Argentina candidate aims to overhaul economy

By Peter Prengaman ,AP

BUENOS AIRES, Argentina — The man who could be Argentina’s next president wants to put an end to tight government currency controls, make peace with the nation’s creditors and improve severely frayed ties to the United States. In short, Mauricio Macri is promising to undo much of what President Cristina Fernandez and her late husband Nestor Kirchner created over the past 13 years.

It’s a platform that appears to be gaining traction.

The right-leaning Buenos Aires mayor leads many polls ahead of the October elections. His popularity is buoyed by economic frustration and widespread anger over the mysterious death of federal prosecutor Alberto Nisman, who accused Fernandez of protecting those responsible for Argentina’s most serious terror attack.

Macri believes pro-market reforms will restore confidence in Argentina, both at home and abroad. Those themes are resonating: A handful of polls conducted in March gave him single-digit leads, a big change from six months ago when he consistently came in third.

Macri says if he is elected, he would move quickly to restrictions on Argentines’ ability to trade pesos for U.S. dollars.

But critics warn against doing too much, too fast. Lifting currency controls overnight could unleash a financial ��bloodbath,�� according to former Central Bank President Aldo Pignanelli.

Economists say ending currency controls would require at least two other major changes: shoring up foreign reserves by taking on more debt, and devaluing the peso to bring it to true market value. Macri has not waded into the policy details of a devaluation, but has repeatedly said Argentina must negotiate with a group of holdout creditors, which would allow the country to access international debt.

Such proposals are frightening for many in a nation still spooked by a US$100 billion default in 2001 that came amid an economic collapse. Overnight, many Argentines saw their savings evaporate and the country turned into a financial pariah.

Daniel Scioli, a ruling party front-runner who has tied or had a slight lead over Macri in some polls, has cautioned that change must come gradually.

While the strong hand of Fernandez’s Justicialista Party helped stabilize the economy after it took power in 2003, Argentina’s recovery has stalled, struggling with inflation that private economists put at over 30 percent, capital flight and increasingly frosty relations with many trading partners, including the U.S.

Fernandez’s government ��isn’t giving people solutions,�� Macri said during a campaign rally in the central city of Rosario this week. ��There is an important need for change.��

Macri, currently on a campaign blitz across the countryside, declined several requests for an interview.

The son of an Italian-born industrial magnate, the 56-year-old Macri has said his political career was inspired by his 1991 kidnapping at the hands of federal police officers, who reportedly received several million dollars in ransom from Macri’s father.

Seized by several men while returning home one night, Macri was held in a basement two weeks, not allowed to see daylight or even the faces of his captors. The ordeal, Macri has said, helped him see how poverty and violence lead people to do extreme things, situations he had never experienced growing up in a rich family.