During the Gabo Festival, held in Colombia, The American economist near the former Minister of Economy, Martín Guzmán, spoke of inequality, criticized neoliberalism, monopolies and He referred in particular to the situation that Argentina is going through.
Stiglitz spoke of “progressive capitalism”, a perspective that proposes to limit the power of capital through collective control and counterweight mechanisms, and pointed out that, although in Argentina “there were many problems”, the origin of this particular problem “It can be explained when they chose a market economy with Macri in 2015.”
In that sense, he explained: “He decided, to open the economy, Go to the IMF, and obtained a loan of US $ 44,000 millions. And then the fund decided to allow that money to leave the country, “he recalled and said:” The richest in Argentina took the money, Sin check what they did”
The economist acknowledged that Macri arrived at the government with a bad economic situation although he stressed that there were low levels of debt and said that his management “changed the country”: “There was no debt and when it left there was a debt crisis, It was a very bad management of open markets that led to the current crisis”He analyzed.
Regarding the current context, the American warned that “what just happened with Milei, enhances and aggravates the problem.” “They could not pay the loan of 44,000 million and Now the IMF lends them another 20,000 million dollars that will not be able to pay“He added.
In turn, he said: “People can say, ‘look, inflation in Argentina has been reduced,” of course, it has been reduced because they used these 20,000 million dollars to maintain the exchange rate without it falling and this played a great role to reduce inflation”
Finally, he considered that the country “is not viable” with a debt of 56,000 million dollars, said that other problems will not be paid and will be aggravated: “Surely in a few years we will see another crisis,” predicted the economist and added in the same way: “Although the figures now look good around inflation, If we analyze where Argentina is, it is at the door of another crisis”
Joseph Stiglitz’s report to warn about indebtedness
This year, Stiglitz published with Martín Guzmán and more authors a report at the request of Pope Francis where proposals raised to face the growing debt crises that afflict developing countries.
This work, which has the participation of more than 30 economists, points out that 54 developing countries already allocate 10% or more of their fiscal income only to the payment of interests of their debt, according to the United Nations Conference on Commerce and Development (UNCTAD). The text warns that this load “has DESCEDED ESSENTIAL RESOURCES that should be used for health, education, infrastructure or climate resiliencedepriving millions of people of vital medical care, food or employment. ”
Starting from this problem, they proposed a series of international reforms that change the incentives that favor the private creditors and hinder the necessary restructuring to recover the sustainability of debts.
Among the main points that change are the efficient restructuring of sovereign debt, the end of the Rescue to private creditorsstrategic use of Capital, transparency and public participation controls in decision making on indebtedness and reinvention of the global financial system.
Source: Ambito
