Saturday, September 30

IMF: Goldfajn will intervene in the Argentine case (neither party wanted it)

The delay in signing the agreement, and its final transfer to the approval of the board by February; They will coincide with the assumption of the Brazilian-Israeli, with which he will have to assume direct responsibilities in the content of the same. Including, obviously, your signature and assuming guilt if something goes wrong. Thus, he will team up with the North American Julie Kozac and the Venezuelan Luis Cubeddu, who, until now, have been most responsible for conducting the negotiations with Argentina.

What should we expect now with the arrival of Ilan Goldfajn? He is a man of good treatment, a friend, very knowledgeable about Argentina and its chronic political problems, but a lover of fiscal prudence, monetary solvency and long-term plans. He was chosen by Kristalina Georgieva herself in September this year from a long list of contestants in one of the most important positions in the IMF. It was never made public, but in Buenos Aires it is known that the Bulgarian managing director of the organization opted for the Brazilian, since she knows the Argentine vicissitudes and should be responsible for applying the Extended Facilities to the most important and controversial client of the Fund. The one that owes almost 60% of all the debt of the organism (u $ s44,800 million) and less desire to agree and pay shows. Only a connoisseur of the situation with diplomatic and political timing could face the challenge.

Goldfajn was former president of the Central Bank of Brazil between 2016 and 2019, mostly during the presidential term of Michel Temer. At least in the political memory of that administration, in principle there is no good marriage with the Government of Alberto Fernández. Temer is accused of having advanced in a palace coup against Dilma Rousseff, an unconditional ally of Kirchnerism, in addition to having politically enabled the arrival of Jair Bolsonaro to power. Goldfajn is guilty of none of this. However, he is mentioned as the person responsible for inaugurating the stage of fiscal and monetary responsibility, of which Bolsonaro later paid until today.

Regarding his future management as head of the Fund department in charge of relations with the member countries of the Americas, as far as is known, he is a defender of the use of instruments such as interest rates or monetary restrictions to meet goals, together with total transparency to the public and markets in the communication of the plans, objectives and resolutions of the monetary authorities. It also considers central banks as the most responsible (even above the Executive Power and obviously also the Ministry of Economy), to meet the monetary goals; which would give the entity managed by Miguel Pesce an important power within the economic policy of the Government.

Goldfajn is also a defender of the floating exchange rate policy, which would give the Alberto Fernández government greater flexibility to manage the official exchange rate. If the Brazilian winks at the country, from 2022 the country could apply this relationship strategy between the public, companies and markets; to fix the price of the dollar within an eventual “dirty float” scheme. For this, the IMF should negotiate with Argentina a gradual exit from the stocks and approaching the goal of monetary, fiscal and exchange rate balance by 2026. Of all the menus that the Monetary Fund could accept, this would be the most flexible, although for Kirchnerism any restriction of this kind would be difficult to accept.

In 2017 Goldfajn was named Central Banker of the Year by The Banker magazine and, the following year, he was named Best Central Banker by Global Finance magazine. He was chief economist and partner of Itaú Unibanco, founding partner of Ciano Investimentos and partner and economist of Gávea Investimentos with Arminio Fraga, three leading financial institutions in Brazil. Closer in time, he was Chairman of the Advisory Board of Credit Suisse Brazil and also worked as a consultant for various global financial organizations, including the World Bank, the United Nations and the IMF itself. A graduate of MIT, he is recognized as a student and disciple of Rudiger Dornbucsh. Participate in a chat group of former central bank presidents and economy ministers of the region. His local contacts include Miguel Kiguel, Federico Sturzenegger and Gustavo Cañonero.