For Alfonso Prat-Gay, Milei’s economic plan faces “two paradoxes”: it does not generate enough confidence in Wall Street or in savers

During a presentation titled “An Argentina in transition” at the Rotary Club of Buenos Aires before 140 members, the economist maintained that “what is truly paradoxical, after almost 30 months in power, is that a libertarian government that he fulfilled almost all the decalogue that Wall Street would have asked of him, he still did not manage to access to the international debt market.

In his opinion it is a fundamental step because Argentina needs to cover “very high maturities in foreign currency for many years.” Without bond issues, those payments would have to be made in cash, “something that no country makes normal“.

For Prat Gay, the government’s permanence outside of Wall Street is a phenomenon that is difficult to explain: “That a libertarian government does not have access to the market It’s paradoxical, I have no explanation“The country risk plummeted this Wednesday after the detente in the conflict in the Middle East.

The second paradox, he added, is domestic: “The vast majority They voted for Milei in the second round, but when they have to vote for the currency, they do not vote for the peso“The BCRA recently reported that the demand for dollars by savers remains at high levels and that it rebounded after a drop after legislative elections.

As he explained, there is no process of remonetization of the economy, a key condition to sustain the recovery. “If there is no remonetization, there is no increase in reserves and there is no re-access to the market: It’s a dog that bites its tail”, he warned.

Prat-Gay linked both tensions to a deeper issue of trust. “What happens that Argentines don’t trust the peso and foreigners don’t trust Argentina?” he asked. And he answered that the combination of lack of credit, negative reserves and current account deficit “is not sustainable”.

In this framework, he considered that the economic program “does not generate the confidence that it should generate” and warned that without a greater demand for money “there is also no credit or economic activity.”

The former official framed this diagnosis in a broader context of transition. “It is quite obvious that the old died (…) but we don’t know if the new was born“, nor if it is what is going to prevail,” he said. That uncertainty, he said, impacts both the social mood and the economic dynamics.

He also questioned the consistency in the official discourse on morality as a guide for the Government plan, an idea that the head of state introduced this year as a management axis. “Whoever raises the torch of ‘the new’ has to be and appear ethical,” he stated, and criticized the chief of staff Manuel Adorni.

On the economic level, he stressed that “The macro cannot be right if the micro is wrong.” and warned about the dispersion of results of the adjustment, with sectors that improve and others that deteriorate. The former minister has been, since the middle of last year, vice president of Prestige Auto, a firm that represents Mercedes Benz in Argentina.

Prat Gay also pointed out against the lack of dialogue and the communication dynamics of the ruling party. He pointed out that it is a Government that “You need to congratulate yourself all the time on the networks” and that reacts adversely to technical debates, such as poverty measurement.

Regarding the controversy over the suspension of the update of the CPI basket in the Indec, he insisted that if the Government considers itself as “the new thing”, it should avoid any suspicion: “One thing that would represent ‘the new’ would be to not even suspect again that there is any concern about what the Indec measures.”

In contrast, he recognized the program’s achievements, particularly fiscal correction. “It is notable that it was done without too many negative reactions,” he highlighted. However, he insisted that the key moving forward is to generate a program that “loves.” In his opinion, this implies sustained growth, employment and expansion of exports. “I don’t know anyone who falls in love without generating employment, production or exports”, he stated.

Finally, he stated that Argentina needs to pass “from panic about the old to hope for the new” and build consensus so that the reforms last. “Those that last are those that arise from consensus, not from polarization,” he concluded.