Argentina's Macrisis: Economy Minister Nicolas Dujovne out
Amid the deepest economic crisis in nearly two decades and an electoral rebuke, Argentine President Mauricio Macri dismissed Economy Minister Nicolás Dujovne today.
The dismissal followed a stinging 16% loss in Sunday's first presidential round to center-left challenger Alberto Fernández, as well as a 27% jump in the dollar against the peso over the past week.
After numerous federal officials reportedly rejected the post, Dujovne will be replaced by Buenos Aires Province Economy Minister Hernán Lacunza.
The media-savvy Lacunza, 50, served as economy minister for Governor María Eugenia Vidal - a close ally of the right-wing Macri administration who, like Macri, was soundly defeated in Sunday's polls, losing to economist Axel Kicillof by 18%.
Lacunza has reaped criticism for raising provincial debt levels from $9 billion when Vidal took office in 2015, to $12 billion currently.
A 500% jump since then in the dollar against the peso has made the province's debt increasingly difficult to service.
Troubled tenure
Dujovne, 52, was appointed in January 2017 after steep utility rate hikes led to a recession in 2016 - Macri's first year in office.
His appointment was widely seen at the time as a signal to newly-inaugurated U.S. President Donald Trump, whose son Eric hired Dujovne's father, Berardo, in 2012 to design Trump Tower Punta del Este (in neighboring Uruguay).
Dujovne loosened his predecessor's austerity policies somewhat, helping spur growth to 2.9% in 2017 - and in turn yielding Macri's right-wing “Let's Change” caucus a strong showing in mid-terms that October.
Budget and current account deficits for 2017, however, ballooned to a record $38 billion (6% of GDP) and $31 billion, respectively - leading to Argentina's sudden expulsion from foreign bond markets in February 2018, and a consequent collapse in a $60 billion carry-trade debt bubble that April.
Dujovne was one of several Macri officials listed in a tax “whitewash” (amnesty) scandal, and was later found to have declared his upscale Buenos Aires home as a vacant lot for tax purposes.
He survived the scandals and the worsening crisis - even as calls for his resignation mounted following his negotiation of a deeply unpopular (and record) $57 billion IMF bailout in June 2018.
The bailout added to Argentina's mounting foreign debt but failed to prevent a recession, as GDP plunged 5.8% by the first quarter of 2019 and 300,000 registered jobs were lost.
Soaring interest charges meanwhile derailed efforts to balance the budget - a centerpiece of the IMF agreement - and of the $45 billion borrowed from the IMF thus far, over 70% financed capital flight.
His last policy proposal - a short-term stimulus package of tax cuts and price controls coinciding with a second round of voting this October - was described by Daniel Rivarola, a retail workers' union official, as “a glass of water to put out a fire.”
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Buenos Aires Province Economy Minister Hernán Lacunza.
He replaces IMF favorite Nicolás Dujovne, fired today by President Mauricio Macri in response to last week's electoral drubbing and currency crisis.
