Economy Minister Luis ‘Toto’ Caputo was already an important official in President Javier Milei’s government – now he is a ‘super-minister.’
Following Guillermo Ferraro’s exit from government, the ex-Infrastructure minister’s portfolio has been downgraded to a secretariat and passed under the wing of Caputo, who absorbs the departments of Public Works, Communications, Housing and Transport.
As if underlining his key role, the 58-year-old was last week placed in charge of announcing the elimination of the fiscal chapter from Milei’s ‘omnibus bill.’ It was the president’s choice.
That Casa Rosada press conference on the evening of January 26, during which Caputo announced the elimination of the most controversial chapter of the ‘Ley de Bases’ was a clear demonstration of the central role occupied by the official. The economic czar thus revalidated the support of a president who has entrusted the economic plan to him from the very start of his administration.
It was Milei himself who took on the task of convincing Caputo’s wife at a dinner that her husband should take the job, assuring her that he was “destined” to occupy the hot seat on the fifth floor of the Ministry.
The former Mauricio Macri administration official had run into resistance from his family due to his stressful previous experiences of public life as Finance minister and Central Bank governor during the conservative leader’s 2015-2019 presidency.
Caputo remains in touch with Macri, although not as often as they once did.
Since agreeing to join the team, Milei has trusted Caputo, who is one of the few now forming part of his innermost circle.
His outreach to ‘Toto’ also caused the president to distance himself from economists Emilio Ocampo and Carlos Rodríguez, the main swords who championed dollarisation during the libertarian’s presidential campaign. The duo now accuse the president of moving away from dollarisation with the arrival of Macri’s ex-minister in government.
Nevertheless, the President has decided to persist with Caputo, handing him the departments of Energy and Mining, as well as the Economy portfolio, and permitting him to bring members of his Anker consultancy firm into the Economic Cabinet – among them Santiago Bausili in a key post as Central Bank governor.
Displays of power
Caputo is also flexing his political muscles – another display of power is Caputo’s success in ousting Interior Minister Guillermo Francos from the management of federal revenue-sharing funds for the provinces – a fundamental tool for negotiations with the governors. Although to a lesser degree, he also contributed to the list of reforms presented by Federico Sturzenegger.
The minister recently used social networks to warn that if Milei’s mega-reform law is not approved, there would be greater austerity for the provinces – a move which was clearly interpreted as putting the squeeze on the governors.
“There is no negotiating zero deficit. Unless all the economic measures proposed by the law are approved, the austerity will be greater, as President Milei said, fundamentally for the provinces,” posted Caputo on social media.
Among the voices immediately clashing with him was the republican Peronist deputy Miguel Angel Pichetto, who responded: “Economy Minister Luis Caputo, who did not have the guts to come to Congress, should stop squeezing the governors and try seeking agreements with the provincial governments instead of threatening them.”
“This is not a threat, it’s confirmation that we will comply with the mandate given us by a majority of Argentines to balance the budget and end decades of the inflationary scourge,” responded Caputo.
Why did Caputo move against the governors? Because he did not have the votes assured to advance with changes to export duties nor the new scheme for updating pensions nor the transfer of the FGS (Fondo de Garantía y Sustentabilidad) pension fund to the Treasury.
This was demonstrated when the minister announced the dropping the fiscal chapter of the omnibus bill in order to smooth its passage through Congress. The Economy Ministry chief announced that the following items would be removed from the package: the moratorium, income and personal asset taxation, export duties and pensions.
At the same time, he expressed: “We are evaluating replacement measures which imply greater austerity for everybody, for the political world and for the national and provincial governments.”
Mass exit of officials
Since Javier Milei took office, seven high-ranking officials have departed or more or less one a week.
The first to go were communications officials Eduardo Roust and Belén Stettler. Then came the turn of Labour Undersecretary Horacio Pitrau, expelled by Human Capital Minister Sandra Pettovello – the reason was veteran shop employees union leader Armando Cavalieri sticking to compulsory trade union contributions, which were to be scrapped by the mega-DNU, after reaching agreement with Pettovello’s Ministry. The government demanded somebody’s head and it was Pitrau’s.
On January 25 Enrique Rodríguez Chiantore was informed by friends that they had seen in the Official Gazette that he had been thrown out of the SSS (Superintendencia de Servicios de Salud) health services watchdog along with his second-in-command Nicolás Striglio.
David Aruachan, the deputy executive director of the National Agency for the Handicapped, was also removed from his post.
Last but far from least, Infrastructure Minister Guillermo Ferraro, the heavyweight on this list, was ejected at the end of that week after becoming embroiled in infighting with Cabinet Chief Nicolás Posse – it all blew up when Ferraro was accused of leaking information from a Cabinet meeting.