Federico Sturzenegger in conversation with Ann Bernstein
- In this CDE Conversations with executive director Ann Bernstein, Argentina’s Minister of Deregulation and State Transformation, Federico Sturzenegger reflected on President Milei’s first year in office and the radical economic reforms being introduced to rescue the country from years of mismanagement and economic stagnation.
- When President Milei took office, he prioritised fiscal consolidation and deregulation as the state was spending far more than the income it took in and financed revenue shortfalls by printing money and restructuring its debt.
- Sturzenegger outlined how his team systematically reviewed Argentina’s legal framework, repealing outdated and unhelpful laws and decrees, removed bureaucratic obstacles to private investment, and eliminated government functions better handled by the private sector.
- He argued that Argentina has been held back by entrenched, powerful interest groups—unions, big business, and the political elite – who safeguard their interests through a phenomenon he describes as a ‘Bermuda Triangle of vested interests’.
- Having successfully turned around two important state-owned companies, Sturzenegger argued that state-owned enterprises are inherently inefficient due to unclear ownership and misaligned incentives, leading to corruption and waste.
- Despite fears that austerity measures would trigger a long recession, the budget surplus, cooling inflation and a more positive environment for investment has led to rapid economic growth and millions of people moving out of poverty.
