Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.
LA NACIÓN – As we know, the budget presented in Congress is made up of two parts: one is the authorization of expenditures for next year, the second is the projection of economic variables to calculate income, which are usually far from the reality. For example, the inflation estimated at 28% for 2021 is just an illusion, which is far from what the economists who collaborate in the Market Expectations Survey (REM) estimate on average.
In any case, it is useful to observe their projections for medium-term economic growth, because they disclose their less than mediocre expectations in writing: the great fall this year, which they estimate at 12.1%, would not recover until the end of the Fernández’s mandate. Guzmán’s team predicts three consecutive years of recovery, but less and less: 5.5%; 4.5% and 3.5%. In other words, according to the minister’s expectations, Argentina would grow less and less as it approaches the 2019 level of activity. This would be consistent with the absence of structural reforms.
When we analyzed the projections for Cambiemos in 2016, prepared by Alfonso Prat-Gay, we observed the same lack of ambition in the reforms. That is why we concluded that its modest growth projection at 3% per year would not be fulfilled and would lead us to a new default, which is exactly what happened. The same occurs with the current projections, which show that they are not waiting to carry out the reforms that Argentina needs to attract investment and generate a path of rapid growth in order to reach the developed countries. On the contrary, the accumulated growth forecast by Guzmán is a meager 0.3% for the four years. If we adjust it for population growth (1.1% per year), we find that the result will be a fall of -3.6% for the entire term.
What the government itself is telling us is that the Fernándezes will leave us in a worse situation than the end of the Cambiemos term. And let’s remember that 2019 was a very bad year that followed the harsh crisis of 2018, which was then worsened by the biggest stock market drop in history caused by the triumph of Kirchnerism in the PASO. Let us remember that Macri doubled inflation and debt, and left greater poverty than the government of Cristina Fernández de Kirchner. The Fernándezes in the present period propose that we worsen that result. As if this were not enough, the “successful” renegotiation of the debt managed to reduce interest and postpone capital payments for the duration of this administration, but it will leave a concentration of maturities from 2024 that practically ensures a new default (which will be the tenth) for the next term. In other words, if Guzmán’s expectations are met, Argentina will culminate almost a century of decline with a final skid from 2011 to 2024.
In short, the current political class has no solutions for Argentina. And they will leave a new time bomb, to also condemn the next government and that is why companies, capitalists and talented young people who seek better opportunities abroad are leaving.
The key to getting out of this eternal series of failures is to understand that the problem is the ideas, which are summarized in what the heterodox, neo-Keynesian economists and politicians think, who are always chosen by the business-union establishment and who make up the governments whether they are Peronists, Kirchnerists, radicals or Cambiemos. His diagnosis is always wrong and focuses on macroeconomic problems and the supposed “structural” poverty that, according to his theories, always requires increasing State intervention in the economy and in society, with more taxes and greater regulations to redistribute wealth. . The moral idea that justifies all their abuses of individual liberties and private property is “social justice”, according to which it is legitimate to take out by force from those who produce wealth, to give them to those who need it even if they do not produce anything in return.
This idea applied for 90 years first relegated us to being the country with the least growth from 1928 to the present in a long decline, but now it has reached a truly terminal crisis. This time, there is no way out because the productive private sector is shrinking and no longer reaches 8 million people, while more than 22 million people got used to living off the state. The scheme no longer works. For those who imagine that the solution is political and that it consists of a new leadership headed by Horacio Rodríguez Larreta that allows the uniting of the dialogist filoperonists such as Monzó, Frigerio, Massot, Santilli, Ritondo, Vidal, with the Social Democrats such as Lousteau, Carolina Stanley, Marcos Peña, and that they plan to put Macri and Patricia Bullrich aside; I have bad news for you, it will not work. Because they have the same wrong ideas.
I believe that the only solution for Argentina is for many people to understand that the time has come for a great, profound Alberdi reform that replaces the economic and income system based on social justice with a new system based on the moral principle of respect for freedoms and individual responsibility.