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C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 000754 
 
SIPDIS 
 
E.O. 12958: DECL: 05/29/2018 
TAGS: EFIN ECON ETRD PREL AR
SUBJECT: NEW ECONOMY MINISTER STILL GETTING UP TO SPEED 
 
Classified By: Ambassador E.A. Wayne for Reasons 1.4 (b,d) 
 
¶1. (C) Summary:  Ambassador paid a courtesy call on newly 
appointed Economy Minister Carlos Fernandez May 28, 
highlighting Paris Club and advocacy on behalf of U.S. 
investors as key issues to discuss in future meetings.  The 
Minister said he is getting up to speed on the issues, but is 
mostly focusing on the ongoing agricultural sector strike. 
He said he wanted to maintain a close relationship with the 
Embassy and USG, and expressed interest in the potential for 
U.S. investment.  Ambassador noted that Argentina would 
likely face some criticism over its agricultural policies at 
the upcoming UN/FAO meeting in Rome, and the Minister 
promised to raise this with the President.  End Summary. 
 
¶2. (C) Ambassador Wayne paid a courtesy call on newly 
appointed Economy Minister Carlos Fernandez May 28, in 
advance of a May 29 meeting between the Minister and visiting 
Senator Christopher Dodd (reported septel).  The Ambassador 
mentioned that the Embassy had maintained a regular dialogue 
with the Minister's predecessors on issues such as Paris 
Club, advocacy cases for U.S. companies with disputes against 
the GoA, and opportunities for U.S. investment, and hoped to 
continue a similar dialogue with the Minister and his new 
team. 
 
¶3. (C) The Ambassador said he was aware that the Minister's 
immediate predecessor, Martin Lousteau, had completed a draft 
proposal to negotiate a debt restructuring deal for 
Argentina's $8 billion debt to Paris Club creditors, and had 
sent it to the President for consideration just prior to his 
April 24 resignation.  The Ambassador added that to date 
Argentina has not presented any kind of proposal, but 
emphasized that the U.S. and other creditors are ready to 
engage in good-faith negotiations. 
 
¶4. (C) Minister Fernandez noted that he is still getting up 
to speed on the issues, and has been focused almost 
exclusively on the ongoing agricultural sector strike.  He 
highlighted his long experience working on economic issues, 
characterized himself as "technical," as opposed to 
political, and claimed to be trying to "take charge" of the 
issues in his area of responsibility.   He commented that 
many of the issues he is responsible for are highly 
sensitive, and asked for time to get familiar with them 
before engaging in detailed discussions with the Embassy. 
That said, he admitted that Paris Club was a top concern, and 
he hoped soon to have an in-depth conversation about it with 
the Ambassador. 
 
¶5. (SBU) The Minister commented that a top concern for him 
and the GoA is to attract more foreign investment, and he 
asked for the Ambassador's views on the level of interest 
among U.S. companies in investing in Argentina.  The 
Ambassador responded that there are in the range of 500 U.S. 
companies operating in Argentina, providing over 150,000 
jobs.  He noted that, in recent years, the greatest interest 
has been from information technology and financial services 
companies, looking to take advantage of Argentina's talented 
and competitively priced labor pool and solid infrastructure. 
 However there has also been great interest from retail 
operations such as Wal-Mart. 
 
¶6. (SBU) EconOff added that Argentina is home to the regional 
headquarters of many U.S. companies for Spanish-speaking 
South America, and many companies are also setting up 
back-office operations (i.e., payroll, accounting, market 
research) in Buenos Aires to serve the region.  The 
Ambassador highlighted biotech as another area of possible 
growth, but pointed out that the legal battle between the GoA 
and Monsanto over royalties for round-up ready soybeans is an 
obstacle to convincing other U.S. biotech companies that the 
GoA protects intellectual property rights. 
 
¶7. (C) The Minister confirmed that President Cristina 
Fernandez de Kirchner planned to attend the FAO/UN conference 
on world food security in Rome, June 3-5.  The Ambassador 
noted that the focus of the meeting would likely be on the 
causes and effects of high world food prices.  He warned that 
Argentina might face criticism at the meeting for its 
agricultural sector policies.  In particular, some 
organizations and countries would likely argue that 
Argentina's export taxes and other export restrictions are 
contributing to higher world food prices.  The Minister 
agreed to flag this for the President. 
 
¶8. (C) Comment: The criticism of Minister Fernandez is not 
that he is unqualified for the position, although many local 
economists wish he had more experience on macroeconomic 
 
BUENOS AIR 00000754  002 OF 002 
 
 
issues.  Rather, it is that his sole purpose is to slavishly 
implement the decisions of the "real" Economic Minister in 
Argentina, ex-President Nestor Kirchner.  Fernandez certainly 
did not offer much substantive comment during this meeting, 
confirming his reputation for being a cautious person. 
Whereas he proved slightly more loquacious during the 
subsequent meeting on May 29 with Senator Dodd (septel), our 
first impression is that it may take a bit more time to 
develop an open dialogue on sensitive issues such as Paris 
Club and Holdout bondholders than it did with his four 
predecessors in the last two years.  End Comment. 
 
¶9. (SBU) Bio Note: Carlos Fernandez has been in public 
service for 25 years.  Five weeks prior to being named 
Minister of Economy, he was designated as the head of the 
Administracion Federal de Ingresos Publicos (AFIP, 
IRS-equivalent).  From 2003 until that appointment, he worked 
in the Ministry of Economy as Secretary of Hacienda 
(Treasury), Under Secretary of Budget Evaluation, and Under 
Secretary of Provincial Relations.  From 1997-2003, he was 
the Under Secretary of Fiscal Policy and Coordination for the 
Province of Buenos Aires.  From 1989-1997, he served as 
National Director of Fiscal Coordination with the Provinces 
in the Ministry of Economy; prior to that, he worked in the 
Secretariat of Hacienda in the Ministry of Economy. 
Fernandez graduated with a degree in economics from the 
University of La Plata in 1979, with specialization in public 
finance and tax and financial administration. 
WAYNE