BTN News: Amid rising political tensions and strategic maneuvering, Argentina’s government is experiencing a significant reshuffle, particularly within the energy sector. With Santiago Caputo, a key advisor to President Javier Milei, playing a prominent role, several public companies, including Enarsa and Na-Sa, are seeing drastic changes in leadership. The moves signal a push toward privatization and cost-cutting, aligned with the libertarian economic vision of Milei’s administration. As these shifts unfold, they reflect deeper power dynamics and policy shifts that could reshape the country’s public enterprises and fiscal future.
Caputo’s Influence Expands: A New Leadership at Enarsa
Santiago Caputo, Milei’s closest advisor and member of his inner circle, has solidified his influence across the energy sector. This week, Eduardo Rodríguez Chirillo, Argentina’s Secretary of Energy, ordered a sweeping change in Enarsa, the state-owned energy company managing the largest portion of public funds. The announcement detailed a reshuffle that will see Juan Doncel replaced as President by Tristán Socas, with Federico Márquez and Diego Zabala joining as new directors.
This move, orchestrated by Santiago’s brother Francisco Caputo, reveals the increasing involvement of the Caputo family in state affairs. Sources indicate that Francisco played a critical role in the recruitment of the new leadership, underlining a trend where state staffing is increasingly influenced by family ties.
Privatization on the Horizon: Nuclear Plants in the Crosshairs
The latest changes in Enarsa are just part of a broader strategy under Milei’s administration to privatize public assets. Alberto Lamagna, a scientist with political experience across previous administrations, has been appointed President of Na-Sa, the state company that manages Argentina’s nuclear power plants. His arrival follows the dismissal of Julián Gadano, a former official under Mauricio Macri, suggesting a pivot towards Milei’s privatization goals.
Critics argue that Lamagna has promised to privatize the country’s nuclear plants within months, aligning with Milei’s vision of reducing state involvement in unprofitable enterprises. The stakes are high; the Atucha I nuclear plant, requiring a $300 million renewal to extend its operational life, exemplifies the expensive burden on the state budget.
Turbulence Within the Ranks: Rodríguez Chirillo Faces a Power Struggle
For Rodríguez Chirillo, the Secretary of Energy, these changes mark another challenge in an ongoing struggle for control. Once a key ally of Milei, Chirillo’s influence has waned as Santiago Caputo’s authority grows. Despite the reshuffle at Enarsa, Chirillo remains optimistic. He aims to retain some control by positioning Juan Doncel, his close associate, as General Manager of Enarsa, hoping to continue influencing the company’s operations.
Moreover, the appointment of Daniel González, a figure aligned with Caputo, as the Energy Coordinator further complicates Chirillo’s position. However, he chooses to see the glass half full, describing their collaboration as a “double five” in the energy sector, suggesting a complementary partnership rather than a power struggle.
Milei’s Broader Economic Vision: Cutting State Losses
President Milei’s strategy is clear: minimize state losses and steer Argentina toward a more balanced budget. This approach was evident in his recent address, where he presented a budget aimed at achieving a surplus for the coming year. This aggressive push for fiscal discipline is echoed across his administration, with Caputo’s team leading efforts to reduce the state’s financial burdens by restructuring or privatizing state enterprises.
Related Moves in the Public Sector: Free Market Principles at Play
Beyond energy, other sectors are also feeling the impact of Milei’s economic reforms. Federico Sturzenegger, formerly of the Central Bank under Macri, has introduced new rules allowing public entities more freedom in procurement. No longer are they required to use state-run services like Aerolíneas Argentinas or YPF, signaling a shift towards free-market principles in government operations.
The decision to outsource currency printing abroad, even excluding Argentina’s own Casa de Moneda, underscores the administration’s focus on cost-effectiveness over national interests. The Central Bank’s recent choice to purchase banknotes from China and the US at lower rates further demonstrates this cost-cutting approach.
Strategic Moves in the Global Arena: Aligning with Financial Markets
Milei’s administration is not only focused on internal reforms but is also strategically engaging with international financial markets. Recent moves by the Central Bank, including transferring Argentina’s gold reserves to the Bank of England, aim to secure financial stability and avoid potential embargoes. This operation, orchestrated by Santiago Bausili, is part of a broader effort to strengthen Argentina’s position ahead of key IMF negotiations in Washington this October.
A Changing Landscape: What’s Next for Argentina’s Public Enterprises?
The reshuffle and privatization efforts spearheaded by Milei and his advisors reflect a broader vision to overhaul Argentina’s economic landscape. As the administration gears up for upcoming negotiations with the IMF and seeks to implement a more market-oriented approach, the future of state-owned enterprises hangs in the balance.
Stakeholders within and outside of Argentina will be watching closely to see if these radical changes will steer the country toward fiscal stability or further deepen the divisions within its political and economic spheres.
Conclusion: Milei’s Bold Gamble on Privatization and Fiscal Discipline
Javier Milei is determined to chart a new course for Argentina, with privatization and fiscal discipline at the heart of his administration’s strategy. From restructuring public enterprises to engaging with international financial markets, his moves signal a significant shift in Argentina’s economic policy. As Milei takes center stage in the coming weeks, presenting his budget plans and negotiating with global entities like the IMF, the stakes could not be higher for his government or for Argentina’s future.
