Speculation simmers on next Argentine econ minister

BUENOS AIRES (Reuters) - The guessing game is heating up over who will be Argentina's economy minister when a new president takes office in December just as five years of scorching economic growth enters a cooling off period.

Many economists speculate that Economy Minister Miguel Peirano could stay on if presidential front-runner, first lady Cristina Fernandez de Kirchner, wins the October 28 vote because they both see industry as a crucial driver of growth.

Other names in the local press include those of former and current central bank heads, a United Nations economist and the director of the country's investment promotion agency.

But many economists say a key question is how much autonomy the new minister will be given.

"At this stage, more important than the future economy minister's name is the mandate he (or she) is offered," said Vladimir Werning, an economist at JPMorgan in New York.

"If the minister is given freedom to bring feedback to the executive branch on how he sees the economy, this will be a qualitative improvement over the situation of the last couple of years where the economy minister, the specialist, did not really have an option to express his views," Werning added.

President Nestor Kirchner has steered economic policy -- emphasizing job creation and robust domestic demand -- especially since Roberto Lavagna resigned as minister in late 2005 over their diverging ideas and is now running against Fernandez for president.

Peirano, a low-profile former industry secretary, took over in July after a bag stashed with cash was found in his predecessor Felisa Miceli's office bathroom.

The market did not react one way or the other when Peirano was named economy minister in July, indicating he is viewed neutrally. And while other candidates might be seen more positively by investors, many analysts say the real issue is how much autonomy the new minister would have in setting policy.

Whoever wins the election will face challenges including high inflation, an energy crunch and a deteriorating fiscal surplus, which threaten to limit growth.

Fernandez has a resounding lead in polls. To avoid a second round run-off in November, she needs to win more than 45 percent of votes or more than 40 percent with a 10 point advantage over her nearest rival.

Polls released last weekend showed her scoring a first-round victory, thanks largely to people's perception that Kirchner turned the economy around after a 2001-02 crisis.

NESTOR IN CHARGE?

A prominent senator, Fernandez has been a key advisor to her husband during the last four years. It is not clear how big a role Kirchner would play if she took the helm.

"Cristina has less experience in administration (than Kirchner), she seems less involved in day-to-day matters ... and she could rely more on Kirchner or on her own team," a local economist said, asking his name not be published.

"That's what my clients ask me, whether Kirchner will keep managing everything or whether there will be a team," he said.