“Devalue, if you do it, you have to do it knowing that it will go well for you. If it goes wrong, it’s a Rodrigazo,” said the Vice Minister of Economy when leaving when leaving at the crossroads of proposals that -according to his words- are formulated from the “political class in general”, in which he included “government supporters and opponents”.
the economic plan
The economic plan is in the “right direction, although the road is winding because we don’t know where we can go, because among other issues, the monetary imbalance plays a trick on us,” said the official.
The request for a shock economic policy, also formulated by economists of different tendencies, contemplates the implementation of a strong devaluation of the currency, among other issues.
El Rodrigazo, which bears that name because it was implemented by the then Minister of Economy celestino rodrigowas applied in mid-1975 during the government of Isabel Perón and It consisted of a strong devaluation of the peso, increases in public utility rates and fuel prices of more than 100%, to which was added a cap on salary negotiations.
The implementation of this shock plan, which was unsuccessful, inaugurated a period of high inflation and hyperinflation.
Rubinstein said that in general “there is no political conscience to restrict spending” and that for this reason “it will be difficult to meet next year’s Budget.”
“No one wants to be the fool in the movie, it is a complicated political fight because there is no awareness to restrict spending. The demand is that it be spent first and then see how it is financed,” he said.
Private sector
Regarding the role of companies in this inflationary scenario, he repeated something he pointed out two weeks ago when he participated in a meeting in the Senate in which the 2023 Budget was analyzed: companies “have higher-than-normal profits.”
“The dollar, wages and rates are behind. What are ahead are the business gross margins due to the disorder of exchange restrictions,” said Rubinstein.
After which he pointed out that this happens because “some companies know that they are going to validate their prices, because they have no competition.”
Rubinstein urged to recover the results that were achieved during the presidency of Néstor Kirchner, when he was part of the economic team led by Roberto Lavagna.
“There was a time when we had a 3% fiscal surplus, US$40 billion in reserves and inflation of 5% per year, without price controls and with a single market where you could buy up to US$2 million per month. That economy was working very well and the government was winning elections calmly,” he recalled.
said that of “We completely distanced ourselves from that macroeconomics and it is to shoot yourself. I proposed as a personal idea to go in that direction and I found receptivity in the Minister (of Economy, Sergio) Massa.”
Fair Prices
Regarding the recent launch of the Fair Prices Program, he specified that “the idea is to lower monthly inflation to 4%, because thinking of 60% for next year is better than 100% this year. That is why I defend the program even though I would have wanted something deeper.”
“We have to have controls that work well, that is why the mechanism of the Import System of the Argentine Republic (SIRA), whose managers are doing an enormous job not to affect production, knowing that there are some companies that were overstocked for eight years” Rubinstein stressed.
In another passage of his presentation, he highlighted the need to lower the fiscal deficit “not because the International Monetary Fund (IMF) requests it, but because we cannot finance it.”
Finally, the vice minister was optimistic regarding the entry of fresh funds to strengthen the reserves.
“We expect additional income from international organizations to buy the dollars lost in October,” he said.
In fact, he announced that the meetings with the directors of the IMF who are in the country auditing fiscal commitments “go well but are always difficult.”
Source: Ambito
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