Argentine Business Has 4 Years to Wean Itself Off Protectionism

  • Government plans to open up trade to world gradually: Prat-Gay
  • Argentina can teach world about protectionism, populism

Argentine President Mauricio Macri is giving his country’s businessmen four years to wean themselves off decades of protectionist policies before leaving them to fend for themselves, his finance minister said.

Since taking office in December, the government has chosen to lift subsidies and import restrictions gradually in order to give local businesses time to adapt, Alfonso Prat-Gay told reporters in Buenos Aires.

“We’re giving Argentine businessmen four years to go to the gym, train, prepare themselves so that in four years they can go out to the ring,” Prat-Gay said. “We’re going from a closed and subsidized economy to a competitive economy, but in contrast to previous attempts” we can’t bankrupt the industries we are trying to make more efficient.

Macri took office in December vowing to unwind his predecessor’s protectionist policies and reinsert Argentina into the world economy after more than a decade of isolation. Those changes will be made gradually though to ease the impact on employment and poverty, Prat-Gay said. Argentina will continue to subsidize oil prices for the rest of the year as it seeks to protect the oil industry, he said.

Argentina’s experience with protectionism and populism could be a lesson for the world as Donald Trump challenges for the presidency of the U.S. and after the U.K. voted to leave the European Union, Prat-Gay said.

“The G-20 has always worried about protectionism, and now you can add concerns about populism and that’s where we have a doctorate that we can offer,” he said. “The world is threatened by populism and protectionism just as Argentina finds itself at the opposite end of the cycle.”

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