Argentina Taps Leftist as Economy Minister in Growing Crisis
posted on
Jul 04, 2022 11:47AM
The quote below is from the article linked below the quote. The boldface portions of the quote were highlighted by me and not boldface in the actual article.
This development politically in Argentina has to raise the question of: "How will this move to the Left affect LAC and Cauchari-Olaroz, if at all?"
The prospect of higher export taxes on companies doing business in Argentina certainly could have a negative effect on LAC operations at Cauchari-Olaroz and at the other Argentina locations of the company as well. Just the possibility of this happening is of concern and it also strenghens the reasons for splitting LAC into 2 separate companies with one focusing on South American mining opportunities for the now constituted Lithium Americas Corporation and the second company dedicated to the current and future LAC operations in North America, especially concerning Thacker Pass.
Just how far "Left" is Argentina President Alberto Fernandez willing to go and planning to go in the future and how will that movement affect foreign companies operating in Argentina, especially foreign mining companies such as LAC?
This is posted on the "Off Topic Forum" because of the political nature of the information, however one could argue that it should be front and center on the "Discussion Forum" just as well. In the overall scheme of things it may turn out to be a tempest in a teapot OR it may turn out to be a considerable negative event for foreign based mining companies in Argentina.
We just have to watch and wait to see how this development in Argentina politics evolves over time.
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"Analysts pointed to Batakis’s lack of experience formulating major economic policies or negotiating with the IMF. She could also represent a turn toward far-left economic policies.
“It’s a victory for Cristina,” Camila Perochena, a political analyst and professor at Torcuato di Tella University in Buenos Aires, said. “For financial markets, it’s an awful impact.”
“Batakis will implement a heterodox agenda,” Marcos Buscaglia, founder of Buenos Aires-based consultancy Alberdi Partners, wrote in a note. “She will tighten FX controls while at the same time she is likely to rein on public spending. She has repeatedly voiced her favorable view on export taxes so we do not rule out her pushing for legislation to raise export taxes.”
Crisis-prone Argentina is currently battling inflation seen at nearly 73% by the end of this year, with almost 40% of the population living in poverty and the economy forecast to enter a recession.
The central bank has razor thin cash reserves that it’s struggling to build up amid low credibility and high prices on energy imports and the country’s bonds trade in distressed territory."
Argentina Taps Leftist as Economy Minister in Growing Crisis (msn.com)
Okiedo