Cavallo maintained: “Exports increase when the production of exportable goods has previously increased. For this to happen, it is important that the producer, before deciding to invest in working capital to produce the exportable good, waits for a price that exceeds production costs“.
“The announcement of a more favorable exchange rate for a certain time only serves to advance export earnings, but not to increase them. On the contrary, the uncertainty that this type of exchange management adds can discourage the future production of exportable goods,” the former official emphasized.
He further noted: “The genuine and sustainable encouragement of all types of exports will occur when the exchange market is fully unified, withholdings and taxes that make the costs of exportable production more expensive are eliminated and there are no barriers to imports beyond the payment of import tariffs, without any quantitative restriction”.
Domingo Cavallo Former Minister of Foreign Affairs of the Argentine Nation
Mariano Fuchila
The economist considered that “the management of the exchange system that the Government is carrying out leads to a increasing lockdown of the economyboth on the side of the exports as of the imports“. And he added: “In terms of exports, the production of goods is increasingly discouraged not only for the taxes that are applied to it, but also and, above all, by the arbitrary restrictions on imports“.
Source: Ambito
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