Monday, January 18, 2016

Macri’s trip to Davos marks pro-market turn

President Mauricio Macri is seen attending the World Economic Forum in Davos, Switzerland in 2014.

President will try to lure investors as meetings with Biden, Peña Nieto expected

Argentina’s return to Davos’ World Economic Forum in Swizerland this week marks a time of change for the country’s relationship with the world’s biggest business leaders.

Since caretaker president Eduardo Duhalde travelled to the forum 13 years ago, no other national leader has been there, as both Néstor and Cristina Fernández de Kirchner avoided visiting the small Swiss town during their years in charge, but President Mauricio Macri is adamant to change that trend by travelling tomorrow despite other cancellations in his recent daily schedule following a bruised rib.

Although the Let’s Change leader has somewhat moderated his pro-business tone at home, foreign investors widely saw him as their favourite in the presidential election, and the government wants to confirm that impression with a busy agenda where many of the world’s richest feel most at home.

The president will have multiple bilateral meetings, including one with US Vice-President Joe Biden, as well as others with French Prime Minister Manuel Valls, Mexico’s President Enrique Peña Nieto, Holland’s Argentine-born Queen Máxima Zorreguieta, Swiss President Johann Schneider-Ammann and Yahoo’s CEO Marissa Mayer. According to state-run news agency Télam, a breakfast with several businessmen is also being set up, with the goal of convincing them of investing in the country now that the “clamp” on foreign currency trade has been lifted in the country.

The government also has the medium-term goal of suggesting Argentina as a possible future member of the Organization for Economic Cooperation and Development (OECD), which groups the Western-alligned main economic powerhouses.

“Argentina is looking to return to the world after years of isolation imposed by Kirchnerism,” a government spokesman said.

Vulture funds

Macri’s visit takes place only days after formal negotiations with holdout bondholders who refused to accept Argentina’s 2005 and 2010 debt restructuring offers and sued the country for full payment plus interest and penalties, sometimes referred to as “vultures.”

The Davos forum is usually a venue full of some of the key actors in the vultures saga. The leader of Elliott Management, the hedge fund at the helm of legal attacks against Argentina’s restructured payments, is a usual attendee and speaker at the World Economic Forum. Last year, Singer shared a panel with economist Nouriel Roubini, seen by many as one of the few who predicted 2008’s financial crisis, and they clashed over the US Federal Reserve intervention to placate it, with Singer arguing against the Fed.

Billionaire George Soros, an ally in Argentina’s legal battle with Singer, is also usually present (he was a speaker last year), as are representatives of other parts in the conflict. Early in the Kirchnerite decade, the presence of representatives of Italian bondholders of Argentina’s 2002-defaulted debt was sometimes quoted as a reason for the president’s absence, although it is also common for people to remain away from Davos due what they see as an ideological bias.

In 2011, Nobel prize economist Paul Krugman said: “Why am I not in Davos? Basically, because there’s not much for me there. I’ve never found talking to business leaders and politicians a good way to figure out what’s really happening; maybe that works for some people, but I find looking at data and talking to smart young economists a much better way to gain some insights.”

Joined by Massa

Macri, who has visited Davos in previous editions of the forum before becoming president, will be joined by Renewal Front leader Sergio Massa. Both have said that the goal of the Peronist leader is to reassure investors that the opposition is cooperative and also interested in bringing foreign investment into the country.

Initially, Macri had offered presidential runner up Daniel Scioli a seat with him in the plane to Europe, but the prison break in the Buenos Aires province raised tensions with the Victory Front (FpV) and brought down those plans. Massa, meanwhile, is enjoying a much improved relationship with Macri, working as a key ally of Let’s Change’s María Eugenia Vidal in the Buenos Aires province.

He will also be travelling with Finance Minister Alfonso Prat-Gay, Production Minister Francisco Cabrera, Transport Minister Guillermo Dietrich, Energy Minister Juan José Aranguren and Foreign Minister Susana Malcorra.

Herald with Télam, online media