With the irony that characterized him, indescribable Guido di TellaThis came after his first experience in public service in a government Isabel PeronIn 1982, he expressed an uncomfortable and politically incorrect truth. In his opinion, The history of import tariffs in Argentina has helped inform the relative weight of different sectors over different governmentsWhether democratic or military. He advised opening the economy without charge. So said a member of the family who, thanks to protectionism, produced mechanical mixers, turned British Austins into D-Telas 1500s, Argent Lambretta motorcycles and made the legendary Siam refrigerators in Avellaneda. His academic integrity takes precedence over his family’s interests.
Years earlier, in 1979, chili It followed this path by eliminating the dispersion of tariffs – which averaged 94% – and placing a single 10% tariff on all imports. They realize that under the sophistry of value-added protection, added cost is promoted. The average is currently 6% and less than 1% in free trade agreements. This policy was continued by various governments It has allowed Chile to have one of the highest per capita GDP in Latin America ($35,000), more than double that of Argentina.
The industrial policy of a country like Argentina was not drawn up – and will never be drawn up – by a Swiss organization, nor by the OECD, nor by artificial intelligence. It is part of unbridled public policy and, as such, will favor power over productivity and applause over efficiency. It didn’t work any other way and it never will work any other way.
Scandalous cases of corruption prove that when anomie prevails, any state treasury and any official pen will be used for phony deals, to reward struggle or reinforce loyalties. Even without reaching these extremes, Di Tella’s observation highlights distortions produced for wrong purposes. The industry must generate value competitively, not artificially. It cannot be used as a tool to achieve other goals, such as land occupation, job creation, or strategic self-sufficiency. The national budget may contain explicit provisions for this purpose, without changing incentives for industrialization.
Protectionism has led to import substitution, increasing the cost of vehicles, inputs or spare parts for more competitive sectors. By requiring foreign currency to function, but not generating it, it caused recurring crises in the balance of payments, followed by adjustments and devaluations of the currency.. Regional promotions have led to efforts to avoid paying VAT with minimal final operations, creating false freight rates and cost overruns due to distance from ports and consumption centres. Naturally, regional consulting firms, close to the governors, flourished to accelerate the benefits.
Basic industries, which require huge capital investments, have achieved cheap credit, tax cuts and deferrals, which are irresistible temptations to over-invoice civil works and equipment imports. Development banks such as Banad They have become graveyards for ministerial portfolios suspended due to non-payment. Like the Ministry of Finance, full of nails (fallen guarantees) and never implemented on debtors thanks to skillful managers. More complex cases were resolved through arbitration which was always settled against the Treasury.
Working capital advance financing lines for exporters were a feast for money tables and financing lines, real subsidies on the “Argentine cost” with the cash issue. Still Cuba He did not pay for the purchase of vehicles at times Joseph GelbardBut its manufacturers received payments from the central bank half a century ago, while the latter, the fool in the film, reserved its claims to Fidel. Petrochemical companies use previously subsidized inputs YPF Tanneries, raw hides banned for export, aluminum, cheap energy from Futaleovo and Koyo iron alloy, from government generators. The steel factory sells expensive sheet metal such as Sumisa But he imported his inputs (boards or “boards”) without paying customs duties, like other cases that went unnoticed.
he “National Buy” It was an extortionate system to intercept public imports and prevent the ready contracting of large works which included their financing. By forcing dismantling, they forced the state into debt to implement it. Through good lobbying, antidumping duties became eternal, and technical regulations were distorted. The Tierra del Fuego system, which allows imports in official dollars at prices never audited by the Treasury, constitutes another example of “industrial policy” without head or tail..
It makes sense Argentine Industrial Federation (UIA) Request a gradual transition to the new opening scenario. Eighty years of protectionism have created a factory structure that is not strong enough to confront Asian competitors with huge production levels and modern technologies. They carry on their backs labor costs, financial pressures, lack of credit, and antiquated infrastructure, which, by the way, they knew how to afford as long as they could transfer it at prices, but which now result in unequal opportunities. Which is bad for many: the Chinese tsunami is affecting not only local industries, but also the powerful German industry, which is declining and losing jobs without being able to act to prevent it.
The rush to open the economy and impose a change in relative prices does not come from the Austrian school, nor from a foreign imposition, nor from a descent into the agricultural export model, but from the urgent need to grow at Chinese rates, to make up for lost time. It is in demand by an entire young generation who lacks training for the world of work that requires training in new technologies and challenging artificial intelligence. The educational deficit will absorb enormous public resources to overcome, with less political cleansing and more productivity.
It is also a societal claim demanding previously unknown benefits in terms of health, disability and the elderly. It is a request from those who do not have adequate housing, potable water, or sewage. It is the complaint of producers about flooded fields and governors about destroyed roads. All this can only be achieved if the country is able to compete globally, generate foreign exchange and good job opportunities, away from hydrocarbons, minerals and the countryside. Reducing the cost of Argentina, not with greater protection or captive markets that distance us from the world.
This is the real battle, not to mention the repetition of the utopia of industrial policy to design a “smart” and digital opening, as was always the case in the past. In recent statements, Pablo LavinThe Minister for the Coordination of Production, imitating Guido Di Tella, stated that the best public policy in this area was none. He knows, like this, that Competitiveness will not be achieved by negotiating with the powerful forces in offices or sweet shops, but by reducing costs Who, because they have owners, know how to stand up in the streets and in Congress.
It is the conservatives, unionists and dialogue-oriented opposition who hold the key for Argentina to confront structural changes, modernize, access capital and create formal employment. It is a fight that has never been fought in 80 years, and perhaps it will be achieved this time, with the transformative will of the popular vote.