Peña

We think we have a floating currency system and the bank, a central bank that is in full capabilities of defining the monetary policy and in general, the possibility of the stability and growth of the curr…

David Franco

Thank you very much, Marcos, for your kind words. This is David Franco from Banco Santander. Obviously, all these countries, in Latin America, will be experiencing quite a lot of tension, in terms of the financing needs, given that the FED and the ECB eventually, will normalise rates, and we’re still struggling with low productivity and lower growth, as opposed to the previous years. Mexico is a country that has put in place reforms, but nevertheless, it’s back to the theme of implementation. So, if you can walk us through the most important reform that Argentina needs, in order to reduce its vulnerabilities, and what do you see are the main challenges, with the political landscape that you’re facing, as there was a lot of comments, in terms of the elections in more than one year. So, that will be great, thank you.

Minister Marcos Peña

Thank you. I would say two different parts. One part is our microeconomic policy and the need for reducing our vulnerability. I think the IMF agreement tackles part of that question and gives more certainty for the next couple of years, in terms of our – reducing our vulnerability to the volatility of the markets. And also, because it – I think the idea we agree on is to – well, could a piece of paper, with a more clear idea of the full economic scenario and the monetary policy, the fiscal policy and the expectancy of, or the consistency of those policies, no? I think that’s one part and that helps to have the umbrella in case the storms continue and get deeper and I think, again, with time, our decision to go to the IMF will be seen as a very important preventive measure for a more complex global context.

When you think about the programme of Government, we have had an approach of, there’s so much we have to do, that we have had an approach of a very broad agenda. When you even find it in the web, that’s – there is our programme of Government and over 100 objectives that we are advancing in simultaneous order, understanding that the most important part of all is not – is to maintain the rhythm and to advance and to try to avoid being stuck in one point and in a winner take all debate about one aspect. The most crucial laws, in terms of normalising our economy, were already passed and what we need now is, the new budget for next year, but we have time for that debate. But all other policy might have some laws that could accelerate things, but are not crucial, in terms of the sustainability of the programme and in terms of these reforms, which I would say, in three big tracks, one track of how to make our economy more competitive, and we are doing a lot, in terms of our methodology there, of productivity tables and debates, where unions and private sector and Government participate in a very concrete, pragmatic agenda, to try to avoid the big ideological debates and go to automotive sector, to poultry sector or to the sector of steel or any other sector in the economy.

And it’s very interesting, presently, it’s most of those meetings with a very big table, open agenda, and everybody of the Governments that participates in this – in those matters, as in the table, provincial Governments, when it’s something related to provinces, unions and private sector and it’s really a very interesting methodology, because things move and things go in a very good way. And that is complemented with more structural policies, obviously, in terms of our infrastructure plan. We have – doing a very ambitious infrastructure plan, that will continue next year, especially with more impulse on the PVB that we have implemented this year. And the good things about implementing very late things is that you can learn from all the lessons from other countries, so we are doing that, and that’s going to continue and that’s very important as a factor of competitivity. The idea of working with unions, in terms of getting better capacitation and working with the education system, in that sense, is that something that’s also, for us, more important than the idea of a labour reform. Again, big titles that afterwards explain, sometimes, a little and that today, are theoretical. We think it’s more of the movement of the changes than one stop and go change.

Obviously, working in democratisation and helping in facilitate investment, in facilitating entrepreneurs and the possibility of company creating, today you can create a company in 24 hours online and two years ago, you had to do 70 some days of work and maybe you could obtain a company. Opening markets, as I said before, and we can continue, but that’s one idea. But the biggest challenges for the society, in our public debate, is the idea of understanding something that for the rest of the world is pretty obvious, but that it’s the private sector that’s going to create the jobs in the – in our future, and not the public sector, as in – sometimes in our past. In the last years, of the past Government, one out of four jobs that was created was private sector. Now three out of four jobs is private sector. So, that has already changed and is working very well.

Another combo that’s very important is institutional reform and the importance of, again, not doing a reform process, based on the confidence that one person can bring, but really change the institution from public statistics, justice reform, the importance of, as we said before, drug trafficking or fight against terrorism, the possibility of working and in permanent openness, and freedom of information, liberty of press, all that comes with institution building. And third, the social policy, and the importance of three out of four out of pesos of the public budget goes to social investment. It’s the largest proportion in our history and that’s basically, the objective of strengthening our safety net for the more vulnerable sectors, while we destroy the culture of clientelism and corruption and beside that and work on liberating their capabilities, strengthening their capacities and integrating them to the economic system.

Again, some of the processes are going to be more long-term, some are going to be more short-term, but the combination of all is the importance of rhythm and rhythm and not stopping and stopping. And even, again, as I said, in the days that we were more complicated with some things, some reform passed or some new infrastructure project was inaugurated or something, some new market was opened, so we designed the system, so we – it never stops.

Francisco Ambrogi

Thank you. This is Francisco Ambrogi from Veracity Worldwide. There have been some protests in the country last week regarding the tariff veto by President Macri. How do you think the Government should, kind of, recompose this – the proc – the situation with the opposition and how this will affect investments in energy, especially in Mendoza and Neuquén with [inaudible – 48:41]?

Minister Marcos Peña

Well, first, that Argentina, for all of you that you have known, Buenos Aires, maybe, you will see that we are one of the few cities in the world where, in the morning news, you have the weather and you have the map of different road protests. It’s part of our culture. We are a contestatory country, so we don’t get too altered about that. In that sense that we feel that it’s absolutely impossible in probably any democracy, but especially in Argentina democracy, to think that everybody’s going to agree in everything and that there won’t be protests.

Given that context, you also have to understand that the ex-President, Cristina Kirchner and her followers never acknowledged even the defeat in the election, no? And she was the first President not to trespass their attributes of power to another President. So, from the first day, the same people, mostly, changed the subject, but they always tried to find an excuse to show popular discontent. But in no way we think that that reflects reality in the streets today, where obviously, you can find people who can be more angry or more anguished or fearful or disappointed or happy or anything, but that doesn’t produce in social unrest of the idea of a country that will be paralysed by protests. We don’t think so. Again, there’s probably – each country has its own way of processing these differences. We have a process that could imply that maybe we’ll have some strike, or we have some manifestation, or we have some protest, but in no way we think it compromises the peace in our society, the conviction of change of the majority of society and this ability for investment or for the future. And that’s why, also, we are very confident, very confident, as we were in 2014, when very few people believed in our confidence, in that matter, that next year change will win the election, change in this – in a deeper sense. Also, let’s say Cambiemos as the name of a coalition, because we are confident that the majority of society is convinced that even when it’s very difficult, we have to move forward.

Laurie Elston-Gee

Laurie Elston-Gee from The FTA. I was just wondering, as you build towards the G20 summit, what is worrying you most?

Minister Marcos Peña

Well, I think, for us, the main objective is to be able to maintain the spirit of dialogue and of participation as an honest broker that wants to push an agenda, but especially wants the success of the institution, you know, right now. When we enter the WTO meeting, one of our worries, obviously, is all these scenarios could be on the table, was that it could be the last WTO meeting in Buenos Aires. We don’t want it to be in history and the last meeting, and it was a pretty better meeting than many people expected. So, we hope that – again, not thinking of one meeting, the summit, at the end of the process, but of all 100s of meetings and dozens of meetings of different groups, that we can end this year, having made a contribution, in terms of a way of approaching the debate and the problems of the world.

Lucia Gamania

Oh, thank you. Hi, Lucia Gamania from [52:41 – inaudible] International. A bit in line with the what worries you most and going back to domestic politics and how the Economic Team has played before the previous four weeks, and after, and the changes we’ve seen in your team and your place as the person co-ordinating all those Ministers, what worries you most?

Minister Marcos Peña

Well, first, that sometimes we say if we had to isolate one factor, one factor to explain our history of failures as a country, we would resume it as culture of power, how we have thought about power in our country. ‘Cause there’s no other structural reason to fail, but our incapacity to think power, in terms of public service, in terms of transparency, in terms of teamwork, in terms of confidence and the other, in terms of honest dissent and tolerating pluralism as something that enriches us. We have a [mother tongue] tradition in our country. We have the tradition of thinking that we will have a saviour that will resolve the problems, which is sometimes a pathology, when you think that it never worked in the past. So, if it never worked, we understand that in a moment of fear you recur to what you know, so – but you have to be calm and think well, what you know has taken you nowhere, because it never succeeded that way.

In that context the whole debate about how we govern, how we organise our team, if we have too many Ministers or a few Ministers, if we have all the novel around the relationships, I think are hugely overestimated, hugely overestimated in a team, that as I see, day-by-day, led by our President, works as a team, works as a team that may have differences sometimes, but has no difference, and I mean a team, not only the Ministers of the Government, but Cambiemos as a coalition. We have unity and values of what we want for the country and how we think we can obtain that. That doesn’t mean that we can have differences on implementation, on rhythm, on styles, on different things, but that’s the structural thing that puts us together. And that’s why, sometimes it’s disappointing because we are used to, also, to the massacres inside Governments, not only in Argentina, I think it’s something that’s very common, finding the narrative to the secret plots of who’s fighting who behind the scenes. But believe us, at this time, it’s not like that. It’s not like that.

What we do believe, and we’ll think is a lesson learned from this situation, is that we have to be very careful about any signal that could commit or compromise the idea of independence of Central Bank, so we are all agreeing on that. We think that also, the fiscal challenge will require a more strong co-ordination of who is negotiating with the IMF at the same time, that is our Minister Dujovne and also, in that situation, I think – again, I don’t blame others for that. It’s part of our responsibility to be very clear in how we govern, because it’s very important for everybody abroad and for everybody in the country, that’s part of the transparency, that the role I play, as Chief of Cabinet, is something that was in our constitution since 94, but as many things that are in our constitution, in our laws, was never used as such.

So, if you see what we are doing as part of the [mother tongue], is doing what the President’s asking us, that is doing what the design of this – that institution was originally, that is a co-ordinator, in terms of a level between the Ministers and the President and they can work on the coherence of the full Government. But there’s no intention of replacing the Ministers in that sense, but to occupy my role, in that sense, and when we think that, again, as a general balance, also, the road we are working is an uncharted road. Nobody ever tried this combination of things that we are doing at this moment, in the conditions we are doing it, after the type of Government we did. And so, we are learning sometimes, in the path, trying to find how to correct, how to do things better, how to find the right balance between all the factors and all the challenges and we know we’re not afraid of saying that. Again, we are a museum of egomaniacs that are – that have said to the world that they were the saviours of the humanity and failed one-by-one. We’re trying to be humans, we’re trying to be Civil Servants that are trying to lead this desire of change.

Richard Lapper

Marcos, thank you very much. A great point to end on, dismissing the museum of egomaniacs. We – I’d like – I’m sure we’ve got many more questions. Let me just say that on the 25^th of October, Nicolás Duvojne, who Marcos mentioned just now, the Minister of Finance, will be one of a number of speakers at a full day event on Latin America at Chatham House. That’s Thursday the 25^th of October.

In the meantime, if you could keep your seats while Marcos and the team get out, because I think you’ve got a busy agenda this afternoon and off to New York tonight.

Minister Marcos Peña

Yeah, 10 Downing Street we are going, yeah.

Richard Lapper

But I’d like to thank you very much for what’s been a very interesting meeting. Thank you.

Minister Marcos Peña

Thank you very much, Richard. Thank you very much. Thank you [applause].