Deputy Charles Heller He spoke with Jorge Fontevecchia on Modo Fontevecchia on Radio Perfil (FM 101.9) about the internship within the Frente de Todos.
There are divergences as to whether the US Federal Reserve’s half-point rate hike is worrying news or could create an opportunity for Argentina.
The rise in the Federal Reserve rate always has an impact on the world economy, in general, and also by raising the interest rates that those who want to take financing need to resort to.
Today’s situation in Argentina, having refinanced both its debt with private parties in the initial negotiation with the bondholders, as well as its debt with the IMF and dissipating for a period that is called a “window of opportunity” the issue of external indebtedness minimizes or moderate the impact that this can have.
Probably, in the financing that the private sector may require, it may have some type of impact and it may also have an impact on the changes in the currencies of other countries with which Argentina has strong commercial exchanges. If the real changes its price, that is also a problem for Argentina, because it makes the real exchange rate competitive with which the international trade of the respective countries is carried out.
I believe that it is a moderated impact due to the situation that Argentina has temporarily achieved with respect to its external sector, which has always been one of the enormous Achilles’ heels and continues to be a concern due to the impact it has on the global economy.
Axel Kicillof’s message to Alberto Fernández: “We should not be afraid to confront certain sectors”
The theme of the week is the belligerence between the main components of the Frente de Todos, I am referring to La Cámpora, the sectors close to the vice president with the Government. There seem to be two diagnoses regarding the future of the economy: one that the economy is going to improve, which is supported by the government and the president’s friends, with a view that next year inflation is going to be lower than expected. Macri left, that the gross product is going to continue to grow, unemployment is already at 7%, the redistribution of the improvement in the gross product and another, that of the sectors closest to La Cámpora that envision growing inflation, will begin to be noticed , a loss of the purchasing power of the population, a growing bad mood and therefore electoral defeat. I would like to know your own opinion about which of these two extreme visions of the future of the economy is closer to your thinking.
I can never do any analysis without locating the stage. Talk about the Argentine situation without knowing where it comes from. At the end of 2019, 25,000 closed SMEs, disproportionate growth in unemployment, 50-odd percent of inflation, indebtedness at unsustainable levels and with maturity schedules impossible to meet, that was the country at the beginning of the administration.
Immediately, two years of pandemic, with all that that implied, including economic effort, for a country that had brutally neglected its health system. And when I was coming out of there, war in the Ukraine, with all that that implies, beyond other considerations, from the point of view of the economy.
In this scenario, Argentina is achieving certain issues that try to mitigate these effects. ECLAC has said that in Latin America the recovery from the pandemic in terms of gross product was going to take until 2026. Argentina did it in a year, in 2021 it recovered what it had lost in 2020.
Unemployment was sharply reduced, not with the conditions that we all would like of quality, of transparency in what is about registered employment, blank, with all the rights and attributes that that means but it was reduced, many companies, sectors that were absolutely in crisis have recovered a lot and are working. Investment is at a very high level, contrary to speculation.
It makes it a reality that businessmen do not wait for their labor legislation to be changed in order to invest, they hope to have someone to sell what they produce. There they invest, they equip themselves, they expand, they take on people, and that is what is happening. We continue to have lots of recurring problems, the main one being inflation, which is a problem because it acts as an element of redistribution of income and wealth.
The government is committed to the fact that wages have to beat prices and that is why joint agreements are celebrated that point in that direction. All of us who defend this project believe that joint agreements have to be resolved as they are being resolved. If the parity increases overheat the inflationary bid, it is very likely that these beneficial effects will soon disappear.
The great problem that Argentina has without elucidating is why there is inflation at this moment. They told us for years that inflation was caused by the uncertainty generated by the external sector and the possibility of Argentina going into default and not being able to meet its obligations, a scenario that is clear, several years have passed and, therefore, no may be a factor that presses today. They told us it was because of the salaries, it turns out that now they are coming from behind trying to rebuild. They told us that it was the monetary issue, that it is contained and, measured in terms of product, the current monetary base is the same as it was at the beginning of 2020, it has not grown. They told us that the exchange rate and the exchange rate is coming from behind adjusting. All the topics that they told us that they generated inflation are not there, so now they say that they are the expectations, what expectations? because if there is no imminent risk of devaluation because there is no pressure from the external sector and there is a growing, demanding market, today what one hears most of complaints is ‘I don’t have enough dollars that I need to invest, to import what I need to sustain production processes.
You mentioned the word expectation, which now places the possibilities of projecting inflation, not on the past and the present, but on future hypotheses. Doesn’t this also coincide with La Cámpora’s expectations regarding the future of the economy? And, if so, to what do you attribute this misdiagnosis of the fruit of the economy of a sector of the FdT?
The Front of All is a coalition, made up of diverse forces and it is absolutely possible, and I would say almost inevitable, that different visions or opinions arise within a coalition. Very little is said about those that arise within the other coalition.
That within the coalition there are different visions about certain policies, and that there are inconsistent expectations about the times and others, I believe that it is a foundational issue. This coalition had the objective of creating a force capable of defeating Macri so that there would be no re-election, for all that this implied for Argentina, but that did not automatically imply that we all agreed on everything that had to be done.
Alberto Fernández wants to make changes, while Cristina Kirchner insists on having a voice
I participate little in the internal one, because I am not at those tables nor do I participate in those discussions. I believe that the Frente de Todos lacks an organic environment where discrepancies can be channeled and then they will probably acquire media importance because they do not have regular enabled channels.
That does not mean that these instances should co-govern. The government has to be exercised by whoever has to exercise it, each one has to fulfill his role. That executive power, which is the representation of a coalition, would be strengthened if it had the possibility of channeling those debates in a space in which the different political expressions that make it up could discuss the course, the intensities, the priorities, etc. I trust that this will be achieved and will be channeled.
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