MercoPress. South Atlantic News Agency

Dollar clamp represents the failure of Argentina’s energy policy, says Lavagna

The former Economy minister was instrumental in planning and executing Argentina’s recovery from the 200/02 collapse

Former Economy minister Roberto Lavagna said that it will take Argentina “at least three years” to liberate the country from the ‘dollar clamp’ if as of this month it was decided to execute a policy to end restrictions on the purchase of foreign currency.

“There is a ‘dollar clamp’ because the energy policy is probably the greatest failure or the current administration. Until only five years ago Argentina had a surplus in its energy bill and this year we are spending eleven billion dollars to buy power overseas”, said the former minister considered the architect behind the recovery of Argentina from the collapse of 2002.

He added that probably next year the bill could soar to 12/13 billion dollars “in purchasing energy the country can produce but is not producing”.

Lavagna added that currently the Argentine economy is “virtually not growing; has a significant inflation rate, an even more significant fiscal deficit, money exchange controls, a very low investment rate and scarce percentage of job creation.

“Economic policy is an integral effort, a refined mechanism of clockwork” and you can’t simply implement isolated measures; it is clear that the whole economic and social program must be modified.

Lavagna added that most current economic problems are self-inflicted and despite the very positive international conditions, “the fiscal deficit has been lost and so has the current account surplus”.

Asked about the hedge funds (‘vulture funds’) and the Argentine position, Lavagna said that “those investors will continue to claim” and “the problem is what we do at our end, and what we do must have certain logic”.

Finally he admitted that following the second sovereign bonds’ swap in 2010, organized by an international consultant, “Argentina did nothing more and the lack of continuity in these government policies eventually have this sort of consequences”.