December 7, 2015

Macri nixes talk show producer as Secretary of University Policy nominee after political firestorm.

Argentine President-elect Mauricio Macri's initial nominee for the post of Secretary of University Policy, talk show producer Juan Cruz Ávila, has been withdrawn from consideration yesterday after days of bitter controversy within Macri's "Let’s Change" (Cambiemos) coalition as to his appointment.

The post, one of the most important within the Ministry of Education, will instead be filled by Dr. Albor Cantard, the Chancellor of the National University of the Littoral (UNL).

The University Policy Secretariat serves as an intermediary between the Education Ministry and the 45 autonomous national (public) universities. The post, under outgoing Education Minister Alberto Sileoni, has been held since 2009 by Dr. Aldo Caballero, who has ample academic experience including four doctorates from Argentine and foreign universities.

Ávila would have been the first Secretary of University Policy with no academic credentials in Argentine history. The controversy over his nomination came after several national universities had already expressed their concerns over statements made by Let’s Change coalition officials and by Macri himself ahead of the November 22 runoff about what he sees as the irrelevance of the 15 new universities created during the Kirchnerist administrations since 2003.

Ávila's nomination was especially controversial with students’ unions, scholars, and with Macri's own allies in the centrist UCR. The UCR is Argentina's oldest existing political party (1891), has a long history supporting public education, and is represented at the universities by the influential Franja Morada students' society. Their objections and advice led Macri to instead nominate Dr. Cantard, who has close ties to the Santa Fe Province UCR and headed the CIN (the National University Council, a roundtable of college presidents and deans from across Argentina) in 2011.

At: http://www.buenosairesherald.com/article/204412/tv-exec-nixed-from-team
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The nomination of the eminently unqualified Mr. Ávila as Secretary of University Policy had two main motives: as a spiteful insult on Macri's part against the National University Council for having endorsed his opponent, Daniel Scioli, for President; and the fact that Ávila is the son of the founder of a sports channel controlled by the Clarín Media Group (Macri's most vocal supporters).

The CIN's reasoning was simple: public higher education budgets had tripled in real terms during the Kirchner era, 15 new public colleges had been opened, thousands of academics had returned from Spain, enrollment was way up, and so on. For them it was a simple question of rewarding a good record.

But for Macri, it was a personal slight. His reaction? Nominating the boorish Mr. Ávila as a very deliberate insult against both the CIN and Argentina's 170,000 faculty staff.

What Macri did not count on, was the clout academics have in Argentina (when they're united) and the public outcry against the nomination of the decidedly unprofessorial Mr. Ávila - a man who could have easily been cast as one of Rocky Balboa's trainers (with apologies to Burt Young).

After a few days of that, Macri relented. Save the photo, as they say, because it doesn't happen too often.

As an aside, I should mention that the man who held the U.S. counterpart post (Asst. Secretary of Postsecondary Education) during President Obama's first term, Dr. Eduardo Ochoa, is an Argentine-American. I'm sure he's quite relieved Macri came - or was brought - to his senses.

December 6, 2015

Argentina commits to restoring one million hectares (2.5 million acres) of woodland.

Argentina committed yesterday to restoring one million hectares of degraded and deforested land as part of the 20x20 Initiative, a Latin American effort seeking to significantly restore the region's woodlands by 2020. This makes Argentina's commitment one of the largest in a total 24.8 million hectares to be restored around the world hope thanks to US$730 million on funds assigned by governments and investors globally as part of the broader Bonn Challenge.

The new commitments announced yesterday are built on pledges by eight countries, two regional initiatives and five investors. The 20x20 initiative had already been launched last year at the climate change summit in Lima, hoping to restore 18 million hectares; but now thanks to the new pledges - including this one - an additional 6.18 mil. hectares will be restored.

Land restoration is a key strategy for mitigating and adapting to climate change.
“Argentina is one of the leading countries in the region on agricultural production so its involvement in the project was essential. It has a strong potential to restore a lot of its degraded land,” Walter Vergara, head of the initiative, told the Herald. “We hope to have a constructive dialogue with the newly elected government (Macri) so the one million hectares objective becomes a reality.”

Following Argentina’s commitment, Nicaragua agreed yesterday to restore 2.8 million hectares; Costa Rica and Honduras, one million each; Chile, 500,000; the State of São Paulo (Brazil) 300,000 hectares; the State of Espirito Santo (Brazil) 80,000; and the American Bird Conservancy, a regional program, 100,000.

Land-use change, forestry and agriculture account for roughly one half of the emissions from Latin America and the Caribbean, in contrast to highly industrialized and less forested areas where emissions are typically dominated by energy use and industrial emissions.

More than 200 million hectares (500 million acres) of land are available for restoration in Latin America and the Caribbean, according to the World Resources Institute (WRI). Through the initiative, countries will work to restore forests on cleared land and improve the productivity of landscapes through better use of trees in agriculture and livestock production.

At: http://buenosairesherald.com/article/204462/argentina-commits-to-restoring-one-million-hectares
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There's the rub: “We hope to have a constructive dialogue with the newly elected government so the one million hectares objective becomes a reality.”

This commitment will probably feel as left out in a neocon administration like Macri's, as a bible in a brothel.

December 5, 2015

New rightwing Buenos Aires Gov names Justice Minister opposed to abortion in case of rape or incest

The incoming governor of Buenos Aires Province, María Eugenia Vidal, nominated Judge Carlos Mahiques as the next Justice Minister for the province, Argentina's largest. Mahiques is best known for his controversial judicial dissent in 2006 against a disabled teen who had sought an abortion after being raped by her uncle.

Judge Mahiques was the sole dissent against the landmark, July 31, 2006, tribunal court ruling which granted a 19 year-old disabled woman the right to obtain an abortion on account of her mental deficiency and of her being raped. While abortion in nearly all other circumstances remains illegal in Argentina, her request was upheld by the Supreme Court as being within the circumstances provided for in Article 86, paragraph 2 of the Criminal Code, and as such a constitutional right that does not require court authorization.

Conservative judges in Argentina such as Mahiques have periodically tried to nullify this right despite the fact that abortion in cases of rape, incest, or where the life of the mother is in danger has been protected as a right within the Argentine Criminal Code since 1921.

"I had a long talk with Vicenta (the victim's mother) because they heard the news and couldn't believe that he (Mahiques) had been named Justice Minister. This is someone who was so unjust to her daughter and her family, that they still live with the psychological consequences of what happened," said Estela Díaz, the Secretary for Gender Equality for the CTA labor union and a supporter and adviser to the young woman throughout the 2006 trial and its aftermath.

The Center for Legal and Social Studies (CELS), one of Argentina's foremost human rights organizations, has condemned Judge Mahiques for this dissent, as well as for his rulings against prisoners' rights and against the decriminalization of drug use. Mahiques' rulings were overturned in each case by appeals courts or the Argentine Supreme Court.

Mahiques specializes in Criminal Law, has a Doctorate in Law from the Catholic University of Argentina (UCA), and teaches at the Opus Dei-owned Austral University.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.politicargentina.com/notas/201512/10235-el-polemico-ministro-de-justicia-bonaerense.html&prev=search

November 29, 2015

Expropriation of Hotel Bauen, and transfer to co-op that recovered it, passed by Argentine Congress.

In the final, "marathon" session of the year for Argentina's Lower House of Congress, the center-left majority Front for Victory (FpV) caucus joined forces with a number of smaller, leftist parties to approve some 90 bills. Other opposition parties, who were hoping to avoid having any new bills passed until right-wing President-elect Mauricio Macri takes office December 10, walked out of the Chamber in an attempt to deny them quorum (50% of congressmen present).

The maneuver failed, however, and the package of bills - expected to be the last ones signed by outgoing President Cristina Fernández de Kirchner - was approved in its entirety.

These 90 bills included two that were of particular note: the formal reestablishment of YCF, the state coal firm privatized in 1994 and renationalized in 2002 after its private owners made off in with $144 million in state subsidies for improvements that were never carried out; and the federal expropriation and transfer of the Hotel Bauen to the workers' cooperative that has operated the hotel for 12 years.

Located in midtown Buenos Aires, the Bauen's history is a veritable parable of neoliberalism in Argentina. The hotel was inaugurated in April 1978 in time for the World Cup that June. It was originally owned by the Iurcovich family, who built the 19-story, 200-room hotel in part with a $4 million loan from the former National Development Bank. Granted in 1976 during the early days of the Videla dictatorship, the loan was never repaid. Overlooking one of the most congested avenues in Buenos Aires, business slowly declined at the hotel. The hotel became saddled with debts, back taxes, and contractual disputes in the late 1990s, and ultimately closed in December 2001.

A number of its laid-off workers then organized the Bauen Work Cooperative in 2003, and occupied the empty modernist building that March. The hotel became one of the most prominent of the over 200 "recovered businesses" under worker self-management in Argentina. The Iurcovich-controlled Mercoteles Corporation regained interest in the hotel as Argentina's economy recovered, however. The resulting dispute led to years of legal wrangling, including court rulings in 2005, 2007, and 2014 (all appealed), ordering the eviction of the cooperative. The co-op's 30 initial employees had by then grown to 130.

This last court ruling in favor of Mercoteles prompted the introduction of a bill in Congress (four blocks south of the hotel) for its federal expropriation and transfer to the Bauen Work Cooperative. The co-op would, in return, partner with the University of Buenos Aires in the establishment of internships for students majoring in hotel management and related fields.

The passage of this bill is "very important to the peace of mind of the 130 workers of the cooperative, and is the fruition of many efforts," said the Bauen Co-op's legal counsel, Diego Carbone. The bill, he added, was passed "thanks to the fact it was introduced and debated in the National Congress; it would have probably never passed in the Buenos Aires City Legislature."

At: https://translate.google.com/translate?hl=en&sl=es&u=http://notas.org.ar/2015/11/27/en-una-maraton-legislativa-se-aprobo-la-expropiacion-del-bauen/&prev=search

November 28, 2015

Argentina's Macrinflation.

President-elect Mauricio Macri, elected last Sunday on the right-wing "Let's Change" coalition, is still two weeks from taking office. But already there were widespread increases in wholesale food prices and of inputs from different sectors of the economy. Shortages are, moreover, beginning to develop as well because wholesalers and suppliers are now reluctant to ship goods to retailers and manufacturers on fears of a sharp devaluation once Macri takes office on December 10.

Macri's promise to eliminate exchange restrictions and export taxes on raw materials has generated an escalation of prices on key products from across the economy. A 50-kilo (110 lb.) bag of wholesale wheat flour for bakeries began rising the day after the runoff, going from 150 pesos ($15) to 220 pesos by Thursday - and wholesalers have already announced their intention to raise it next week to 240 pesos ($24), an increase of up to 70% from just a month ago.

Farmers and slaughterhouses are not only speculating on the devaluation itself; but also on the elimination of export taxes and export quantity restrictions, which of course creates a strong incentive to limit local consumption. "The other day I heard a PRO Congressman (Macri's party) say that if people couldn't afford bread, they should look in another bakery," Jorge Alonso, owner of the Elca Bakery, said. "They refer to this as a 'shock of confidence'. Is that all they have to say!? As a businessman I need concrete answers."

According to Alberto Williams of the Chamber of Butcher Shops, wholesale meat prices have also jumped recently: various cuts of beef by 30% this week alone; and chicken, by 25%. Feed corn prices, a key staple to ranchers (most of whom, ironically, were enthusiastic Macri supporters), are also rising sharply, which only adds to the cost of meat in a country known for having the highest per capita beef consumption in the world.

Argentina's growing vegetarian population isn't faring much better: fruit and vegetable prices have also come under pressure by speculators, especially in large supermarkets. A kilo (2.2 lb.) bag of potatoes, retail, rose Thursday to 9.90 pesos ($1.10) - a 300% markup. Squash, another popular Argentine staple, was retailing for 15 pesos a kilo (70 ¢ a pound) last week; it's now averaging 22.90 pesos - a 50% jump. Tomatoes have also skyrocketed 200% this past week.

There are alternative to supermarkets, however, even if less convenient. "I'm afraid of the oligopoly supermarkets and hypermarkets control," said Fabián Zeta of the Horticulture Chamber at the Central Market in suburban Tapiales, which supplies grocery stores across the Buenos Aires metro area and retails to the public as well. "They operate on high profit margins to begin with, and are now marking up prices all they can 'just in case'. The greengrocers who work with us at the Central Market aren't raising their prices."

Recent price run-ups are by no means limited to groceries. Dow Chemical, the largest supplier of plastic to Argentina's toy industry, stopped selling a week and a half ago. "They claim they have no material; but are actually waiting for the devaluation promised by Macri," said Matías Furio of the Toy Industry Chamber. Steelmakers, for their part, are shipping product normally; but Juan Carlos Lascurain of the ADIMRA metal product industry chamber confirmed that they're hoarding raw materials and are forcing their customers to accept being billed after December 10 (at a much higher price).

Manufacturers of industrial inputs for finished products, meanwhile, have begun to reference their prices at 16 pesos to the dollar (rather than the current rate of 9.70). "They have generally increased prices and slowed deliveries. Those who do fill orders have reduced collection times from the customary 45 days to 7," said Fernando Lascia of the APyME small manufacturers chamber. Lascia explained that most industrial sectors are rushing to adapt to the new circumstances created by Macri's promised devaluation. "Polypropylene has already increased 26%. Perfume and stainless steel makers are still filling orders normally; but billing buyers in January and at a 16-peso price reference. Stainless steel makers, in fact, are attaching a rider to their sales stipulating that if the dollar rises above 16 pesos a surcharge may apply."

Argentina's supply chain is highly concentrated in a number of monopolies or oligopolies over each sector of the economy, and this allows them to more or less control prices. Many of the executives at these monopolies are also regulars at the right-wing Idea Colloquium events, and are close to Mauricio Macri and his economic team. It is therefore plausible that many of these recent price increases have been made with the consent of the president-elect.

The equation is simple: that the inflationary impact of Macri's promised devaluation be felt before he takes office on December 10.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.pagina12.com.ar/diario/economia/2-287137-2015-11-28.html&prev=search
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The mere forecast of a devaluation is already causing wholesale prices to jump further and faster than any anyone, even the staunchest Kirchnerists, had feared.

How long before Macrinflation, become a Macrisis?

November 28, 2015

What might Macri's public health policy be like? Just ask at the Garrahan Children's Hospital.

The Dr. Juan P. Garrahan Children's Hospital is the largest of three public pediatric hospitals in Buenos Aires, and one of the largest in Latin America. Inaugurated by President Raúl Alfonsín in 1987, the 1.2 million ft² center annually hosts 534,000 doctor visits, 25,000 outpatient visits, and 131 transplants; its average occupancy rate is 98%. It even includes a guest house for loved ones of hospitalized children who've been transferred from elsewhere in the country.

Its importance as the largest pediatric hospital in Argentina, and as one which primarily serves disadvantaged Southside Buenos Aires children, was underscored by a 1989 bill signed by President Carlos Menem stipulating that the City and the National Government share equally in funding its budget that today is nearly US$300 million a year.

For the last two years however, Mayor Mauricio Macri - who was elected President this Sunday on the right-wing "Let's Change" ticket - has routinely underfunded the City's statutory obligations to Garrahan Hospital. His 2014 budget did so by 113 million pesos ($14 million), and the 2015 budget by 216 million pesos ($24 million). The shortfall thus rose from 12% of the City's share, to 18.5%.

According to Oscar Trotta, a member of the Garrahan Hospital Board, these cutbacks "will be reflected in the suspension of numerous ongoing improvements, including greater generator capacity to handle power needed by new MRI scanners, the hybrid operating room for interventions in cardiology and hemodynamics, and for hiring additional nursery staff." "We were counting on the additional nursery staff because many mothers whose babies were born with defects are being transferred from Ramón Sardá Maternity Hospital," said Dr. Trotta.

Sardá Maternity, like all 33 Buenos Aires public hospitals, has also suffered from funding shortfalls during Macri's second term as Mayor. "While the infant mortality rate nationally is declining, Buenos Aires' is increasing - and yet budgets for pediatric hospitals are being cut," added Dr. Trotta.

Marcelo Scopinaro, the Chairman of the Hospital Board, added that "work will also have to be suspended on the new oncological day ward, the hospital pharmacy expansion, new operating rooms and outpatient clinics, the expansion of the bone marrow transplant wing that should double capacity to 14 beds, and other building improvements. All these works were important because the number of children needing them is increasing."

To Dr. Trotta, the problem is simple: "the Nation is bearing its 50% share of the costs; but the City has reduced its share of the costs by 18.5%." The shortfall worsened by September, when hospital authorities reported that of 158 million pesos ($17 million) the City had been required to contribute toward salary costs, it had disbursed but $44 million ($5 million).

President Cristina Fernández de Kirchner attempted to mitigate this impact by havinf the Nation's budgetary outlay for the hospital raised by 50% for FY2016 - to 1.72 billion pesos ($180 million, currently). She also signed a bill transferring the land itself - a 23 acre lot originally owned by the Army - to Garrahan Hospital, something its Board had been requesting since it opened in 1987.

Macri, however, responded (after the election) by slashing 350 million pesos from the City's coequal share for 2016 - a 20% cut which differs sharply from his policy of awarding no-bid, unauthorized political advertising contracts to supporters such as sportscaster Fernando Niembro (who netted 21 million pesos this way).

Dr. Scopinaro nevertheless prefers to accentuate the positive. "We are happy and proud to finally have the definitive title to the land." "This will regularize various contracts, ensure proper operational risk coverage, normalize utilities, and other much needed changes."

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.telam.com.ar/notas/201412/89529-denuncian-que-la-reduccion-presupuestaria-del-gobierno-porteno-al-hospital-garrahan-afectara-obras-e-insumos.html&prev=search

And: http://www.diarioz.com.ar/#/nota/hospital-garrahan-preven-un-recorte-del-20-para-el-2016-47752/
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Shortly after Garrahan Hospital opened in 1987, a dystopian film - Lo que vendrá ("What's to Come&quot - was released in Argentina. In it, a civilian but highly authoritarian state in the near future keeps wages low, reacts brutally to protests, and of course critically underfunds public health and education.

The movie was partly filmed inside the then soon-to-open Garrahan Hospital.

November 27, 2015

Macri plays dangerous game with Argentine peso.

Analysts abroad largely agree removing restrictions too quickly could spark trouble.

If there’s one point president-elect Mauricio Macri has been crystal clear about, it’s that he hates all the regulations throttling the country’s currency market. So on Tuesday, Macri reiterated his pledge to do away with the foreign-exchange controls immediately upon taking office next month.

It’s an audacious plan, one that could jump-start his efforts to lure much-needed investment to the country but it also comes with great risk. With the official and black-market exchange rates currently 58% apart, lifting the controls will almost certainly trigger a plunge in the value of the peso. That could cause a surge in consumer prices in a country where inflation is already running above 20% (inflation in November has already doubled to 3% a month - 40% annualized - on devaluation fears), force an economic downturn, and spark a public and political backlash against the new government.

The plan is so fraught with risk and so logistically difficult that many outside observers insist that he won’t really try to pull it off so quickly. They chalk it up to campaign rhetoric. But Macri isn’t toning down his language as president-elect. When asked Tuesday how fast he’d move, he replied: December 11 - one day after he’s sworn in.

“History is littered with the corpses of countries that have abandoned capital controls precipitously,” said Barry Eichengreen, an economics professor at the University of California at Berkeley and former senior policy adviser to the IMF during the 1997-98 Asian financial crisis. Should Macri, two-term mayor of Buenos Aires and wealthy businessman, follow through on the rhetoric, the US$600 billion economy could suffer a big blow.

Assuming he devalues the peso by 39% to 15.8 pesos in three months (a 64% jump in the value of the dollar in Argentina) and removes utility subsidies, the Central Bank will have to raise short-term interest rates to 40% by September to control inflation, according to Oxford Economics, a UK research firm. Under such a “shock therapy,” the economy will shrink by about 3% annually in the next two years before picking up in 2018, Brazilian economist Luiz Kessler wrote.

Venezuela, a Mercosur trade bloc partner and long-time ally, has been there before. In 1989, newly-elected President Carlos Andrés Pérez abruptly lifted foreign-exchange controls and let the currency plunge after finding that the Central Bank was running out of foreign reserves. Consumer prices soared 21% in one month alone, leading to the “Caracazo” riots that killed hundreds and spurred Hugo Chávez, then an Army officer, to stage a coup attempt that launched his political career.

Instead of shock and awe, Macri should adopt a gradual transition to a free-floating exchange rate, said Paulo Vieira da Cunha, a former Brazilian deputy Central Bank governor. That would give the government time to pass measures that will soak up extra pesos, implement a credible fiscal plan and draw in cash from abroad, he said.

“There is a difference between doing something gradual with credibility, and doing something haphazardly into a void,” said Cunha, now chief economist at Los Angeles-based money manager Ice Canyon.

No one is saying Macri shouldn’t start implementing changes quickly. The economy is currently growing at 2.8%. Foreign exchange reserves, however, are the lowest in nine years at US$25.8 billion. The budget deficit is the largest in three decades (6-7% of GDP). In the last four years, the peso has fallen 55%. And while wages have kept up consumer prices have more than doubled according to private estimates, with annual price increases of more than 20% since 2011.

But for Macri, the margin for error is thin. As 49% of voters went for his opponent, the Victory Front (FpV) candidate Daniel Scioli, unpopular measures of large devaluation, coupled with spending cuts and tax increases, would only alienate Argentines and erode his political support.

Mario Blejer, former Central Bank head who devalued the peso in 2002, said capital controls should only be phased out and lifted sector by sector, starting with importers. To mitigate the impact, Macri will have to increase interest rates on Central Bank notes and spur demand for pesos, said Blejer, who was forced to boost those yields to 140% thirteen years ago. “We used to think about it as an equation in which the greed for higher interest rates would trump the panic of holding pesos,” Blejer, who was most recently advising Scioli, said. “They’ll see that it’s difficult. You can’t just change everything from one day to the next.”

Ultimately, Macri’s narrow victory over Scioli may be the loudest call for a gradual approach, said Vargas. “What I’m seeing is that they’re becoming aware of the magnitude of the adjustments, maybe because of how close this race was, and that’s going to impact how aggressive they are,” Blejer said.

At: http://buenosairesherald.com/article/203790/macri-plays-dangerous-game-with-peso
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Seems like old times...

Pictured: Dictator Roberto Viola swears in Economy Minister Lorenzo Sigaut in March 1981. Sigaut's 30% devaluation just days later touched off a chain reaction that crashed the economy. His response to soaring inflation was to raise interest rates to a depression-inducing 20% a month.

As in Macri's case, these policies were welcomed by large landowners and speculators to whom they became a veritable windfall. Amid the worst recession since 1930 they were rescinded 15 months later, and the dictatorship stepped down the following year.

November 26, 2015

Macri Economy Minister Alfonso Prat-Gay and his shady dealings with the billionaire Fortabat estate.

The Congressman transferred US$1.025 billion from the sale of Amalia Fortabat's cement firm Loma Negra to tax havens. Upon her death in 2012 he was appointed as executor of her estate, estimated at US$1.6 billion.

The image was eloquent, but the media and the entire political spectrum failed to see it as such. On February 19, a few hours after the death of Argentine billionaire Amalia Lacroze de Fortabat, Alfonso Prat Gay was one of ten pallbearers at the funeral of the "Lady of Cement" at the renowned Recoleta Cemetery. Visibly distressed, Prat-Gay, the Ranking Member of the House Finance Committee, knew he would have a hard task to carry out. Fortabat's heirs had designated the former JP Morgan wealth manager as executor of an estate that Forbes magazine estimated at US$1.6 billion - a role incompatible with his duties as Congressman, since Fortabat's cement maker, Loma Negra, is also a leading state contractor.

However, the link between Prat-Gay and Fortabat family has a long history: in 2005, when the Loma Negra cement was sold to the Brazilian conglomerate Camargo Correa, Fortabat chose him to handle the sale valued at US$1.025 billion. Despite her own misgiving toward JP Morgan for having undersold Loma Negra in order to collect a quick commission, Prat-Gay was presented by her survivors as "the most transparent option" to manage the administration of the fortune.

Prat Gay refused to involve his former partners in an opportunity of this magnitude. He ultimately wired the proceeds from the estate to four flagship tax havens: the United States, Britain, Hong Kong and Switzerland. According to data obtained by Tiempo Argentino from banking sources, the first transfer was US$100 million in 2005; the second for US$430 million 2006; US$600 million in 2007; and another US$600 million in 2008.

The financial engineering Prat-Gay used was the same for each transfer: the use of a diversified basket of currencies, short-selling the peso, and not a penny invested in the country. He then closed, and then reopened, Fortabat's UBS accounts merely to line his own commissions, since intermediaries are entitled to kickbacks of up to 40% for new financial products they help the bank sell. The commissions may have accounted for hisbeing denounced in 2007 for offshoring personal funds totaling US$800,000 - his many Congressional speeches criticizing capital flight notwithstanding.

Tilton Capital, a wealth management outfit he co-founded with Pedro Lacoste (son of the late Admiral Carlos Lacoste, who held top posts during the 1976-83 dictatorship), is also suspected of arranging tax avoidance schemes. "Tilton is one of nearly 20 offices of its kind in Buenos Aires," a Prat-Gay collaborator said. "They are called 'financial intermediaries' but their only characteristic is opening offshore accounts."

His foray into charitable activities has likewise come under scrutiny. A year after the Loma Negra sale, Congressman Prat Gay formed the Andares ('Paths') Foundation, "for the development of microfinance." Currently closed, the foundation's stated aim was to "contribute to the eradication of poverty and social exclusion by, supporting the development of microfinance." Andares was primarily underwritten by the Amilia Lacroze de Fortabat Foundation. The charity was managed not by people with experience in non-profits; but by corporate accountants who would have experience in managing tax writeoffs - including Lacoste. Among its other managers was Luis Cedrola, adviser to the Christian Association of Business Managers - an advocacy group tied to the far-right Catholic sect Opus Dei - and Orlando Salvestrini, the CFO of the leading Argentine wire transfer and bill pay service Pago Fácil - which is owned by the Macri family.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://tiempo.infonews.com/nota/104947/los-oscuros-negocios-de-prat-gay-con-el-millonario-patrimonio-de-amalita&prev=search
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Besides being the author of one of the greatest tax frauds in Argentine history, Prat-Gay's funds have put options against the peso - which of course means that he would personally stand to gain by his own order to devalue if Macri goes through with it.

November 25, 2015

Outgoing Argentine President Cristina Kirchner: 'A country and a business are not the same'.

President Cristina Fernández de Kirchner headed a rally to inaugurate a new wing at Posadas Hospital, in the Buenos Aires suburb of El Palomar. Today’s was Ms. Kirchner’s first public appearance after Sunday’s runoff that narrowly consecrated Mauricio Macri of the "Let’s Change" (Cambiemos) right-wing alliance as Argentina’s new head of state.

Joined by Buenos Aires Province mayors, provincial governors, and representatives of the Justicialist (Peronist) Party, Cristina Kirchner assumed the responsibility of leading an opposition that will challenge the Mauricio Macri administration in the upcoming years.

“I want to tell everybody, those that voted for us and those that did not, we will not do the things they did to us (referring to the many smear campaigns). We will watch over the rights of all Argentines, to be acknowledged and respected. We will cooperate because we are men and women who know about government responsibilities,” the head of state said today warning that when governability is interrupted it impacts those who have least.

Affirming she will "never leave" and "will always be with you," Cristina Fernández de Kirchner highlighted the current unemployment rate of 5.9% and praised the human rights abuse trials that have convicted hundreds of former military officials that tortured and killed thousands during Argentina’s bloody 1976-83 dictatorship.

“We arrived in an Argentina where there was impunity, and we leave having initiated the most important reconstruction of memory, truth, and human rights in the history of the world. I dare say in the world because few countries have tried their own crimes,” she said and later condemned a front-page op ed in La Nación, published a day after Macri’s victory, demanding the release of the military officers sentenced for violations against human rights.

Among other state policies, Cristina Kirchner also stressed the significance of the Universal Child Allowance (AUH) that guarantees that “kids have schooling and health” because “they are not to blame for what was done to their parents."

President Fernández de Kirchner recalled the work done by the over 1,000 Argentine scientists who have returned to the country after being forced to leave Argentina in search of a better future and job opportunities in the aftermath of the 2001-02 crisis. “We leave with more than a thousand scientists that have returned, with the most important investment in science and technology in the history of Argentina,” she said and hailed the recent launching of the ARSAT 1 and ARSAT 2 satellites.

“I'd also say that we have done something much important than all this. We have empowered people as to their rights. People know what their rights are. We will be there defending the conquests in rights; and the sowing of national, popular and democratic conscience across Argentina, in all who believe that the homeland is your fellow man.”

At: http://buenosairesherald.com/article/203754/cfk-a-country-and-a-business-are-not-the-same
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Whatever mistakes she made over the last 8 years (and who hasn't!) she's been good to business, and the working man. The way it should be.

Average profit margin in publicly traded companies was 39% in 2014; 57% in public/private partnerships.
https://translate.google.com/translate?hl=en&sl=es&tl=en&u=http%3A%2F%2Fwww.tiempofiscal.com%2Fvernota.asp%3Fid_noticia%3D4539

After stellar 2013 and 2014, stocks up 53% so far in 2015 (until Macri's election, that is).
http://www.buenosairesherald.com/article/140375/merval-breaks-new-record

Purchasing power of wages up 72% since 2003 - using private inflation estimates.
https://translate.google.com/translate?hl=en&sl=es&tl=en&u=http%3A%2F%2Ftiempo.infonews.com%2Fnota%2F39354%2Fel-poder-adquisitivo-crecio-72-desde-2003

Press shills and right-wing ideologues may be happy; but I think Argentine business is starting to miss the old girl already. Since Macri was elected, stocks are off 9%.

November 25, 2015

Susana Malcorra, Cabinet Chief to Ban Ki-moon, to be appointed Argentine Foreign Minister.

Argentine President-elect Mauricio Macri today revealed one of the members of his future cabinet. In a press release, Macri announced Susana Malcorra will head the Foreign Affairs Ministry.

“She is intelligent, vigorous, and wise,” Macri said about her, adding she comes to “add her vision about the international issues in this phase of change we will begin soon.”

“I am very glad and proud. She is a person with a very vast and detailed knowledge of the international agenda that moves the world today,” Macri posted on Facebook. “Argentina needs to connect with other nations in the world to develop growth and prosperity opportunities for all the Argentines,” he added.

Born in the city of Rosario (Argentina's third largest), Malcorra is the current United Nations Chef de Cabinet to the Executive Office. She was appointed to the post by UN Secretary-General Ban Ki-moon in March 2012.

Malcorra, 61, had served as the United Nations Under-Secretary-General for Field Support. Prior to that, she had been CEO and Deputy Executive Director of the World Food Programme, where she oversaw emergency and humanitarian operations in more than 80 countries, including UN operations during the 2004 South Asian tsunami.

She also had more than 25 years of experience in the private sector before joining the WFP.

Malcorra started her career in IBM Argentina in 1979, and joined the recently privatized Telecom Argentina in 1993. She was appointed CEO of the company in 2001.

She is not affiliated with any particular political party in Argentina.

At: http://www.buenosairesherald.com/article/203682/macri-announces-susana-malcorra-to-be-appointed-foreign-minister
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A silver lining in the Macri cloud, I believe. Considering some of the other names being floated for Macri's cabinet, Malcorra will bring much needed credibility. I wish her all the best.