Leftist economist masterminds Argentina's YPF grab

BUENOS AIRES Fri Apr 20, 2012 12:42pm EDT

Axel Kicillof, deputy economy minister and controller of YPF gas and oil company, speaks at the Argentine Senate in Buenos Aires April 17, 2012. REUTERS/Marcos Brindicci

Axel Kicillof, deputy economy minister and controller of YPF gas and oil company, speaks at the Argentine Senate in Buenos Aires April 17, 2012.

Credit: Reuters/Marcos Brindicci

BUENOS AIRES (Reuters) - Government economist Axel Kicillof stormed the world stage this week when Argentina moved to nationalize energy company YPF, defending the plan he helped devise in a fiery speech worthy of Venezuelan President Hugo Chavez.

Charismatic and polarizing, the 40-year-old Kicillof lambasted "free-market fundamentalists" as he defended the push to seize control of YPF from Spain's Repsol.

Just four months after taking the deputy economy minister post, Kicillof has penetrated the small circle of trusted advisers to President Cristina Fernandez, who singles him out for praise in her speeches.

Sporting sideburns and an open collar, Kicillof told Congress that only "morons" would think the state was stupid enough to play by Repsol's rules and make an offer to buy 100 percent of its shares. He blasted economic theories that "justify the looting of our resources and our companies."

People who know Kicillof say they are not surprised to see him become the public face of a move that has prompted howls of protest from abroad. They say he has always been brilliant, hard-working and even messianic.

One classmate remembered a high school camping trip where Kicillof and a group of friends played at him being God, surrounded by his chanting followers.

"It was child's play, but it's striking that Axel was God," she said, speaking on condition of anonymity.

Kicillof, who declined to be interviewed for this story, spent most of his career in academia, giving classes and writing about the theories of economists such as John Maynard Keynes and Karl Marx.

His first foray into business administration came in 2009, when he took a key position at flagship carrier Aerolineas Argentinas, which the government had expropriated from Spanish travel group Marsans.

Last year, he rose to prominence when Fernandez's administration fought to appoint him as state representative on the board of directors at steelmaker Siderar, despite company resistance.

With that, local media at odds with the government crowned him the new radical boogeyman.

As a college student, Kicillof co-founded TNT, a group that used irony and humor to tackle corruption and raise standards inside state-run Buenos Aires University's economics department.

Later, during the 1999 presidential election, he helped organize a protest against Argentina's obligatory vote because he said the field of candidates was too narrow.

"He's a brilliant guy. He's one of the most intelligent people I know, very honest and with strong ideals," said Leo Piccioli, general manager of Staples Argentina and a fellow member of TNT in the 1990s.

SALVATION

Despite his youthful appearance, Kicillof is an old-school ideologue who shuns the tenets of 21st Century globalism and believes Argentina must find its own way to economic development and industrial prominence.

In his Tuesday speech, he mocked the concept of the "rule of law," saying this was designed to protect big business. He also compared the Spanish operators of YPF and Aerolineas Argentinas, who received no compensation after the airline was expropriated.

"Spanish officials decide what is done at YPF ... in the same way that (Marsans) was bent on lobotomizing Aerolineas Argentinas," Kicillof said. "This is a transnational group that doesn't think about the Argentine worker."

Kicillof helped put together a strategic plan for Aerolineas, which critics say has failed because the company keeps losing money. Others say it is impossible to evaluate his administration of the airline's finances when so much tax revenue has been used to revamp the company.

Admirers call him captivating while critics see him as inflexible and verbose. His influence is growing where it counts -- with the president.

At both Siderar and YPF, Kicillof urged company officials to make fewer dividend payments abroad and invest more locally. Fernandez ended up enshrining that view in government policy.

"He was the main architect of this concept," said a personal acquaintance who met Kicillof in the last few years. "He is absolutely convinced that (his vision) will be Argentina's salvation and not its death knell."

Some people view Kicillof as a threat to the country's future, saying he will scare off private investors. Emerging markets analyst Walter Molano at U.S.-based BCP Securities called Kicillof "a flaming red Marxist" on Thursday.

One old friend said his lack of political experience, and his impulsive, irreverent style, could eventually cause a rift with the president and end with him being scapegoated.

But that view might underestimate the loyalty shown by Fernandez to another controversial government figure, price and import czar Guillermo Moreno, famed for his vulgar talk and his fanatical work ethic.

Like Moreno, Kicillof isn't seen giving an inch.

"He is intelligent," his old schoolmate said. "But he won't listen to other opinions or other points of view. He won't learn from past mistakes."

(Writing by Hilary Burke; Editing by Helen Popper and David Gregorio)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (11)
Parker1227 wrote:
Marxists don’t create wealth, they use political power to steal it from other people.

The economies they grab with political power always languish, rot and decay, because Marxists are ideologues and con artists, not businessmen.

The only tangible product of Marxism is more and more poor people.

Apr 22, 2012 4:38pm EDT  --  Report as abuse
Sat2112 wrote:
I love the side burns and open shirt…very sexy! But I think the world has had its share of marxist demi-god wannabe’s. People who don’t listen to others point of view are not helping to fix the wolrds problems but only adding to it.

Apr 22, 2012 7:13pm EDT  --  Report as abuse
pikachu wrote:
People like Parker1227 just show how much misinformation there is nowadays about what ‘Marxism’, ‘Socialism’, and ‘Communism’ even mean.
You people fail to understand the goal is “a classless, stateless system based on common ownership and free-access, superabundance and maximum freedom for individuals to develop their own capacities and talents.”
Compare that to the US were you have people like Romney making 21 million dollars a year, but worse yet, compare it to the average american already making more than a starving child in africa could ever dream to get… i’m sure you all sleep just fine, even knowing deep down that you could do something, but hey, ”As long as it’s not me it’s not my problem, after all, it’s their fault for not working hard enough to get to where I am now”…

Apr 22, 2012 11:36pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Full focus