ARGENTINA: PRESIDENT NESTOR KIRCHNER ORDERS RESTAFFING AT TOP INFLATION-INDEX AGENCY.
Argentine President Nestor Kirchner removed a top official in charge of measuring inflation at the Instituto Nacional de Estadisticas y Censos (INDEC). Investors and political-opposition figures rallied against the decision, as did employees of the government agency. Economy Minister Felisa Miceli defended the decision, saying that it was necessary and that data reports for January were erroneous.
Opponents accuse Kirchner of politicizing statistics agency
Inflation in Argentina is being fueled by four consecutive years of more than 8.5% annual growth and is a central problem for the Kirchner administration. Skyrocketing cost-of-living prices are the biggest weakness in the economic recovery Kirchner has managed since winning the presidency after Argentina's economic meltdown in 2001. The government has pushed through accords with the agricultural industry to control domestic food prices, leading to strikes by food providers, particularly in the beef industry (see NotiSur, 2005-04-15, 2006-01-06 and 2006-07-28).
Last year the government imposed price controls on hundreds of products to curb inflation and banned beef exports to force slaughterhouses to sell more meat locally. Farmers conducted a nine-day work stoppage in December to protest government efforts to place restrictions on the beef industry.
Kirchner defended his decision to replace the officials in charge of inflation data at INDEC, saying he made the move to improve operations. "Analysts and economists that have criticized the data are being paid by other political interests, and we all know how they made out when they were in the government," Kirchner said Feb. 6 during a speech at the presidential palace in Buenos Aires.
Kirchner's decision to remove Graciela Bevacqua, the head of the division that produces inflation reports, and replace her with Beatriz Paglieri, an aide to Economy Minister Miceli, drew criticism from economists such as Fausto Spotorno at Orlando Ferreres y Asoc., a Buenos Aires-based economic-research company. Appointing politically connected officials to jobs held by technical staff raises questions about the independence of the national statistics institute and the credibility of its data, he said.
Bevacqua was removed from her post after she declined to modify the methodology used to measure the consumer price index, Clarin, an Argentine newspaper, reported, without saying how it got the information.
"If we have to make changes, we will do it because they...
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