Argentine debt restructuring expert Guzman to be named economy minister: source

Argentine debt restructuring expert Guzman to be named economy minister: source

06/12 - 14:21 - Argentina’s in-coming Peronist government will name Columbia University economist Martin Guzman as economy minister as it grapples with high inflation and a looming debt restructuring, a source with knowledge of the situation told Reuters on Friday.

President-elect Alberto Fernandez, who will come into office on Dec. 10, will formally announce his cabinet late on Friday.

“We spoke last night and it’s definite. Martin will be named economy minister,” the person said, asking not to be named because the appointment had not been made public.

Guzman, a young academic and protégé of Nobel Prize-winning economist Joseph Stiglitz, is considered an expert in the field of debt restructuring, though he has little hands-on experience in policy making.

The economy pick could define the direction of Latin America’s No. 3 economy over the next four years and impact grain traders, investors and creditors locked in talks with the country over $100 billion in sovereign debt as default fears loom.

Argentina is one of the world’s biggest food exporters. The country’s markets and the peso currency have been on edge since Fernandez won a resounding victory in an Aug. 11 primary election, a shock result that spelled the end for incumbent Mauricio Macri, a champion of business and free markets.

Guzman, who got his doctorate from Brown University and undergraduate degree from the National University of La Plata, Argentina, is an associate research scholar at the economics division of Columbia Business School. His research focuses on macroeconomics and sovereign debt crises.

He is the director of Columbia University Initiative for Policy Dialogue’s Debt Restructuring Program and editor-in-chief of the Journal of Globalization and Development.

He is a member of the Institute for New Economic Thinking Taskforce on Macroeconomic Efficiency and Stability, chaired by Stiglitz. Both were critics of the fiscal austerity drive sanctioned under Macri’s $57 billion standby financing deal with the International Monetary Fund.

“While his stance seems more moderate than others in Mr. Fernandez’s camp, Mr. Guzman is unlikely to take a market-friendly approach,” said a note from Capital Economics.

“He has been critical of austerity policies as a solution to debt crises. Moreover, he has particularly negative views about the IMF, stating that Argentina should reject any further financing from the Fund to pay off its debts,” the note said.

Guzman could not immediately be reached for comment.

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