Córdoba: New praise from Cavallo for Milei's administration

At a luncheon held for the 48th anniversary of the Fundación Mediterránea, former Minister of Economy Domingo Cavallo was complimentary of the economic plan of President Javier Milei.

"What Milei is doing is clearly aimed at leaving behind the problems that were introduced with the abandonment of Convertibility in 2002," Cavallo stated in Córdoba.

The economist, who is also head of Ieral and honorary president of Mediterránea, introduced former President of Ecuador Yamil Mahuad, who made the decision to dollarize his country's economy.

Mahuad gave a speech at a luncheon at the Holiday Inn hotel, with the opening remarks delivered by Fundación Mediterránea president María Pía Astori.

"This man should be listened to because he governed his country for only 17 months, but he left behind two state policies that have been maintained for 25 years and that solved Ecuador's age-old problems. I thought it was very timely to bring him to Argentina so he could share his experience," Cavallo said, referring to Mahuad.

He also spoke about the political leadership needed to implement this type of measure.

"Leadership is essential, but so is a good design of the plans and a great task of persuasion, of explaining to people why these decisions are made and also listening to those who may have different opinions, because one never has the absolute truth. Yamil Mahuad's characteristic was that he listened to his technicians, listened to international experts and to other political leaders, and he had great skill in making decisions with great intelligence, thinking about sustainability over time. In other words, that they would become state policies," he expressed.

Cavallo and the problems Milei is solving in Argentina

"The abandonment of convertibility was truly traumatic and introduced all the problems we have today, and that Milei is trying to leave behind. At that time, we missed out on a period of rising commodities that began in 2003 and lasted until 2010-2011, with which we could have practically solved the bulk of Argentina's problems. But all of that was completely squandered due to poor political decisions and also due to corruption," he said.

"Now it's very important that the effort the population is making serves to establish rules of the game that are sustained over time. That's the conclusion one can draw after listening to Yamil Mahuad," he added.

Bimonetarism in Argentina

"I believe in Argentina we should move toward a bimonetary system, but one that is very well designed. Dollarization may be something that happens if the bimonetary regime doesn't work," he indicated.

"If, for example, with both currencies the peso continues to devalue permanently and inflation returns... Those are things that happened in Ecuador, where the first time I went and was consulted, I recommended they implement a good bimonetary system like the one Peru had, which was working very well in Peru," he added.

Boosting Argentina's exports

"I hope that soon the government will realize that among the things it has to do is give a genuine boost to exports. It doesn't need to be through a sharp devaluation. The dollar should be allowed to settle at the equilibrium level that the market itself will find once the foreign exchange market is fully liberalized," he concluded.