What does the agreement with the IMF mean for Argentina?

LA NACIÓN: Positive expectations have been generated by the closing of the negotiation with the International Monetary Fund. This is good news, if we take into account that if we arrived to March without a refinancing of the more than USD 5000 million that expire with that organization and the Paris Club, we would go into default and, afterward, face a great deepening of the crisis, with a tremendous societal cost. Now, does that mean that all the problems of the Argentines have been solved?

The answer is no. The economy is not predestined to stabilize and grow steadily solely for the fact of having signed an agreement with the IMF. It will depend on what is done with the time of tranquility that is going to be gained. To close this chapter we have to end the enormous burden that the State has imposed on a suffocated productive private sector that is being squeezed, removing taxes and fees. In addition, they take away a large part of the available credit to finance excess public spending and overwhelm it with absurd regulations.

To understand it easily, we can use the example of what happened in Argentina throughout the last century; although w e could gomuch further back. Let’s imagine a very good marathon runner, the Argentine productive sector, who participates in the Olympic Games. We chose a coach for him who, before starting the race, gives him a backpack and goes by his side with a bicycle with a cart full of stones behind, which he carries on his back as he runs. At first, the athlete manages to position himself in the lead; but suffering from the increasing weight, he begins to slow down, eventually starting to walk and then to crawl, to end up lying down and exhausted.

Angry, we Argentines choose another coach for him. This new coach approaches him and begins to tell him that he is a great athlete and that he can win. There is a whole country that trusts its great potential. The marathoner gets up and starts jogging as best he can. Luckily, no new stones are added to his backpack; but the weight of those he carries is so great that he falls again.

Of course, this trainer is considered a failure and we choose another. The new one arrives, looks at the marathon runner and says “You have to give this one a pick me up and you’ll see how he runs“. Doping is then used and the poor athlete barely manages to get up. He makes a tremendous effort, but falls dead a few meters away.

This reflects the current situation in Argentina, which we don’t want to understand (or is it not convenient for many to understand?). We fail to acknowledge that we have to lighten up the marathoner’s burden. This is not possible with the more than 67,000 regulations with which “enlightened” officials pretend to tell those who work and run a business how to “improve” the way they do it. Can anyone believe that a person who has never managed a kiosk can tell you how to do your best? Nor can they be asked to face such a tax burden that, according to the World Bank, places us in 21st place among 191 countries, in terms of squeezing their companies with taxes. These are statistics from 2020 and, since then, taxes have not stopped increasing. On top of that, since it still fails to pay for the tremendous current public spending, the State absorbs most of the available credit, leaving very little to produce or invest.

The bad news is that, when the pre-agreement with the IMF was announced, it was clear in the speeches of the President and Minister Guzmán that they do not believe that these problems exist. On the contrary, they promised an increasingly bigger State and a plan a deepening of the current policies.

Unfortunately, if they don’t use this opportunity to make structural reforms at a time of less uncertainty that is won with an agreement. The same thing will happen to the next government, Argentina will fall into a crisis. It is true, they will say that the marathoner is still standing; but I doubt that with all the doping they have to give him he will be able to run for a long time.

Let’s demand that the coach removes the backpack before he falls again, because the blow is going to hurt us all.