Aldo Abram on Argentina being demoted to a standalone country by MSCI

Foto Aldo Abram
Aldo Abram

“Unfortunately, this is a direct consequence of the policies being applied in our country. Some will say it is just a consulting firm that’s lowering Argentina’s rating to such an extent; to those people, I say that it is not the consulting firm that lowers the rating. What the consultant does is asking the funds that could be potential investors their opinion on the situation in the country.”

Aldo Abram
This article was published in Real Politik on June 28th, 2021. 

According to Libertad y Progresos’ economist Aldo Abram, Argentina being categorized as a “standalone” economy by MSCI: “means that most of the funds considered that Argentina does not belong in the emerging category, not even the one that follows, the frontier economy we were during Cristina Fernández de Kirchner’s government. It was decided that our economy is even less competitive, telling investors that if they want to put money here, they run the risk on their own. ”

In turn, he remarked that “this does not only means that investments will not arrive, but that an estimated US $600 million will leave the country, which is not a lot of money, despite the fact that we do not have a dollar left over. However, What is worrying is the signal that was given to all those foreigners who are thinking of investing in the country.”

He explained: “Why do I say that we are seeing continuity with respect to the government strategy? Because, in fact, it is nothing new, nobody wants to invest in Argentina. Looking at the public securities of the Treasury that were given to those who participated in the debt restructuring last year, they were exchanged with a 50 percent write-off. ”

“Today, these papers are quoted at a price that will be significantly reduced by the time t sell say that in four years’ time, as it has happened previously. Clearly, the perception in the world that Argentina can grow steadily or gain credibility, which is the basis of a country’s credit, in the next three or four years it is equal to zero,“ he said.

Regarding the direction of the government, he said: “We have a problem if we think that in this way we are going to give the Argentines possibilities of progress or provide them with productive and dignified work. That is not going to happen.” He made the following parallelism: “If you want to see it in football terms, the qualification change is to go from B directly to D or, perhaps, to the neighborhood championships.”

Accordingly, he warned that the antecedents for this brutal fall were unknown, consisting mainly of countries such as Trinidad and Tobago or Panama: “I don’t know the story, but I think that to drop two boxes in a rating of four, you have to either be a war zone or have done things too badly because it is too abrupt a change. ”

However, we should not be surprised since this week we heard Minister Kulfas that what is paid in taxes in Argentina is reasonable. When today, a person who does not pay income tax but works for someone else within a legal framework, between what he pays in taxes with his expenses and what he pays with his salary, works half the month for the state, ” he closed.