The ship “Argentinas” needs structural fixes

NOTICIAS ARGENTINAS – 2020 will be remembered as the year in which our ship “Argentina”, which was already in critical condition, suffered the hurricane “Pandemic”.

Fortunately, it does not seem likely that in 2021 we will witness the collapse of it.

We will sail through extremely favorable international seas most of the year.

The excess liquidity generated by the central banks of developed countries, to counteract the negative impact of Covid-19 on the economy, not only increase financing in the world, but also depreciate their currencies.

So, the first will increase external demand and the second will increase the prices of our exports that are traded in those hard currencies.

It is true that the regional drought will negatively affect the second quarter harvest; but it is also true that it contributes to the rise in the prices of the affected grains.

However, the strong rise in prices will take external sales to around the values ​​of 2019.

The reactivation that we have observed in recent times has been the consequence of letting people and companies work that during the strictest quarantine were forbidden to do so; which will continue for much of 2021.

With an agreement with the IMF, which removes this uncertainty factor, and the favorable international wind, the ship will continue afloat and advance; but with less and less force.

It would be an error on the part of the government to confuse this reality with that of a ship that is in ideal condition and embarks on a swift and long journey.

This has already been experienced by Cambiemos that, after announcing that she would make the necessary structural reforms to repair the damaged ship, she managed to get out of the stocks with little trauma; which, added to the solution of the holdouts problem in New York, managed to generate very favorable winds.

The increase in credibility, that is, credit, allowed him to keep the ship afloat without fixing the structural problems it had.

However, in 2018, the storm of capital flight worsened, which is nothing other than the loss of credibility of Argentines and foreigners in which “Argentina” could stay afloat.

So they jumped into the lifeboats to flee the disaster.

The government has to learn from history. If you take advantage of the current reactivation to implement a plan to fix “Argentina”, with a detailed program of structural reforms and get to work, 2021 will be the beginning of a long and fast journey to development.

If not, it will be just a period of calm where you can enjoy the breeze for a while; but, like the previous crew, they will soon see that the ship leaks and ends up sinking.