1 00:00:02,520 --> 00:00:07,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio News. 2 00:00:07,480 --> 00:00:09,639 Speaker 2: Thank you very present, Mile, thank you, thank you very 3 00:00:09,720 --> 00:00:12,600 Speaker 2: much for talking to Bloomberg again. Last year, I think 4 00:00:12,640 --> 00:00:17,160 Speaker 2: we discussed free market economics, dogs and the raising stones. 5 00:00:17,360 --> 00:00:21,840 Speaker 2: But this time we are going to begin with Venezuela. 6 00:00:22,280 --> 00:00:27,120 Speaker 2: You welcomed the removal of President Maduro, but the Trump 7 00:00:27,160 --> 00:00:32,040 Speaker 2: administration seems quite happy at the moment, was sticking with 8 00:00:32,400 --> 00:00:37,519 Speaker 2: Venezuela's interim president Delsi Rodriguez, who is loyal to Maduro. 9 00:00:38,520 --> 00:00:42,040 Speaker 2: And you very much described the Maduro regime as a 10 00:00:42,159 --> 00:00:48,159 Speaker 2: narco terrorist dictatorship. So what has changed? Are you worried 11 00:00:48,200 --> 00:00:50,040 Speaker 2: that nothing has changed in Venezuela. 12 00:00:52,200 --> 00:00:58,360 Speaker 1: No, no, it's not. First of all, I would like to. 13 00:00:59,520 --> 00:01:06,039 Speaker 3: Recognize the tremando work by President Trump and market first 14 00:01:06,280 --> 00:01:16,080 Speaker 3: in modern extract the now tyrants, dictator, murderer Maduro propriety 15 00:01:16,120 --> 00:01:20,120 Speaker 3: is also made a point of spreading terrorism across the 16 00:01:20,160 --> 00:01:27,360 Speaker 3: whole region, funding campaigns and financing terrorist acts out of 17 00:01:27,400 --> 00:01:32,000 Speaker 3: the streets, complicating lives for all governments that were not 18 00:01:32,240 --> 00:01:38,080 Speaker 3: pro twenty first century socialism. So I warmly welcome that situation. 19 00:01:39,319 --> 00:01:45,039 Speaker 3: On the other hand, I think the plan designed by 20 00:01:45,080 --> 00:01:50,200 Speaker 3: the US administration in three phase is quite appropriate that 21 00:01:50,280 --> 00:01:53,040 Speaker 3: the first one has to do with stabilization, which is 22 00:01:53,040 --> 00:01:59,400 Speaker 3: the current phase, and welcome the transition and then the 23 00:01:59,560 --> 00:02:04,600 Speaker 3: transition democracy. The thing is possi several of the order 24 00:02:05,240 --> 00:02:09,880 Speaker 3: possible to do other woman, you know, stabilization to be 25 00:02:09,919 --> 00:02:15,320 Speaker 3: done this way, and America, most countries in the Americans 26 00:02:15,720 --> 00:02:19,840 Speaker 3: that havefered and connecting you to suffer the like with 27 00:02:20,320 --> 00:02:25,280 Speaker 3: the encroachment of the hosts of twenty first century socialism 28 00:02:26,000 --> 00:02:31,400 Speaker 3: on the structures the mistake you see, they basically work 29 00:02:32,919 --> 00:02:41,000 Speaker 3: if they were, you know, under twenty first century socialism administrations, 30 00:02:41,040 --> 00:02:44,760 Speaker 3: and when they're not in the government, the aize and 31 00:02:44,800 --> 00:02:51,760 Speaker 3: then make me a part of sabotaging governments not the 32 00:02:51,800 --> 00:03:00,480 Speaker 3: ranks difficult set thinking that they could be another possible 33 00:03:00,520 --> 00:03:02,520 Speaker 3: way of managing. 34 00:03:02,040 --> 00:03:04,280 Speaker 1: The stabilization process. 35 00:03:05,840 --> 00:03:09,200 Speaker 3: Truly means not understanding the limits of reality as such. 36 00:03:09,520 --> 00:03:12,760 Speaker 3: So in my view, the work being done by the 37 00:03:12,880 --> 00:03:16,760 Speaker 3: United States is excellent and besides, I think it is working. 38 00:03:16,960 --> 00:03:23,240 Speaker 3: It's bearing fruit because we see that political also political 39 00:03:23,400 --> 00:03:27,400 Speaker 3: prisoners are being released, something we welcome and we also 40 00:03:28,000 --> 00:03:33,640 Speaker 3: hope they will finally release all of the political prisoners. 41 00:03:33,919 --> 00:03:38,640 Speaker 3: We are particularly concerned about the situation of Nowel Gajo 42 00:03:38,880 --> 00:03:44,320 Speaker 3: from Argentina. But as we see the positive evolution of 43 00:03:44,440 --> 00:03:47,120 Speaker 3: the situation, we are hopeful that Nowell will be able 44 00:03:47,160 --> 00:03:47,920 Speaker 3: to be with us again. 45 00:03:48,520 --> 00:03:51,040 Speaker 2: The reason why I asked you flew to Oslo to 46 00:03:51,240 --> 00:03:55,040 Speaker 2: support Maria Karina Machado when she won the Peace Prize, 47 00:03:55,320 --> 00:03:59,160 Speaker 2: and do you still support her to be or her 48 00:03:59,240 --> 00:04:06,480 Speaker 2: candidate Edmundo Gonzalez to be the president of Venezuela La. 49 00:04:08,320 --> 00:04:12,440 Speaker 3: The thing we need to understand is that of the 50 00:04:12,520 --> 00:04:21,679 Speaker 3: course of the stabilization process, any alternative, actually the course 51 00:04:21,760 --> 00:04:26,039 Speaker 3: of the regime indoors will make anything fail otherwise. So 52 00:04:26,120 --> 00:04:30,440 Speaker 3: the way I see it, the approach taken by the 53 00:04:30,520 --> 00:04:35,520 Speaker 3: United States to deal with the situation is the right 54 00:04:35,760 --> 00:04:39,599 Speaker 3: thing to do, the right way to go at this time. 55 00:04:39,839 --> 00:04:43,920 Speaker 3: And well, when it comes to rebuilding for democratic transition, 56 00:04:44,080 --> 00:04:47,000 Speaker 3: it will be the time to make perhaps other decisions 57 00:04:47,000 --> 00:04:51,479 Speaker 3: and see how progress can be made towards democratization in Venezuela. 58 00:04:51,960 --> 00:04:56,000 Speaker 1: I mean, of course, I do greatly appreciate. 59 00:04:55,480 --> 00:04:58,520 Speaker 3: And I'm fond of Maria Karina, who's a great friend 60 00:04:58,640 --> 00:05:00,960 Speaker 3: and fender of liberty. 61 00:05:01,000 --> 00:05:03,520 Speaker 1: But we need for this process to be successful. 62 00:05:04,160 --> 00:05:07,960 Speaker 3: We shouldn't be too hasty and as a result finally 63 00:05:07,960 --> 00:05:08,719 Speaker 3: going backwards. 64 00:05:08,880 --> 00:05:11,080 Speaker 2: And you still and you still talk with Machado and 65 00:05:11,120 --> 00:05:12,680 Speaker 2: you're still in contact with her. 66 00:05:14,480 --> 00:05:16,839 Speaker 1: Oh, yes, I'm in contact with her. We are friends. 67 00:05:17,160 --> 00:05:20,159 Speaker 2: Let's let's look at the economy. When we came here 68 00:05:20,720 --> 00:05:24,240 Speaker 2: last year, you had already bought inflation down from three 69 00:05:24,279 --> 00:05:27,599 Speaker 2: hundred percent to eighty percent. Now it's at thirty percent. 70 00:05:27,680 --> 00:05:30,599 Speaker 2: You've had a good year in terms of the trade deficit. 71 00:05:30,680 --> 00:05:34,640 Speaker 2: The economy is growing. There are two questions, though, always 72 00:05:34,640 --> 00:05:39,000 Speaker 2: come back, and the first is the currency. As you know, 73 00:05:39,160 --> 00:05:43,320 Speaker 2: you are a free marketeer. You believe in free, free currencies, 74 00:05:43,960 --> 00:05:48,200 Speaker 2: and the question is when will you let the paesot 75 00:05:48,240 --> 00:05:51,640 Speaker 2: go free and just be really clear, the peso going clear, 76 00:05:51,960 --> 00:05:53,160 Speaker 2: going free, doesn't you. 77 00:05:53,160 --> 00:05:55,640 Speaker 4: Have broadened the band. But a free. 78 00:05:55,400 --> 00:05:58,480 Speaker 2: Currency, you know as well as I do, means without 79 00:05:58,560 --> 00:06:00,640 Speaker 2: any controls or effect fans. 80 00:06:01,279 --> 00:06:04,040 Speaker 4: When is that going to happen? 81 00:06:05,000 --> 00:06:09,120 Speaker 3: In the first thing we need to understand is that 82 00:06:10,279 --> 00:06:13,800 Speaker 3: when you come into office and need to run a country, 83 00:06:13,880 --> 00:06:18,880 Speaker 3: it's not that if you start from scratch. You need 84 00:06:18,920 --> 00:06:24,440 Speaker 3: to obviously face history, and Argentina. 85 00:06:24,400 --> 00:06:26,760 Speaker 1: There's a very bad history on its shoulders. 86 00:06:26,880 --> 00:06:30,080 Speaker 3: Argentina has removed thirteen zeros from its currency. 87 00:06:30,160 --> 00:06:32,960 Speaker 1: He has had three hyperinflations without a war. 88 00:06:33,080 --> 00:06:39,039 Speaker 3: So there is a primary problem regarding the currency in Argentina. 89 00:06:39,960 --> 00:06:46,680 Speaker 3: That is the mechanism by which agent's economic agents expectations. 90 00:06:46,720 --> 00:06:51,000 Speaker 3: If we were to work with a traditional rational expectations 91 00:06:51,000 --> 00:06:54,440 Speaker 3: model like the one we've all studied. We have so 92 00:06:54,560 --> 00:06:58,120 Speaker 3: much celebrated Robert Lucas Jo so much so you know, 93 00:06:58,320 --> 00:07:04,720 Speaker 3: I've named two my four legged children after him, So 94 00:07:05,160 --> 00:07:10,760 Speaker 3: you can imagine. 95 00:07:08,279 --> 00:07:10,360 Speaker 2: Do they bark at you every day that you do 96 00:07:10,440 --> 00:07:21,760 Speaker 2: not set the currency free. 97 00:07:20,920 --> 00:07:21,520 Speaker 1: Because of that? 98 00:07:24,040 --> 00:07:28,080 Speaker 3: Besides, I have even much more liberal libertarian versus of me. 99 00:07:28,640 --> 00:07:30,840 Speaker 1: But I would like to note that. 100 00:07:32,840 --> 00:07:36,640 Speaker 3: The normal pressure and temperature conditions, so to speak, the 101 00:07:36,680 --> 00:07:40,200 Speaker 3: price level of the economy would be governed by the 102 00:07:40,720 --> 00:07:43,160 Speaker 3: money amount, and the exchange rate is one more price 103 00:07:43,200 --> 00:07:47,080 Speaker 3: in the economy. Strictly speaking, we have set the money amount. 104 00:07:47,200 --> 00:07:47,600 Speaker 1: This was. 105 00:07:49,520 --> 00:07:53,119 Speaker 3: In mid twenty twenty four, and what we are getting 106 00:07:53,160 --> 00:07:53,880 Speaker 3: to fear now. 107 00:07:54,000 --> 00:07:56,160 Speaker 1: Is the effect, the. 108 00:07:56,240 --> 00:07:59,920 Speaker 3: Hangover effect after the monetary disaster of the previous administration 109 00:08:00,480 --> 00:08:05,400 Speaker 3: printed money in an amount of twenty eight percent of 110 00:08:05,600 --> 00:08:08,520 Speaker 3: a GDP, and all the more so during the last 111 00:08:08,600 --> 00:08:10,679 Speaker 3: few months before they left office to win the election. 112 00:08:10,800 --> 00:08:15,320 Speaker 3: You know, this is the sort of sequence that prices 113 00:08:15,360 --> 00:08:17,440 Speaker 3: follow that I'm going to explain. Let's suppose you have 114 00:08:17,800 --> 00:08:20,720 Speaker 3: a fall in money demand that leads to a leap 115 00:08:20,760 --> 00:08:23,000 Speaker 3: in the exchange rate, and that leads to an increase 116 00:08:23,040 --> 00:08:26,600 Speaker 3: in the price of tradables, then in wholesale prices, then 117 00:08:26,720 --> 00:08:33,560 Speaker 3: retail prices, and then wages. Of course, you have spent 118 00:08:33,600 --> 00:08:36,120 Speaker 3: almost ninety years with that sort of dynamic. It's quite 119 00:08:36,200 --> 00:08:39,000 Speaker 3: likely that people will think that if the exchange rate 120 00:08:39,360 --> 00:08:40,120 Speaker 3: goes up, then. 121 00:08:40,040 --> 00:08:42,120 Speaker 1: The prices will go to So. 122 00:08:42,120 --> 00:08:48,200 Speaker 3: I won't get angry because of the way people form 123 00:08:48,440 --> 00:08:51,640 Speaker 3: their expectations, because I mean that being proven right for 124 00:08:51,760 --> 00:08:56,880 Speaker 3: ninety years. Look, what we are trying to do is 125 00:08:58,120 --> 00:09:00,920 Speaker 3: that you have to understand that people can build expectations 126 00:09:00,960 --> 00:09:04,120 Speaker 3: that way, and we understand that volatility in the exchange 127 00:09:04,200 --> 00:09:10,120 Speaker 3: rate can translate into price volatility. Let's suppose you have 128 00:09:10,360 --> 00:09:15,160 Speaker 3: a change in relative prices and tradeables become more expensive, 129 00:09:17,240 --> 00:09:21,400 Speaker 3: perhaps there's a deterioration in the terms of trade, and 130 00:09:21,440 --> 00:09:22,640 Speaker 3: the exchange rate goes up. 131 00:09:23,040 --> 00:09:26,240 Speaker 1: What will happen? Then prices will go up. 132 00:09:26,960 --> 00:09:30,000 Speaker 3: So you will see the mismatch between the price level 133 00:09:30,160 --> 00:09:34,120 Speaker 3: and the money amount and the economy will into recession. 134 00:09:34,120 --> 00:09:37,319 Speaker 3: We understand the problem of volatility, so the exchange rate 135 00:09:37,360 --> 00:09:38,679 Speaker 3: within the band is free. 136 00:09:38,800 --> 00:09:39,400 Speaker 1: It is free. 137 00:09:39,760 --> 00:09:45,000 Speaker 3: Within the band, it is free. And the bands only 138 00:09:45,080 --> 00:09:51,160 Speaker 3: serve the purpose show the people that the change rate 139 00:09:52,000 --> 00:09:56,000 Speaker 3: will not just any change rate, so then they learn 140 00:09:56,280 --> 00:09:59,040 Speaker 3: how to flow and they lose the fear. 141 00:09:59,760 --> 00:10:02,880 Speaker 1: So that a rule of bands to limit the motility. 142 00:10:02,960 --> 00:10:05,240 Speaker 2: But when when do you do you think this year 143 00:10:05,320 --> 00:10:07,640 Speaker 2: you will be able to say you have learnt, you 144 00:10:07,679 --> 00:10:10,240 Speaker 2: have discovered what them you know that freedom is like. 145 00:10:10,800 --> 00:10:13,920 Speaker 2: Now try it properly and float. Let's float the pesto. 146 00:10:15,960 --> 00:10:16,760 Speaker 2: What is the timing? 147 00:10:20,640 --> 00:10:25,800 Speaker 3: From my point of view, that will be when we've 148 00:10:25,800 --> 00:10:29,840 Speaker 3: finally cleaned up the money overhang. We have had this 149 00:10:30,080 --> 00:10:36,720 Speaker 3: money overhand, the hangover previous monetary policy, also due to 150 00:10:36,840 --> 00:10:39,320 Speaker 3: the capital controls that were put in place in the past, 151 00:10:39,679 --> 00:10:44,760 Speaker 3: and also as a result of the price control. Since 152 00:10:44,960 --> 00:10:48,439 Speaker 3: we have set and fixed the money amount and we 153 00:10:48,559 --> 00:10:53,400 Speaker 3: only now print against you demand, at one point local 154 00:10:53,480 --> 00:10:56,520 Speaker 3: inflation will converge towards international. 155 00:10:56,000 --> 00:10:58,080 Speaker 1: Levels, which means that at that. 156 00:10:57,960 --> 00:11:00,920 Speaker 3: Point you have managed to clean up the money overhang 157 00:11:01,000 --> 00:11:02,959 Speaker 3: and will be in a position to let the best 158 00:11:03,000 --> 00:11:04,880 Speaker 3: of lord freely without any. 159 00:11:04,720 --> 00:11:06,679 Speaker 1: Sort of trouble, because. 160 00:11:06,640 --> 00:11:08,760 Speaker 3: Along the way the agents would have learned. And if 161 00:11:08,760 --> 00:11:11,520 Speaker 3: there's extame great volatility and they want to translate that 162 00:11:11,679 --> 00:11:13,640 Speaker 3: into the domestic prices. 163 00:11:13,200 --> 00:11:17,360 Speaker 1: They will have to face worse face. They will have 164 00:11:17,520 --> 00:11:18,760 Speaker 1: no demand and will. 165 00:11:18,600 --> 00:11:20,520 Speaker 4: Have the other big test. 166 00:11:20,600 --> 00:11:23,160 Speaker 2: And you know, it's a fairly simple question, is the 167 00:11:23,200 --> 00:11:28,960 Speaker 2: international loan markets. You have raised money at home domestically, 168 00:11:29,440 --> 00:11:32,559 Speaker 2: but as you know very well the last when your 169 00:11:32,559 --> 00:11:36,120 Speaker 2: predecessor defaulted on the foreign bonds, and so the question 170 00:11:36,240 --> 00:11:40,560 Speaker 2: is very specific, when will you go and raise money 171 00:11:40,840 --> 00:11:43,600 Speaker 2: in New York or outside Argentina. 172 00:11:46,600 --> 00:11:52,480 Speaker 1: In rigor well, strictly speaking, you know, raising money. 173 00:11:55,240 --> 00:11:58,840 Speaker 3: We should need would just be to roll over as 174 00:11:58,840 --> 00:12:03,240 Speaker 3: a general framework, because Argentina has zero deficit. In fact, 175 00:12:03,400 --> 00:12:08,040 Speaker 3: the amount related to interest is paid by Argentina out 176 00:12:08,040 --> 00:12:08,720 Speaker 3: of surplus. 177 00:12:08,720 --> 00:12:09,520 Speaker 1: That's the first point. 178 00:12:09,920 --> 00:12:14,880 Speaker 3: And through the text Innocence Act, we hope to really 179 00:12:15,040 --> 00:12:23,400 Speaker 3: boost and develop the domestic capital market. Therefore, our need 180 00:12:23,760 --> 00:12:29,679 Speaker 3: to resort to funds in foreign markets will build be. 181 00:12:29,960 --> 00:12:30,560 Speaker 1: Less or less. 182 00:12:30,559 --> 00:12:33,560 Speaker 3: In the worst of cases, perhaps we would only be 183 00:12:33,640 --> 00:12:40,960 Speaker 3: going out to international markets to secure the rollover. And besides, 184 00:12:41,760 --> 00:12:48,880 Speaker 3: given Argentina's fundamentals. We think that paying a surplus rate 185 00:12:49,360 --> 00:12:52,800 Speaker 3: or with country risk at five hundred and fifty basis points, 186 00:12:52,800 --> 00:12:56,559 Speaker 3: we think that is clearly not in line with our fundamentals. 187 00:12:56,600 --> 00:13:03,680 Speaker 3: So since now we have a very low debt to 188 00:13:03,760 --> 00:13:06,960 Speaker 3: GDP ration, because most of the debt is within the 189 00:13:07,000 --> 00:13:12,120 Speaker 3: public sector and we have achieved fiscal equilibrium, we will 190 00:13:12,160 --> 00:13:16,959 Speaker 3: need less and less access to capital markets aside from 191 00:13:16,960 --> 00:13:19,960 Speaker 3: the rollover, and with the development of the local market, 192 00:13:20,440 --> 00:13:23,960 Speaker 3: will be able to pay and bring down the exposure. 193 00:13:24,400 --> 00:13:28,720 Speaker 3: It's not something that, given our fastal performance, should be 194 00:13:28,800 --> 00:13:32,280 Speaker 3: a great concern. I would be worried not to have you. 195 00:13:32,320 --> 00:13:36,000 Speaker 2: Got last year you famously got a twenty billion dollar 196 00:13:36,040 --> 00:13:39,000 Speaker 2: swap line from the US, A big success when you 197 00:13:39,120 --> 00:13:39,520 Speaker 2: got it. 198 00:13:39,960 --> 00:13:43,160 Speaker 4: Scott Besson's the Treasury sectuory said that. 199 00:13:43,440 --> 00:13:47,360 Speaker 2: You had committed to put it to getting China out 200 00:13:47,360 --> 00:13:50,280 Speaker 2: of Argentina. And you have always been very critical of China. 201 00:13:50,440 --> 00:13:53,240 Speaker 2: But as you know, China still has a space station 202 00:13:53,800 --> 00:13:57,040 Speaker 2: in Argentina, you still have a swap line with China. 203 00:13:57,600 --> 00:14:02,480 Speaker 2: What does getting China out of Argentina mean to you? 204 00:14:06,880 --> 00:14:13,080 Speaker 3: In my view, what Vessince said is well in line 205 00:14:13,200 --> 00:14:18,200 Speaker 3: with the thinking of the United States administration. And this 206 00:14:18,280 --> 00:14:21,240 Speaker 3: is a matter of related to geopolitics. The United States 207 00:14:21,320 --> 00:14:24,440 Speaker 3: does trade with China, and the way we see it, 208 00:14:24,560 --> 00:14:28,560 Speaker 3: China is a great trading partner. It means a lot 209 00:14:28,600 --> 00:14:32,960 Speaker 3: of opportunities for US to expand markets. So that is 210 00:14:33,200 --> 00:14:39,240 Speaker 3: not any source of conflict when the geopolitical time comes. 211 00:14:39,400 --> 00:14:41,480 Speaker 1: Do you have any doubts China stands? 212 00:14:42,280 --> 00:14:46,200 Speaker 2: China doesn't have China doesn't have a space station in 213 00:14:46,240 --> 00:14:48,840 Speaker 2: the United States. The last time I checked, it does 214 00:14:48,880 --> 00:14:53,640 Speaker 2: have a space station in Argentina. 215 00:14:54,240 --> 00:14:55,600 Speaker 1: Well, that's not proven. 216 00:14:55,920 --> 00:15:01,800 Speaker 4: That China doesn't. I will I will ask President Trump 217 00:15:01,840 --> 00:15:03,760 Speaker 4: whether the Chinese have a space station there. 218 00:15:04,000 --> 00:15:06,560 Speaker 2: But if you but in general, you know when you 219 00:15:06,600 --> 00:15:09,000 Speaker 2: were when you were a candidate, were very were very 220 00:15:09,000 --> 00:15:09,440 Speaker 2: in critical. 221 00:15:11,560 --> 00:15:18,640 Speaker 1: But let's put it this way. 222 00:15:19,360 --> 00:15:22,680 Speaker 3: I'm present for forty seven and a half million Argenties, 223 00:15:22,720 --> 00:15:25,840 Speaker 3: and I make the decisions that best favor the interests 224 00:15:25,840 --> 00:15:28,400 Speaker 3: of the Argentine people. So part of that is the 225 00:15:28,440 --> 00:15:30,960 Speaker 3: fact that Argentina, which is a very close country, the 226 00:15:30,960 --> 00:15:34,640 Speaker 3: most closed country in the world. Given its GDP per capita, 227 00:15:35,040 --> 00:15:39,920 Speaker 3: Argentina should have a trade to GDP ratio of a 228 00:15:39,960 --> 00:15:43,880 Speaker 3: little over ninety percent, and it only has ninety thirty. Sorry, 229 00:15:44,160 --> 00:15:48,280 Speaker 3: strictly speaking twenty eight if you want to be accurate. Consequently, 230 00:15:49,120 --> 00:15:52,840 Speaker 3: me plan is my plan is to open up to 231 00:15:53,120 --> 00:15:57,760 Speaker 3: the EU, to after to the United States, and to China. 232 00:15:58,000 --> 00:16:01,480 Speaker 3: I want an open economy and if you look at 233 00:16:01,480 --> 00:16:05,680 Speaker 3: the weight of the Chinese economy in the world, you 234 00:16:05,680 --> 00:16:08,520 Speaker 3: will understand that I need to trade with China. Or 235 00:16:08,560 --> 00:16:11,640 Speaker 3: looking at the evolution of India, I need to trade 236 00:16:11,640 --> 00:16:16,320 Speaker 3: with India. And that's what I'm working on to make 237 00:16:16,480 --> 00:16:18,320 Speaker 3: Argentina definitely a more country. 238 00:16:18,720 --> 00:16:20,960 Speaker 2: On the subject trade agreements, you have a trade agreement 239 00:16:21,120 --> 00:16:28,120 Speaker 2: with the US, When do you expect that to be signed? 240 00:16:25,920 --> 00:16:31,160 Speaker 3: As ready to sign. 241 00:16:31,280 --> 00:16:34,200 Speaker 1: We are working on the fine detail. We will have 242 00:16:34,240 --> 00:16:34,760 Speaker 1: good news. 243 00:16:34,800 --> 00:16:37,720 Speaker 2: And the other the other one is MRCASOOR, which I 244 00:16:37,720 --> 00:16:40,560 Speaker 2: remember you were somewhat critical of, But that is the 245 00:16:40,600 --> 00:16:44,080 Speaker 2: Southern American Trading Block, which I know you think could 246 00:16:44,160 --> 00:16:46,600 Speaker 2: be even freer than it is. But it's just done 247 00:16:46,640 --> 00:16:50,520 Speaker 2: a deal with the European Union, which I think you support. 248 00:16:50,720 --> 00:16:53,600 Speaker 2: But do you worry about the effect that could have 249 00:16:53,640 --> 00:16:57,800 Speaker 2: on Argentine industry or when when it opens up the 250 00:16:57,840 --> 00:16:58,760 Speaker 2: field with Europe. 251 00:17:03,200 --> 00:17:08,440 Speaker 3: People know when you design policy, and that was the 252 00:17:08,440 --> 00:17:12,639 Speaker 3: central pill my presentation. Yes, in my address INDs you 253 00:17:12,640 --> 00:17:17,440 Speaker 3: you see you're design based on ethical and moral values me, 254 00:17:17,960 --> 00:17:26,159 Speaker 3: So please explain to me why you would justify a 255 00:17:26,200 --> 00:17:30,480 Speaker 3: situation where Argentis and most Argentis need to pay more 256 00:17:30,560 --> 00:17:34,560 Speaker 3: for goods they could get more cheaply. Because it's false 257 00:17:34,600 --> 00:17:37,560 Speaker 3: that that also destroys jobs. That's one of the big 258 00:17:38,040 --> 00:17:44,639 Speaker 3: lines of Keynesian economies, who are actually ruining the whole 259 00:17:44,680 --> 00:17:46,480 Speaker 3: planet whatever they touch a break. 260 00:17:48,280 --> 00:17:53,000 Speaker 1: When you open up the economy, products that will be 261 00:17:53,119 --> 00:17:57,960 Speaker 1: cheap lose jobs. 262 00:17:58,080 --> 00:18:02,639 Speaker 3: Here, let's individual we spend less money. For example, now 263 00:18:02,720 --> 00:18:05,040 Speaker 3: Argentina used to pay forty dollars for a T shirt, 264 00:18:05,080 --> 00:18:09,800 Speaker 3: where it's actually only five dollars. And the money you 265 00:18:10,000 --> 00:18:13,240 Speaker 3: say you will spend elsewhere in another sector, you will 266 00:18:13,280 --> 00:18:17,000 Speaker 3: create jobs in another economic sector that people are interested in, 267 00:18:17,040 --> 00:18:18,919 Speaker 3: and this will lead to high productivities. So when you 268 00:18:19,000 --> 00:18:22,560 Speaker 3: open up the economy, you will see a reallocation of resources, 269 00:18:22,760 --> 00:18:26,439 Speaker 3: but there will be productivity against due to greater division 270 00:18:26,480 --> 00:18:31,520 Speaker 3: of labor and higher specializations. Otherwise, if the protectionist argument 271 00:18:31,600 --> 00:18:35,719 Speaker 3: were true, one day would decide to close up Argentina. 272 00:18:36,400 --> 00:18:40,120 Speaker 3: I will borrow an example from my brilliant ecent wonderful 273 00:18:40,160 --> 00:18:44,240 Speaker 3: deregulation minister. That's taken from one of his books. I 274 00:18:44,320 --> 00:18:46,040 Speaker 3: used to read them. I used to always be a 275 00:18:46,040 --> 00:18:50,359 Speaker 3: big fan of Frederica Stutzenega. So he said, okay, so 276 00:18:50,920 --> 00:18:56,080 Speaker 3: let's close up Argentina and then narrow it to the 277 00:18:56,119 --> 00:19:00,840 Speaker 3: province of Buenos Aires, and then further down to the 278 00:19:00,840 --> 00:19:03,280 Speaker 3: city of Bonozees and then to Palermo, which is just 279 00:19:03,320 --> 00:19:03,760 Speaker 3: one dission. 280 00:19:03,880 --> 00:19:06,439 Speaker 1: Then it will be just a couple of blocks. The 281 00:19:06,520 --> 00:19:09,680 Speaker 1: end results of this will be full autarchy. You will 282 00:19:09,800 --> 00:19:12,480 Speaker 1: live yourself. What will your life be like? 283 00:19:12,680 --> 00:19:15,239 Speaker 3: Miserable because you'll have to make your own shoes, your 284 00:19:15,280 --> 00:19:17,200 Speaker 3: own your own. 285 00:19:17,080 --> 00:19:19,560 Speaker 1: Ties, your own shirt. How do you think you're going 286 00:19:19,640 --> 00:19:20,080 Speaker 1: to live? 287 00:19:22,640 --> 00:19:27,200 Speaker 3: Trade creates a division of labor that leads to increasing returns, 288 00:19:27,480 --> 00:19:30,560 Speaker 3: leads to productivity gains, and to well being. This is 289 00:19:30,600 --> 00:19:34,359 Speaker 3: why more open countries, and it's the most close countries 290 00:19:34,359 --> 00:19:35,480 Speaker 3: I want a lot to do. 291 00:19:36,200 --> 00:19:38,280 Speaker 2: That was a very eloquent defense of free trade, which 292 00:19:38,280 --> 00:19:40,760 Speaker 2: I should point out very not enough other people do. 293 00:19:41,200 --> 00:19:44,480 Speaker 2: But next door to you have Brazil, where I think 294 00:19:44,600 --> 00:19:46,360 Speaker 2: it'd be fair to say there is a much more 295 00:19:46,400 --> 00:19:51,240 Speaker 2: Canesian approach. With your friend or not that friend, President Lula. 296 00:19:51,400 --> 00:19:56,440 Speaker 2: He's up for election this year. What mending that relationship 297 00:19:56,680 --> 00:19:59,520 Speaker 2: with Brazil? Is that a priority? Or do you your 298 00:19:59,560 --> 00:20:07,560 Speaker 2: dogs a spark every time you mentioned him? 299 00:20:07,720 --> 00:20:09,639 Speaker 4: Are you going to call one of your dogs Lula. 300 00:20:13,160 --> 00:20:19,240 Speaker 3: I would never call my dog anything left wing. I 301 00:20:19,280 --> 00:20:24,280 Speaker 3: really love my dogs too much to consult. This is 302 00:20:24,320 --> 00:20:28,800 Speaker 3: why they have all been named after liberally to Murray, 303 00:20:29,400 --> 00:20:33,760 Speaker 3: Milton from Milton Friedman, Robert, Robert j and Robert again 304 00:20:33,840 --> 00:20:37,760 Speaker 3: for Robert ter and Conan, which is the barbarian warrior. 305 00:20:38,080 --> 00:20:39,520 Speaker 1: That's the original dogs. 306 00:20:39,880 --> 00:20:43,760 Speaker 3: But apart from that, we have an adult relationship. I mean, 307 00:20:44,480 --> 00:20:50,320 Speaker 3: this is not some kind of ideological paper based battle. 308 00:20:51,000 --> 00:20:51,560 Speaker 1: In the middle. 309 00:20:51,600 --> 00:20:55,440 Speaker 3: We have the lives of millions of human beings. So 310 00:20:55,880 --> 00:21:03,119 Speaker 3: we continue to advance. But we have really given a 311 00:21:03,240 --> 00:21:06,639 Speaker 3: lot of a boost to workers for it to be 312 00:21:06,680 --> 00:21:11,119 Speaker 3: more flexible and dynamic. Signing the deal with it, you 313 00:21:11,320 --> 00:21:14,000 Speaker 3: took twenty five years time. That's a very long time 314 00:21:14,320 --> 00:21:16,760 Speaker 3: and the world of today needs more speed. It needs 315 00:21:16,800 --> 00:21:19,040 Speaker 3: to move faster. So this is why we have also 316 00:21:19,160 --> 00:21:22,000 Speaker 3: encouraged working with a lot more flexibility. 317 00:21:22,359 --> 00:21:25,800 Speaker 1: We need to adapt. This is not a matter. 318 00:21:27,720 --> 00:21:31,840 Speaker 3: Whatever suits the bureaucrats, you know, those who just take 319 00:21:31,920 --> 00:21:37,240 Speaker 3: up seed space and collect tons of dollars in order 320 00:21:37,280 --> 00:21:40,680 Speaker 3: to do nothing, because again for a bureaucrat, the results 321 00:21:41,200 --> 00:21:45,159 Speaker 3: means nothing and the process is everything, and people. 322 00:21:44,920 --> 00:21:48,600 Speaker 1: Need results, so we work in order to generate results. 323 00:21:49,600 --> 00:21:52,919 Speaker 3: So whatever trade we will do, I will not be 324 00:21:52,960 --> 00:21:56,480 Speaker 3: breaking anything. Whatever helps gain more trade I will do. 325 00:21:58,320 --> 00:22:01,760 Speaker 3: And if other countries decide to take other decision as 326 00:22:01,800 --> 00:22:03,399 Speaker 3: well as those sommon, it's up to them to do 327 00:22:03,440 --> 00:22:06,720 Speaker 3: whatever they please. I work for the well being of 328 00:22:06,760 --> 00:22:08,959 Speaker 3: the forty seven point Latin America. 329 00:22:09,040 --> 00:22:11,159 Speaker 2: When you when we first met, you know, you were 330 00:22:11,480 --> 00:22:13,840 Speaker 2: you were a sole voice on the right, if we 331 00:22:13,880 --> 00:22:15,320 Speaker 2: call it that way. 332 00:22:15,680 --> 00:22:16,320 Speaker 4: Since then, I. 333 00:22:18,480 --> 00:22:22,119 Speaker 3: Was more lonely than Adam on Mother's Day. I have 334 00:22:22,200 --> 00:22:23,200 Speaker 3: had a few friends. 335 00:22:24,480 --> 00:22:25,320 Speaker 1: Yes, that's very good. 336 00:22:25,359 --> 00:22:31,720 Speaker 2: Parallel Chilean Since then Chilean Bolivia. Do you have two friends? 337 00:22:31,920 --> 00:22:35,240 Speaker 1: And then Kane of course yes, no. 338 00:22:35,200 --> 00:22:37,359 Speaker 2: And then but then you have Chilean Bolivia. Now you 339 00:22:37,400 --> 00:22:41,080 Speaker 2: have we do have elections in Colombia and Brazil. Have 340 00:22:41,200 --> 00:22:43,800 Speaker 2: you identified people there who you want to support to 341 00:22:43,920 --> 00:22:46,119 Speaker 2: carry on the same kind of wave of reforms that 342 00:22:46,160 --> 00:22:53,320 Speaker 2: you would hope to see change in Latin America. 343 00:22:52,760 --> 00:22:57,920 Speaker 3: The decision you didn't say It is up to every 344 00:22:57,960 --> 00:23:03,119 Speaker 3: people who decide want to follow the socialism. You know, 345 00:23:03,800 --> 00:23:07,320 Speaker 3: Thomas soul said, you know what is the best thing 346 00:23:07,359 --> 00:23:10,600 Speaker 3: about socialism that it sounds nice, but you know what 347 00:23:10,640 --> 00:23:14,920 Speaker 3: the problem is, it always fails. So each society will 348 00:23:15,000 --> 00:23:18,679 Speaker 3: awaken to the light of the ideas of freedom whenever 349 00:23:18,720 --> 00:23:22,240 Speaker 3: it can, and I'm optimistic that they will become aware 350 00:23:22,240 --> 00:23:24,200 Speaker 3: that the best thing that you can do is espouse 351 00:23:24,240 --> 00:23:28,720 Speaker 3: the ideas of freedom. And we can exemplify this with Argentina. 352 00:23:30,240 --> 00:23:34,320 Speaker 3: We had inflation increasing one percent a day, so we 353 00:23:34,320 --> 00:23:39,879 Speaker 3: were headed to seventeen thousand percent. We halted fiscal deficit, 354 00:23:39,960 --> 00:23:43,320 Speaker 3: which was five percent of GDP in the treasury. 355 00:23:43,359 --> 00:23:45,240 Speaker 1: We halted that in the first month. 356 00:23:45,520 --> 00:23:48,760 Speaker 3: It would have seemed impossible, but it was not impossible 357 00:23:48,760 --> 00:23:52,119 Speaker 3: for the world's best economy minister Totokaputo and the best 358 00:23:52,280 --> 00:23:53,840 Speaker 3: minister we've ever had in our history. 359 00:23:54,119 --> 00:23:54,920 Speaker 1: In only six. 360 00:23:54,760 --> 00:23:58,640 Speaker 3: Months time, we fixed the CAUSI fiscal deficit and we 361 00:23:58,840 --> 00:24:03,800 Speaker 3: also stopped the money amount of the printing money. Now 362 00:24:03,840 --> 00:24:08,040 Speaker 3: we are looking at twenty four twenty five, depending on whether. 363 00:24:07,800 --> 00:24:09,560 Speaker 1: You take the wholesale rate. 364 00:24:10,560 --> 00:24:15,400 Speaker 3: So everyone was predicting a hyper recession, but Argentina reached 365 00:24:15,440 --> 00:24:18,120 Speaker 3: a floor in April and then started to grow strongly. 366 00:24:18,320 --> 00:24:20,920 Speaker 3: The latest figures show the economy growing at four point 367 00:24:20,960 --> 00:24:24,040 Speaker 3: two percent. We have lifted thirty percent of the population 368 00:24:24,119 --> 00:24:27,400 Speaker 3: out of poverty. Fifteen million people have been lifted out 369 00:24:27,400 --> 00:24:27,960 Speaker 3: of policy. 370 00:24:28,600 --> 00:24:32,959 Speaker 1: What does this mean? The free market works. 371 00:24:33,080 --> 00:24:39,000 Speaker 3: That free market capitalism, and those are the fundamentals I 372 00:24:39,040 --> 00:24:43,520 Speaker 3: referred to yesterday in my Doubles address. Free enterprise capitalism 373 00:24:44,280 --> 00:24:48,720 Speaker 3: is not only just an efficient, but it also lets 374 00:24:48,760 --> 00:24:50,080 Speaker 3: they call me grow moss. 375 00:24:50,440 --> 00:24:52,760 Speaker 1: And when you design. 376 00:24:53,119 --> 00:24:56,199 Speaker 3: Policies on the basis of ethical and moral values, the 377 00:24:56,200 --> 00:24:57,800 Speaker 3: Western values. 378 00:24:59,160 --> 00:25:00,480 Speaker 1: Thrive, and. 379 00:25:02,200 --> 00:25:06,720 Speaker 3: You also enjoy social consensus because you're doing what is just, 380 00:25:06,880 --> 00:25:13,840 Speaker 3: what is fair. One of the things is that justice 381 00:25:13,880 --> 00:25:18,160 Speaker 3: on the order of efficiency, whether it be Parito efficiency 382 00:25:18,560 --> 00:25:23,119 Speaker 3: or the efficiency of Machiavelli's political calculus. This is why 383 00:25:23,200 --> 00:25:25,440 Speaker 3: I said yesterday that Machiavelli is dead and we need 384 00:25:25,440 --> 00:25:27,639 Speaker 3: to bury him, because what we are proving is that 385 00:25:27,720 --> 00:25:31,040 Speaker 3: when you design policies on the basis of ethical and 386 00:25:31,080 --> 00:25:33,679 Speaker 3: moral valids, and when you do what is just, not 387 00:25:34,280 --> 00:25:38,000 Speaker 3: what best suits the political. 388 00:25:37,800 --> 00:25:40,280 Speaker 1: Rubbish people who work. 389 00:25:40,160 --> 00:25:43,959 Speaker 3: On the basis of political speculation, that's how you gain support. 390 00:25:44,000 --> 00:25:46,840 Speaker 3: We got forty one percent of the vote, a seventeen 391 00:25:47,040 --> 00:25:50,840 Speaker 3: percent lead over Kirtonism, which in a general presidential lection 392 00:25:51,040 --> 00:25:53,280 Speaker 3: would mean winning on the first round. At the latest 393 00:25:53,320 --> 00:25:59,240 Speaker 3: service show that sixty two percent of Argentine's support free 394 00:25:59,280 --> 00:26:00,000 Speaker 3: market economy. 395 00:26:01,320 --> 00:26:03,120 Speaker 1: It works and it is. 396 00:26:03,080 --> 00:26:07,040 Speaker 2: Only There are many things that you can defeat, but 397 00:26:07,080 --> 00:26:09,480 Speaker 2: one of them, perhaps the most socialist things of all, 398 00:26:09,680 --> 00:26:11,800 Speaker 2: is time, and we have sadly run out of it. 399 00:26:12,480 --> 00:26:15,600 Speaker 2: Thank you very very much for talking to us. Please, 400 00:26:15,680 --> 00:26:18,080 Speaker 2: can you all we have to get present Milly out 401 00:26:18,160 --> 00:26:20,720 Speaker 2: very quickly, so can you stay in your stay in 402 00:26:20,800 --> 00:26:22,760 Speaker 2: your seats, and then we will go out. 403 00:26:23,000 --> 00:26:24,960 Speaker 4: Thank you. 404 00:26:24,200 --> 00:26:24,760 Speaker 1: People are saying