Mauricio Claver-Carone assures that he will help Donald Trump from outside the White House. Thus, the former president of the Inter American Development Bank (IDB) assumes that there will be a second term for Trump and, at the same time, says that he plans to stay out of the daily stress of politics. Claver-Carone manages the Latin America Real Assets Opportunities Fund, and he plans to stay in that role of player and financial advisor. During Trump's presidency, this Republican born in Miami held different positions with daily access to the secrets of power. He was an advisor to the Treasury and Deputy Secretary of International Relations, held a chair in the IMF as a representative of the United States and served as special assistant to the president for the Western Hemisphere. He also chaired the IDB until he was fired during Joe Biden's administration.
From the White House, the IMF and the Inter American Bank, he had dealings with the main figures in Latin American politics. Especially with those from Argentina. Claver-Carone was one of the main speakers at the Miami Economic Forum, held in the mythical neighborhood of Little Havana. Investors, businessmen, politicians and influential analysts from both the United States and Latin America paraded through the event. After his presentation on emerging markets, the former Trump official had an extensive and exclusive talk with LPO, in which he conveyed a mix of enthusiasm and skepticism regarding Javier Milei's direction. He anticipated what coexistence with Trump as president would be like and revealed unpublished details of his counterpoints with Mauricio Macri, Sergio Massa and Luis Caputo.
How do you assess the first months of Javier Milei's government in Argentina?
Milei inspires. A lot. And every time he gives a speech, he gets inspires more. When he was in Davos, he gave an extraordinary speech and attracted a lot of attention. The best seller on the Milei platform is Milei! Of course, that is also the problem, because at the end of the day, if you have a platform, you need someone to run it.
Does Milei lack interpreters for his plans?
Watching the debate on the Omnibus Law, the problem is that it became a shadow compared to where they started. I understand that Federico Sturzenegger and Luis Caputo have wanted, from their own experience, to go from gradualism that did not work to a kind of ‘abruptism': present everything at once to see if it passes. It even seems good to me: that's of learning by having a second chance. It is right. But they have left the negotiations in the hands of Peronist mercenaries like Guillermo Francos, who everyone knows are transactional. They negotiated and delivered everything. If Milei wants to be successful, he needs people with credibility and who share his ideology to sell his ideas. If not, it once again becomes a market for Peronist favors, an exchange of I don't know what. The Omnibus Law has already been made ridiculous. I hope he can create a team, because these Peronist mercenaries, whether Franco or Daniel Scioli, are the same.
Besides Francos and Scioli, who else is the problem?
Almost two complete ministries, including Interior...
Don't you confer too much importance to a minister like Francos, who does not seem central to Milei's power scheme?
However, he is carrying out the negotiations.
Were Milei's concessions the exclusive responsibility of Francos?
If they had had a strong, credible Minister of Interior, who shares their ideology and knows how to negotiate and not extort and exchange favors, I am convinced that the results would be more positive. I'm not saying the entire Omnibus Law, obviously it would have the issue of cuts, but it would be much more positive compared to where they are today.
Leaving Francos aside, can Milei achieve what Macri couldn't?
The economic team learned from the mistakes of gradualism and is trying to carry out more instantaneous, holistic and lasting policies over time.
More of shock?
I don't like the word shock because at the end of the day it's common sense. And obviously, we have to give them that second chance. I believe in that second chance, so I have no criticism. However, they have to do something different too. And I see that it is the same circle.
How is Macri's circle repeated?
You go back to the Fund, with its contingencies and new programs, to basically pay the Fund. There must be another policy, much more focused on the private sector, on how to give confidence to investors. And for that Milei has to return to the orthodoxy to which he aspired. Maybe not in complete dollarization, but partial, because Argentina already has a dollarized currency de facto. Perhaps in issues such as privatizations. Things have to make sense and be consistent. If investors don't see it, particularly in Argentina, where everyone has already gotten burned at some point, people say no. Argentina has many resources, lithium, gas, Vaca Muerta.
What is the most important movement to attract investments?
Everything that has been eliminated from the Omnibus Law. The tax issue is very important. There must be policies that bring certainty to fiscal and monetary issues.
Is dollarization viable with still scarce reserves?
First, there must be clarity about where they are going. It's not that one day "we are going to dollarize" and the next day the team says "no, we are not going to dollarize." If you are going to get married, get married with dollarization and that's it!
But how do you dollarize without dollars?
If they are going to dollarize, they must say "this is the goal and we are going to accumulate reserves to do it." To attract with certainty. And if not, and I am not advocating for one or the other, let them say that they are not going to do it, but that they are going to partially dollarize with MEP and it will look like this. You need clarity. When the rules of the game are clear, everyone wants to play. The problem is that nowadays we no longer know who is going where because there are many conflicting opinions. All of us who are excited about Milei, as the rapper Eminem said, wonder if The real Milei will stand up. We are hoping that, in practice, Milei will be Milei.
Aside from internal contradictions, Milei faces the challenge of the social sustainability of its plan. Do you agree?
Macri's gradualism was to maintain social stability during that transition. And it didn't work. Milei was elected by a majority, but his popularity is declining because we are seeing light gradualism. They are imposing restrictions on themselves. They take one step forward and two steps back. Thus, the people, the patience and the support they gave to carry out these measures will be gone.
Is such an ambitious plan viable with so little political structure?
If he had said: "This is what I want to achieve, and I'm not going to back down, I'm not going to be blackmailed because it's what I believe and it's the right thing to do"... Then if it doesn't happen, it's the opposition's fault. But everything is already being diluted transactionally in the swamp, with Peronism. It has fallen apart and Milei is going to take the blame.
The IMF has just given Milei a guarantee of 4.7 billion dollars. How will that relationship continue?
What the Fund is interested in is getting paid. So eventually you are going to distribute because the majority is going to come back to you. With Argentina, this system is more evident, because it is the country that has received the largest loan from the Fund. But unfortunately, this international financing system has become a Ponzi scam.
You represented the United States at the IMF. What is that Ponzi scheme you point out?
The Fund makes a program that provides financing. So, all the multilateral banks make a package with the intention that they pay the Fund. It's like circular money. Now the Fund is going to distribute to Argentina so that Argentina pays the Fund. At the moment, there are certain favorable winds for Argentina due to exports, but that varies over time. And regarding withholdings there is nothing more anti-market than that.
Does the continuity in the IMF of Leonardo Madcur, who was from Sergio Massa's team, seem like part of that transactional policy?
Yes, 100%. I don't understand it! How the Peronist presidential candidates of 2015, like Daniel Scioli, work with Milei today is unbelievable! How do they think that people abroad will look at Argentina?
Are investors so careful?
Yes. Everyone wants to see that this is different... But be careful, Milei is surrounded by very good people.
Who?
His sister Karina seems very smart and has an interest in seeing Milei's plan come true. I have very good references from the ambassadors. But on the other hand, if you were an investor in Argentina 10 years ago, you went to sleep and woke up now, the same people are there. And Argentina is not a small country with restricted talent. I am super optimistic about the Argentines, they are enormously talented. Why do they have to put the same people in the government?
Joe Biden's government seemed to prefer Sergio Massa over Milei, but is now changing its position. Do you agree?
Definitely. But not only in Argentina. This administration has been very interventionist. He supported all left-wing candidates. They leaned completely towards Massa and Lula in Brazil. They did everything possible to destabilize Bukele in El Salvador. But Bukele is too popular, they didn't make it and now they have to live with him.
How important is the visit of Brian Nichols to Argentina?
Not important at all. It's his job. It's the other way around. If you don't go to Argentina, which is the third largest country in the region for which you are a delegate, where do you go? I don't think they're going to trip him up or hurt him now, even though I disagree with this administration. They did what they could to make sure it didn't happen, but now they just accept reality.
How do you evaluate Milei's foreign policy, so aligned with the US, Israel and Ukraine?
There is a lot of internal consistency. Foreign Affairs Minister Diana Mondino is very clear. They are pro-American above all. And that forced the Biden government to accept that alliance even though it does not like its ideology. Foreign policy has been very good, except for the ups and downs due to economic reasons with China.
What will the coexistence between Milei and Donald Trump - who have a very close relationship - be like during the campaign in the United States?
The best Milei can do is govern. He has to occupy that place. Milei and Trump are very different. Trump led companies, had a vision, a career and leadership capacity. Milei is creating his leadership trajectory. Milei was a leader of ideas. Now he needs to govern. If he is truly an ally of President Trump and want him to succeed, the best thing he can do is to succeed in Argentina. That's why I'm so worried about clumsiness, mistakes, and seeing those characters. Because if he fails, they will blame Trump!
Are Trump and Milei similar?
No, I don't think so. Milei has nothing to do with Trump, politically speaking. There is interesting symbolism, but President Trump is very pragmatic. He achieved a good relationship with Andrés Manuel López Obrador in Mexico. He genuinely wants Milei to do well and be successful. So the first thing Milei must do is govern, be faithful to his policies and learn from his mistakes.
Did Trump learn from his mistakes while governing?
When Trump started his government, he had the capacity to lead, but not to govern. At the beginning he was surrounded by a lot of people who were recycled politicians. And they didn't know how to implement their agenda. Let Milei learn from those mistakes!
How do you imagine the coexistence between a new Trump government, with its usual protectionist policies, and Milei's ultra-liberal one?
It's interesting, but there are misconceptions about how Trump sees Latin America and protectionism. He obviously believes in the United States first, and hopes Milei thinks of Argentina first. A leader aspires first to benefit his country. But President Trump didn't like it and worried that the US was spending too much money and focusing on distant conflicts. I participated in many cabinet meetings in which Trump complained about what was spent on Defense, Intelligence and Security in places far from the Western Hemisphere. Because it is in Congress where allocations are debated. It was the first time since the Cold War that significant resources from the Defense, Security, and Intelligence infrastructure of the United States for the Western Hemisphere really began to be dedicated to fighting drug trafficking, focusing on these important issues in the border. At that time, the fight for democracy in Venezuela was at its peak, with a global coalition that we created with 80 countries. Trump tried to form an alliance with Bolsonaro, and with Milei he could be even more practical, because he is different from Bolsonaro in that sense. Ironically, Bolsonaro and Milei don't speak English. With Bolsonaro there always had to be a translator and that was a bit difficult. But obviously there is going to be different with Milei.
Like the differences Trump had with Mauricio Macri?
I was a representative of the United States at the Monetary Fund when Macri asked President Trump for support. I participated in that call. Trump sought the US to support him, he did everything possible to support Argentina at that time. It was thought that it was going to be short-term financing. Obviously, the circumstances were bad and that short period was too long. When Argentina advocated for lemons, President Trump supported it. Important things were done.
What difference do you see in the relationship between Trump and Milei now and with Macri then?
Although they had family history in common, Macri had been in power for two years when President Trump was elected. Macri was not like Milei and was much more cautious in his relationship with Trump than Milei publicly stood for. Unlike, for example, Bolsonaro. On very important issues, such as ethanol, Trump always looked for ways to support Brazil. And much was done on trade issues, despite the fact that Brazil and the United States are export competitors for China in agriculture.
Could Trump and Milei sign a free trade agreement like the one between the United States, Mexico and Canada in 2020?
The one between the United States and Mexico that Trump promoted is what a modern trade agreement should look like. Agreements of this type will not be ruled out with any country. The USMCA was a bipartisan and union-supported achievement. It is something that should be replicated. Why not if the opportunity is given with Argentina?
Although IMF aid is never a substantive solution, could Trump manage preferential support in the Fund as he already did when Macri was president?
The United States elections are in November. The inauguration, if Trump wins, would be in January 2025. If by then Milei's priority is to ask for support from the IMF, Milei has already failed. Hopefully, the issue of the IMF is secondary to the needs that Argentina will have in January 2025.
The current Minister of Economy, Luis Caputo, repeats himself in both stories. What is your assessment of his role now and then?
He made a mistake at the beginning as president of the Central Bank. He is a good Minister. He is a financier, he is not an economist in the comprehensive holistic macro sense. When at Central he did not good, so in a month we had to announce a new program. Caputo did not handle it well because his instincts as a financier, as a trader, led him to try to beat the exchange market. Thus the entire first payment disappeared.
"Los peronistas pueden tratar de derrocar a Milei como hicieron con De la Rúa"
Do you agree with Kirchnerism on that point?
No, it's not that anyone did anything wrong. I have been listening to Kirchnerists for years insisting that they stole it, they took it. Nothing was stolen. I want to make it clear. Macri and his government did not take it, they did not steal and no one took money from Argentina. What is certain is that financially the market beat them. And the first payment from the IMF disappeared with the markets. The lesson was learned, a little late, and he had to negotiate a new program two months later. But they ran out of time.
Was it a loan designed to help Macri politically?
No, never. At no time was that said, neither by President Trump, nor by President Macri. When the loan was first talked about it was in the fall of 2018. Nobody talked about the elections or a loan to support Macri. On the contrary! The biggest concern was what was going to happen to the continuity of the program if Cristina and another Peronist, who at that time could be candidates, won. It was not an incentive to be able to support Macri. The election was still a year and a half away. And if it had not happened, Argentina would have fallen into an extraordinary abyss. In all the conversations, be it President Trump or Treasury Secretary Steven Mnuchin, it was always to support Argentina to overcome the drought and monetary crisis it had then. And no one talked about politics. It never had a political motive as they have accused.
What was Trump's government management like within the Fund's bureaucracy to enable that historic amount?
The IMF was always going to support Argentina. The debate, as always in this kind of programs, is exceptional access. It is the amount that exceeded the country's quota. That always requires a debate. But Argentina is a big country. And for the program to have impact, it had to be robust. Half-finished things, whether in support or sanctions, never work. The thinking was that the program was for a large country with very important liquidity needs. And it was thought that it could recover quickly. They wanted it to be robust enough to make an impact, stabilize the country and get back on track.
Did Caputo learn from the mistakes he made?
Caputo is an intelligent person and I hope he has learned. I have no reason to think he did not. I don't think that's the problem. I hope he has learned it for Milei's sake. But the most important thing is whether the markets believe Caputo learned. If investors think about it. If the markets have confidence in Caputo. That is the most important question.
Do the markets trust Caputo or not?
With some financial actions, we have seen arguments in favor of both answers. At first, they were a little skeptical. Lately, slightly more successful indicators appear. If Caputo were president of the Central Bank, well, I would be more skeptical. We will see. The markets don't lie.
Mileist phrase par excellence...
Completely mileist! The markets don't lie.
Milei speaks to the markets and there are businessmen enthralled with his figure, like Elon Musk, but none of that has yet translated into investments. Why?
Elon Musk is important. He is one of those excited about Milei. But look at what happened with Tesla in Mexico, in Nueva León. There was talk about the plant, a multimillion-dollar investment and we still don't know if it will be carried out. The obstacle was despite AMLO's policies, because Nuevo León has a different government. It hasn't been easy for him. So there is illusion, and it is part of that attraction that Milei has brought, but we will see. For Milei it is time to govern and be consistent. And that will be observed. But it is not something that is going to happen overnight.
Are lithium and Vaca Muerta the most attractive items for external investments?
Infrastructure in general. Argentina has enormous infrastructure needs. Energy is obviously also very important, and agriculture. Argentina was - and should be - an extraordinarily prosperous country, which politics prevents.
Macri criticized you at some point. How is your relationship with him now?
Yes, everyone criticizes. I criticized him too. Friends criticize each other.
And what about your relationship with Massa, with whom you had a fairly friendly meeting?
In a government with people as absurd as Alberto Fernández, Cristina Kirchner, Scioli or Francos, you could have a reasonable conversation with Massa. He is a reasonable person. Honestly, Massa never seemed ideological to me. I did not agree with his political ideas and he had a very transactional Peronist style. But Massa never lied to me. I didn't lie to him either. And we had a very good relationship. In 2022, if Massa had aspired to be president of the IDB, he would have won. But he went to the Ministry of Economy because otherwise, although it is difficult to think about it now, Argentina would have exploded worse than it did. Massa was the only person in that government with a patriotic sense. But I think that the policies and recipes that Milei aspired to are the correct ones. Now, people have been given him a cycle to implement them well.
Translator: Bibiana Ruiz.
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