Argentina’s future chancellor rules out entry into BRICS and price controls

In a preview of the drastic change in economic policy that will be applied in Argentina starting December 10, future Foreign Minister Diana Mondino on Thursday ruled out the South American country’s entry into the BRICS block and announced the abolition of price controls to combat inflation.

Before entering the conference of the Argentine Industrial Union and in response to a question from the press about whether the government of President-elect Javier Milei is determined to reject joining the bloc of developing economies, Mondino He ratified it and pointed out that Argentina has not yet formalized its entry, which would only be effective on January 1. “We have never joined the BRICS”.

Argentina was among the six nations invited in August to join the bloc formed by Brazil, Russia, India, China and South Africa in early 2024. Argentine President Alberto Fernández, who on December 10 will transfer power to Milei —a far-right economist and leader of La Libertad Avanza—, then endorsed joining that alliance as an opportunity to reach new markets.

The other nations that were invited during a conference in Johannesburg to join the group were Iran, Saudi Arabia, the United Arab Emirates and Ethiopia.

Mondino He noted two weeks ago in an interview that the BRICS “It is more linked to political alignment than to advantages that there may be for trade between countries.” and noted that “With most of them we already have diplomatic and commercial relations”.

In October, Fernández announced after meeting with the head of the BRICS New Development Bank (NDB), Dilma Rousseff, that Argentina had initiated “the accession process” to that organization as a way to access new financing mechanisms. For this it is necessary that the country makes its corresponding capital contribution.

During her talk with the press, the designated chancellor also appeared favorable to the trade agreement between Mercosur (Argentina, Brazil, Paraguay and Uruguay) and the European Union.

The economist said that this delayed pact “It has a high chance that it will be signed on December 7” “Hopefully Alberto Fernández can achieve it and finish his mandate with this achievement”.

Mondino He also maintained that the price control system applied by the current Peronist government on hundreds of foods, cleaning and hygiene products, which it periodically renews with the alleged purpose of stopping inflation, will be annulled.

“Maximum prices, careful prices, have to disappear. What there should not be is price control, it never worked, it generates distortions“said the future chancellor. “If you leave prices open, companies will do the best they can. Competition must be generated”.

The rise in the cost of living has heated up in recent months and Argentina suffers inflation of more than 142% annually.

Besides, Mondino announced that “the trap must be released as soon as possible” in reference to the restrictions on the acquisition of foreign currency to alleviate the fall in reserves, “because it is destructive, it prevents saving, it prevents normal transactions”.